For New York firms that didn't RSVP, tax credits may RIP
Despite all the hoopla created by the 3,000 warning letters sent by New York State officials last year to companies participating in the Empire Zone program. It was announced today that only twenty six are likely to be removed. The “low hanging fruit” companies getting pink slipped are those that ignored numerous inquiries from the state.
The Empire Zone program – which provides tax credits to firms based on job and investment commitments – has been a thorn in the sides of policy and environmental watchdogs like the Fiscal Policy Institute and elected officials and is a half billion dollar hit on the state budget. The impact on job creation has been questioned far and wide. For groups like ours, last year’s onslaught of warning letters was a hopeful sign there was a new sheriff in then Governor Spitzer at the state capital that would rein in the program.
Sadly, that’s not the case. Of the near 10,000 businesses participating in the Empire Zone program, today’s news is expected to save only $3.2 million. That’s always good news, but many of the firms that are getting the ax weren’t even receiving any benefits. Today’s announcement should add fuel to the fire to scrap the program and start anew since some firms receive millions of dollars worth of tax credits each year and only have one or two employees. While there are efforts to investigate another 145 firms, we can only hope that the newest sheriff in town, Governor Paterson will push to revamp the program entirely.