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Refocus, don’t end, Empire Zone program

    The Senate Republicans’ answer to New York state’s fiscal crisis is to, get this, cut taxes on businesses. That will increase tax revenue, they say. Even if true, it would take a couple of years before the impact was felt, and in the meantime state tax revenues would decrease, not increase, adding to the $12.5 billion budget deficit projected for next fiscal year. So, put the Senate’s proposal under the category of nice idea that the state can’t afford at this time.
    In fairness, the proposal didn’t come in response to Gov. David Paterson’s urgent call last month for spending cuts to balance the budget, but was part of a broader economic development plan for New York state released earlier. The plan involves the aforementioned tax cuts, focused on small businesses and technology firms. And at least some of the money for the cuts would apparently come from letting the state’s $500 million Empire Zone program lapse when it sunsets in two years.
    The Republicans argue that the program is neither accountable nor particularly effective, with promised jobs never materializing and most of the tax credits going to a small number of companies. These criticisms are valid, and are the reasons cited by the business-backed watchdog Citizens Budget Commission yesterday when it called for abolition of the program.
    But the problem with the Empire Zone program, as we have said in past editorials, is that it has strayed from its original purpose of helping economically distressed urban areas and has become a general economic development tool available virtually everywhere and to everyone, including big companies like Wal-Mart, IBM and AMD. ..............................http://www.dailygazette.net/De.....amp;EntityId=Ar00703