Area business leaders expressed cautious optimism over Gov. David Paterson’s proposal for the Excelsior Jobs Program, a plan the governor says will be better focused and improve the transparency of the state’s economic development incentives.
The governor outlined the plan during his State of the State address Wednesday and offered it as a replacement once the Empire Zone program expires in less than six months. Paterson said the new plan offers tax incentives for research and development, capital investment and job creation in a number of developing fields.
“Unfortunately, the Empire Zone program has outlived its usefulness, which is why we are replacing it with a program that is focused, strategic, accountable, cost-effective and transparent,” he said.
The plan specifically targets a number of high-tech and clean energy industries and obligates businesses to demonstrate their commitment before receiving tax credit refunds from New York. The proposal would also eliminate the gerrymandered zones established under the previous program.
“This new program becomes much more target-tied and it does not have a geographic boundary to it,” explained Dennis Mullen, the chairman and CEO of the Empire State Development Corp. during a teleconference following the governor’s speech.
The plan is built around tax credits for firms that create and maintain a set number of jobs in the state over the course of five years. Benefits would be based on payroll costs associated with the new jobs, according to details released by the governor’s office.
Research and development tax credits would be offered to foster innovation in the state. These credits would be made available only to those businesses investing in capital equipment.
Additional tax credits would be offered to support capital investment — so-called bricks and mortar projects — in the state. The credit is aimed at encouraging businesses to expand.
“In every one of these instances, the rewards are post performance,” Mullen said.
Companies with benefits under the Empire Zone program would continue to receive them until their respective agreements expire. However, these businesses wouldn’t be eligible for any of the benefits offered by the Excelsior Job Program.
Paterson’s plan was met with a degree of optimism among the Capital Region’s economic development officials and business leaders. But many indicated they hadn’t seen enough details from the plan to pass judgment.
“They are really general terms, but they sound like good proposals to follow up on the strengths of the Empire Zone program,” said Fred Quist, coordinator for the Amsterdam-Florida-Glen Empire Zone.
Shelby Schneider, the Empire Zone specialist for Saratoga County, said she was pleased to hear some of the details outlined in the governor’s speech. But she questioned whether the incentives offered by the plan would stand up to other programs offered outside of New York.
“It’s in line with what our goals are, but what remains to be seen is what the incentives will ultimately look like and how they’ll compare on a national and global level,” she said.
Ken Pokalsky, the senior director of government affairs for the Business Council of New York, expressed concern for the proposal’s apparent lack of incentive for companies to keep already existing jobs in the state. He credited the governor’s plan for solving many of the issues raised by the Empire Zone program but said it needs to provide more incentives aimed at retaining business in the state.
“There really is nothing in this package for these companies if they don’t create jobs at the same time,” he said.
Ray Gillen, chairman of the Metroplex Development Authority in Schenectady County, said the brief outline of the plan suggests it could benefit areas that have already taken strides in attracting emerging technology businesses. He said these components could help Schenectady County bring in more jobs.
“The emphasis on clean energy as one of the key emerging technologies … could be very good for us, because we are one of the leading green energy clusters in upstate New York,” he said.
State Sen. Hugh Farley, R-Niskayuna, reserved judgment until he sees more specifics. But he defended the Empire Zone program as one that aided the upstate region.
“I’m not thrilled with him doing away with the Empire Zones, which have been a real help for upstate New York in particular,” he said. “Although it’s not perfect I don’t think it should be thrown out until something better is in place.”
GAZETTE COVERAGEEnsure access to everything we do, today and every day, check out our subscribe page at DailyGazette.com/Subscribe
More from The Daily Gazette:
Categories: Schenectady County