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Excelsior Program to Replace NY Empire Zone Program
A job creation program to replace New York's Empire Zone Program, often criticized by Gov. David Paterson for its lack of results and soaring cost, was approved this week by lawmakers. The Excelsior Program carries a much smaller price tag than its predecessor and limits the focus to seven industry sectors seen as having high job growth potential. Funding for the program is capped at $50 million per year for a total $250 million when fully implemented. Annual Empire Zone expenditures exceeded $550 million, according to the governor's office.
Benefits offered under the new program include a jobs tax credit of up to $5,000 per job based on salary and benefit levels, an industrial tax credit of 2 percent of qualified investments, and an R&D tax credit of 10 percent of the federal R&D tax credit that can be allocated to the state. Businesses located within existing investment zones and regionally significant projects also are eligible to receive 50 percent of the Real Property Tax Credit in one year, phasing down to 10 percent in year five.
The industry sectors targeted by the program are biotechnology, pharmaceutical, high technology, clean technology, green technology, financial services, and manufacturing.
Reforming the Empire Zone Program also has appeared on the agenda of past administrations. In 2005, then-Gov. George Pataki introduced proposals to restructure the program, citing poor performance measurements and widespread abuse. His suggestions included increased performance requirements, limiting the benefit period, and revising the formula to calculate incentives so that only those companies creating 100 or more new jobs would qualify for 100 percent of zone benefits (see the April 18, 2005 issue of the Digest).
Although the current Empire Zone Program is scheduled to sunset on June 30, existing beneficiaries will continue receiving benefits until their contracts expire. The Empire State Development Corporation will administer the new program.
The corresponding bills are A.9709 and S. 6609.
New York