Post-Standard Database Sheds Light on Empire Zone “Winners”
The Syracuse Post-Standard recently published an updated, on-line database titled “Empire Zone Winners,” which exposes taxpayer losses from this broken subsidy program. For years, advocacy groups and elected officials have called for the program’s end, or at least major reforms.
The Post-Standard’s database lists Empire Zone tax breaks that 4,990 businesses expected to claim on their 2007 taxes. The database is searchable by geographic area (broken into Empire Zones) and for each company includes: its rank in NY (in terms of the amount of credit given), the amount of tax credits for 2007, the number of full time jobs at the company, the number of new jobs created in 2007, average wage, total payroll, and total investment.
In New York City, a number of projects demonstrate the program’s dysfunction in providing tax dollars for few or no jobs and little or no investment, for low-paying jobs, and, sometimes, to bad employers. Among the many:
Blauners, LLC, a real-estate investment company, in Hunts Point, Bronx, expected to claim $1.26 million for only three jobs with an average wage of $8/hour. That’s about $420,000 per job. To add insult to injury, the company only invested $231,819 at the site.
B & H Foto in North Brooklyn expected to claim a large credit of $2.6 million for 190 jobs with an average wage of $9/hour, with an investment of only $913,640. Last week, the company settled an EEOC lawsuit by agreeing to provide $4.3 million to Hispanic workers who were denied promotions and paid less than their non-Hispanic counterparts.
FC Gowanus Associates, which shares the same parent company as the developer of Brooklyn’s controversial Atlantic Yards project, expected a smaller tax credit of about $174,000, but like a number of other companies, it had zero jobs, and zero investment when claiming the credit.
Last week, state legislators agreed to some basic reforms, including disallowing incentives for some companies that did not invest at least as much as they received in tax breaks, and ending the program one year ahead of schedule, on June 30, 2010. Yet, despite action to scale back the program, New York City has taken efforts to expand it by allowing certain projects outside of Empire Zones to nevertheless secure Empire Zone benefits. Given the nature of some of the projects in the Post-Standard’s database, this doesn’t seem like the wisest use of taxpayer funds.