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Retool Empire Zones Economic incentive program abuses must be stopped, but care is needed

A state plan to crack down on Empire Zone abuses is fraught with risk but absolutely worth pursuing. Equally important, though, is to recraft the economic development program to help avoid the kinds of problems that now beset it.
Thousands of businesses that won Empire Zone benefits but failed to create the number of promised jobs soon will be receiving letters notifying them of the problem and asking if further progress is possible. Almost 500 of those companies are in Western New York, and more than half of those are in Buffalo.

Ultimately, those companies could be decertified from the program if they fail to produce at least 60 percent of the number of jobs promised. It's the right thing to do, but the Empire State Development Corp., the state's main economic development agency, should move cautiously. Some of those companies legitimately may be struggling. If so, they can hardly hire more people, and penalizing them could threaten existing jobs.

Revocation of benefits also could have an impact on companies considering the possibility of locating in a New York Empire Zone rather than setting up in another state. New York needs these zones in large part because of state policies that have bloated the cost of doing business here. An out-of-state company might think harder about locating in a lower-cost region of the country than putting up with the hassle of a program whose benefits are unreliable.
Still, this program costs taxpayers half-a-billion dollars a year. It needs to be carefully monitored. When businesses sign a contract with the state that includes a pledge of job creation, they need to be held reasonably close to their word.
This change in state policy to enforce job targets also ought to be the signal for Albany to get serious about reforming a program that has grown wild. It no longer focuses on economically distressed areas and its benefits too often go to politically connected companies.
Gov. Eliot L. Spitzer should begin the task of remaking this program, to weed out its weaknesses while refocusing attention on the parts of the state that truly need help and on the kinds of jobs that have the best chance of improving those weak economies.

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