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Readers divided on proposed cuts to Empire Zone program

Respondents to this week’s RBJ Daily Report Snap Poll were split closely on Gov. David Paterson’s proposed changes to the state’s Empire Zone program. “A contract is a contract,” one reader says. See dozens of readers’ comments.

Readers divided on proposed cuts to Empire Zone program

Respondents to this week’s RBJ Daily Report Snap Poll were split closely on Gov. David Paterson’s proposed changes to the state’s Empire Zone program, which provides tax benefits to companies for a 10-year period in return for job creation in New York.
Snap Poll participants favored his proposal—which would save taxpayers $272 million and require all existing Empire Zone participants to meet the 20:1 benefit-cost standard established in 2008—by a margin of 52 percent to 48 percent.
Critics call the Empire Zone program wasteful corporate welfare. Readers were divided evenly on their view of the existing program being positive or negative.
By a margin of 59 percent to 41 percent, respondents said utilities, retail and real estate firms should be barred from future Empire Zone certification.
Roughly 425 readers participated in the poll, which was conducted Dec. 22 and 23.

Should all existing Empire Zone participants be required to meet the 20:1 benefit-cost standard established in 2008 for new participants?
Yes: 52%
No: 48%

Should utilities, retail and real estate firms be barred from future Empire Zone certification?
Yes: 59%
No: 41%

Overall, what is your view of the existing Empire Zone program?
Very positive: 12%
Somewhat positive: 38%
Somewhat negative: 26%
Very negative: 23%

Here are some readers’ comments:

Changing the rules in the middle of the game is poor sportsmanship. Do it often enough and no one will want to play with the poor sport.
—Jeff Luellen

With the previous and current condition of Upstate New York, the entire upstate region should be an Empire Zone.
—Glen VanBuskirk, Precision Technologies

Anything and everything that can be done to attract and keep new jobs should be a top priority. This would be exactly the wrong time to “play” tough. A better idea would be to parcel out the benefits based on actual performance as you go.
—Gordon McNeil, McNeil Partners LLC

I am not convinced that the program is a good value to the taxpayer, so I am glad that the state has tightened standards. I remain concerned that the designation of an Empire Zone is subject to who the applicant is and who they know. My preference would be for an economic climate where all businesses can thrive, where a business does not need such “welfare” to get started. The above notwithstanding, I do not think it is reasonable or fair to change the previous agreements without buy-in from the participants.
—Jim Baker, Foundation Design P.C.

I run an Empire Zone company that is growing rapidly. We moved to New York State because of the Empire Zone, and added more than 20 jobs directly as a result.
—Jeff Valentine, president and CEO, Callfinity Inc.

The 20:1 ratio would have made sense from day one, but it would be totally wrong (but very government-like) to make a requirement retroactive.
—Daniel Mossien, Mossien Associates Architects

Let’s declare all of Upstate New York an Empire Zone. This would truly level the playing field. In conjunction with that; all levels of government including school districts must be put under strict austerity budgets or financial control boards while public and school employee contracts are bought out and the system is reset to that of the private sector. Public sector unions are no longer needed since there are enough labor laws and agencies that protect workers. If these steps are taken, upstate’s economy would boom, and we once again would become the Empire State.
—John Rynne, president, Rynne, Murphy and Associates Inc.

It is extremely unjust to grant Empire Zone and other governmental tax abatements and grants (such as COMIDA grants) to retailers. The only effect is to favor some competitors in a single market over others. The recipients take the grants and use them to compete against us while we have to earn our capital the old-fashioned way. What is even worse, it is partly our own tax dollars that are turned against us. There is only a certain size of retail market at a given time and that means the same net number of retail jobs and sustainable square feet of retail space. It is far different if these types of grants are used to attract or preserve manufacturers and service industries that will produce goods and services to ship outside the area and thereby bring fresh money and jobs to our area. That helps our entire community compete, rather than helping some to the detriment of others.
—Jim Cronin, Classic Fashion Resources

A contract is a contract. What we need are politicians of integrity, foresight, realism and financial soundness.
—Foster Rogers, Coldwell Banker Prime Properties

Before we go chasing any more business out of New York, maybe we should rethink what this will do. Asking employers to contribute more to the employee benefits will send some of them to the poorhouse or bankruptcy court. Maybe we should tell Blue Cross, Preferred Care and all the other HMOs they must reduce their rates in order to sell in New York, you know…do something for the people of New York, something other than taxing the crap out of the businesses and people. What industries are making money hand over fist this and every year? HMOs and oil companies are showing record profits year after year; maybe New York should develop their own HMO. No we should not change the Empire Zone rules we need to attract New Business, and raising rates and removing incentives is not the answer. Let’s be smart, New York!
—David DeMallie

New York State should be an Empire Zone. The whole state! Here is a thought to ponder: If Albany recognizes that lower taxes encourage job creation, why wouldn’t there be across-the-board tax cuts? Why should businesses need to meet government criteria in order to “qualify” for a lower tax? This makes absolutely no sense at all. Cut spending to lower taxes. Period.
—Lou Romano

It would be nice if the state was competitive and business-friendly without the need for Empire Zones. Unfortunately, unless the governor and legislature reduce costs drastically so they can cut taxes, tax incentives will still be necessary to retain jobs here.
—Bob Brinkman, chairman, Brinkman International Group, Inc.

In these difficult times, we need to do everything we can to help promote economic development in New York State. The Empire Zone program is an important tool to help the state invest in companies looking to start, grow or sustain operations here.
—Steven Willard, New York Business Development Corp.

The Empire Zone program IS wasteful corporate welfare, and totally ineffective as far as the intended purpose. Tax benefits are awarded based on “who you know” or who you have helped, campaign contribution wise. But changing the rules in the middle of the game would be illegal unless specifically allowed in the original agreement. High personal taxes are what are killing New York, not high corporate taxes. People are leaving New York by the thousands to avoid onerous taxation. What good will it do to retain or attract business’ here if there is no skilled labor to employ? The skill level in New York goes down dramatically every year as those who can move, move. That dilutes the labor pool, which is already far behind other states in terms of skill. The real answer is to lower personal taxes and lower government spending.
—Edwin Tarbush

The whole state should be an empire zone. We can eliminate the empire zones by giving the same breaks to all businesses. This might actually generate quite a few jobs.
—George Dounce

I find the 15:1 ratio presently more reasonable, and for the present difficult time, a transition period would be appropriate, where the ratio is increased by, maybe, 1 percent per year. Businesses must get used to rules set by the legislators, just as every other citizen has to do.
—Ingo H. Leubner, Crystallization Consulting

There are many small businesses still surviving without the help of government welfare under the guise of pork for those with enough muster to get through the paperwork. Job security for the legal professionals, too! Unshackle me Upstate NY … SLOWLY … Who Weeeeee! Long live the lobbyists, bankers and politicians. Can I barter for a position in government too!
—Carol A. Houle, president, WBE AGS Inc.

The Empire Zone program is far from perfect and I applaud Governor Paterson for looking at all options in these economic times. The Empire Zone has been and will continue to be a necessary tool to encourage investment and job creation to our area. While we must do all we can to right our finances we must be careful not to tarnish what is known as a successful economic development tool. By going back and changing the “deal,” we weaken the future effectiveness of this tool. Upstate faces enough economic development challenges is the economic gain today worth losing a project down the line.
—Ira Korn, CCIM Commercial Real Estate Advisory Services

Many businesses (including ours) who are already an approved empire zone business have based their business plans and continued growth on the current EZ status and any changes can be detrimental to the business.
—Rene Spallina, Elam Materials Inc.

This program has consistently been abused. Here’s a novel idea: How about making the entire state an Empire Zone? We might make New York a business-friendly state!
—J. P. Gleason, Gleason Fund Raising Consultants

There must absolutely be some standard for continuing qualification in the program. It’s a disgrace there were no standards prior to 2005: all companies should absolutely offer significant benefit/return for such public investment in their business—or face expulsion. Forcing existing participants, however, to 20:1 is bold—they should be phased in over two or three years. Yet on the flip side, there have been instances where companies have failed to meet even the basic requirements -this needs to change, and any initiative is welcomed.
—Richard Stevenson, co-founder and CEO, CobbleSoft International Ltd.

The key question that you left out of your Snap Poll is one that most people would support. Do you support Empire Zone credits for complying companies moving into depressed economic areas that create or maintain jobs in the manufacturing, export, bio-medical or high-tech industries?
—Ray Tierney, councilman, town of Brighton

The program is the best that New York State has to offer to attract and retain businesses. While there have been past abuses, the projected costs for 2008 are less than just the INCREASE that NYS will spend on Medicaid—and that program doesn’t come close to a 20:1 benefit/cost.
—Mark Redding, Impact Technologies, LLC

The Empire Zone program unfairly benefits only some companies, just because they happen to be located in a specific area. The whole New York State should be zoned Empire Zone. Rochester has lost one-third of its manufacturing jobs in the last 10 years, and continues to lose those jobs in accelerated numbers. Either do away with Empire Zones or offer the same benefits to all NY manufacturing companies.
—Kalman Zsamboky

I have a client who received a $500,000 grant from the empire zone program. It is a southern company with worldwide operations. It moved the company’s Canadian operation here and created at least 80 new jobs in this community. If it wasn’t for that program those jobs would not be here. Can you imagine a southern company expanding in this community without the Empire Zone and COMIDA programs? I can tell you with confidence that it wouldn’t have happened with my client. New York State and Monroe County need all the help we can get.
—G. William LaDue, AIA, NCARB principal, LaDue Architects

It would be just like New York State to change the rules in mid-stream. As a small business owner, I need to be able to predict as closely as possible what my costs will be. NYS needs to guarantee that the current participants in the Empire Zone Program live up to their contracted hiring obligations. Don’t drive more businesses out of NYS by reneging on or renegotiating pre-existing contracts.
—Clifford Jacobson, WebHomeUSA.com

Paterson is trying to enforce a requirement that was not enforced before. The Empire Zone and PILOTs (Payment In Lieu Of Taxes) can be used to help encourage development and retain business in the area. I am troubled when they are used for large corporations that can afford to pay the full taxes and should be supporting the local economy with more than jobs. Small business should be the target for these benefits, and it should be given to all industries. If a start-up electric company can compete with NYSEG, why shouldn’t we let them. Competition forces efficiency and lowers price to the customer.
— Joel Stauring, adviser/owner, Multiman Consulting

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