Two new job-creation zones under consideration for Western New York would be all but guaranteed under a plan advanced Tuesday by State Senate Republicans.
The statewide proposal, which would cost the state $350 million in lost tax revenues, would approve applications now pending before the state by Buffalo and the Town of Tonawanda to designate portions of their municipalities as Empire Zones, which give companies located within them big tax breaks.
"We don't see it as a cost; we see it as an investment," Senate Majority Leader Joseph L. Bruno said in offering the proposal Tuesday in the State Capitol.
The plan calls for doubling the size of all the state's 52 Empire Zones from the currently allowed 2 square miles. Gov. George E. Pataki last month proposed expanding the size of 22 of the 52 zones, including Empire Zones now located in Buffalo, Lackawanna and Niagara Falls.
In addition, all 14 communities across the state that have applied for new Empire Zone designations would be awarded their bids. The current law allows for the addition of six new sites statewide. If passed, the Senate plan would ensure the approval of the Empire Zone applications made last year by Buffalo to add a second zone and the Town of Tonawanda, which wants a zone in its western end along with about 50 acres in the City of Tonawanda.
The Senate proposal also calls for creating eight new tax-cutting zones set aside specifically for biotechnology companies. The proposal, however, does not specify where in New York those sites would be.
The Empire Zones, the original idea of which goes back to the early 1980s and was first sponsored in Washington by former Rep. Jack F. Kemp, give occupants a range of tax breaks and credits. They include a five-year wage tax credit for hiring workers for new jobs, a 25 percent capital tax credit, real estate tax cuts and a reduction in utility taxes. The program, once known as Economic Development Zones, was expanded last year under a plan first put forth by Assembly Democrats.
Assemblyman Robin Schimminger, a Democrat whose district includes the Town of Tonawanda, said the governor's plan would have effectively given Buffalo its second Empire Zone by doubling the size of the current zone. Moreover, he said he has been increasingly confident the Tonawanda zone application stands a good chance of getting approved this year. That, Schimminger acknowledged, is in part because he was also recently appointed to the state panel that selects the new zone winners.
Still, Schimminger said, "The fact that the Senate has come forward with an even more far-reaching proposal (than Pataki's) bodes very well for both Buffalo and the Town of Tonawanda."
Mayor Anthony M. Masiello said he welcomed the Senate plan to permit the city an additional Empire Zone, as well as the doubling in size of the special areas to 4 square miles apiece. "The zones work. The benefits are real and desirable, and the more zones, the more development investment," he said. The Empire Zone proposal came as a group of large and small businesses from Western New York were scheduled to meet today to coordinate efforts to push for the pending application for the second zone application for Buffalo. Patrick Gould, chief lobbyist for the Buffalo Niagara Partnership, said a number of struggling local companies have been watching with concern the tax breaks being given by the state to some of the big corporate players, such as the recent Adelphia Communications deal to lure a new office tower downtown.
"We have a lot of companies that are just surviving," Gould said. The Senate plan, he said, "is an added bonus for those companies just getting by."
"It will be an important element in the arsenal that we have to create jobs," added Ronald Coan, executive director of the Erie County Industrial Development Agency.
Buffalo's new zone application is composed of more than two dozen sites scattered around the city. The Town of Tonawanda bid includes sites already developed, such as the American Axle plant, and vacant land officials believe could be attractive to companies, given the Empire Zone tax breaks.