Sunday, January 4, 2009

“It’s Time to End New York State’s Empire Zone Program”

Citizens Budget Commission releases its report entitled “It’s Time to End New York State’s Empire Zone Program”. Saugerties has its share of businesses (Partial List of Companies that Benefit from Empire Zone Program ) which benefit in what amounts to $582 million taxpayers money. The American Candle Factory is just one of several Saugerties businesses that have failed to live up to the program's original intent. At taxpayers expense, businesses have been given tax relief and benefits from a program that most experts have called a "gross failure". Fully 70 percent of the businesses receiving tax breaks in these Zones failed to meet the job creation targets they set when they were certified to join the program. A 2007 assessment of New York State’s economic development apparatus conducted by AT Kearney, the management consulting firm, concluded:
“Of all of the programs examined here New York’s Empire Zones program provides perhaps the best example of good economic development intentions gone wrong. Its original mission has been morphed by political patronage, legislative revision and commercial manipulation, effectively repositioning it from a program primarily helping distressed communities to one routinely offering tax relief for ongoing businesses.”
Let's look at some of the companies that have received Empire Zone Credits in 2006:
  • WalMart Stores $ 2,376,570.00
  • Berkshire Hathaway (Geico) 19,549,900
  • International Business Machines 31,700,000
  • Home Depot 4,128,125
  • Costco Wholesale 31,238
  • Target 4,545,075
  • Walgreen 144,415
  • United Parcel Service 1,896,508
  • Lowe's Home Centers 15,947,647
  • Lockheed Martin 5,662,787
  • PepsiCo 115,500
  • FedEx 542,509
  • Sysco 132,300
  • Hartford Financial Services 875,625
  • Washington Mutual 701,032
  • 3M 400,574
  • CocaCola Enterprises 106,200
  • Staples 1,095,000
  • Nucor Steel 6,130,000
  • Kohl's 1,989,320
  • Bank of New York Mellon Corp. 1,357,005
  • General Mills 629,991
  • Family Dollar Stores 20,175
  • NRG Energy 20,222,810
  • Corning 6,233,259
  • RadioShack 13,125
  • Dick's Sporting Goods 155 34,875
  • American Axle and Manufacturing 72,724
  • Tiffany 496,020
  • Amphenol 605,000
Failing to Meet Economic Development Goals The Empire Zone program is failing to meet economic development goals. Audits by the State Comptroller have shown that job creation fails to meet targets; recent efforts by ESD to improve the administration of the program have revealed high failure rates among firms at meeting investment as well as employment goals.
"".. when legislative leaders attempt to fix the program, their actions succeed only in opening new loopholes as they close the old ones. As AT Kearney reported, “….the program has spawned cottage industry of lawyers and consultants specializing in helping businesses optimize benefits.”Top Ten Credit Per Job Claims by Firm, 2006:
Company Name Credits of Jobs
Location Job
Flat Rock Wind Power LLC $5,582,349 2 Lewis County $2,791,175
NRG Energy Inc. $6,602,043 3 City Of Dunkirk, Towns Of Dunkirk & Sheridan $2,200,681
257 W. Genesee LLC $1,258,995 1 Buffalo $1,258,995
Riverside Enterprises LLC $1,162,193 1 Utica $1,162,193
728 East Realty Corp. $967,211 1 Port Morris, Bronx $967,211
NRG Energy Inc. $7,382,035 9 Oswego $820,226
Greece Town Mall LP $3,184,595 4 Monroe County $796,149
NRG Energy Inc. $6,238,732 8 Town Of Tonawanda $779,842
Manhatten Nursing Home Realty Inc. $692,261 1 East Harlem, New York $692,261
BuffaloMain Street LLC $624,271 1 Onondaga County $624,271
Ulster Business Complex LLC $1,230,711 2 City Of Kingston, Town Of Ulster $615,356

3 comments:

saugertesian said...

Just downloaded the entire Citizens Budget Commision "It's time to End NY State's Empire Zone Program" at: www.cbcny.org/Ending_Empire_Zones.pdf

Anonymous said...

This blog is no different than the rest I have read in recent weeks. It cites the cost of the program, but never provides readers with any information about the benefits - about the investment in buildings and equipment, in the new wages and benefits provided. I have read the report of the "Citizens Budget Commission" and find several flaws in its analysis, not the least is that is offers little new insight into the program, but relies heavily on quotes and comments from the efforts of other groups, such as AT Kearney and the State Comptroller, each which are flawed themselves.

WhatsTheBigIdea said...

If the program worked as originally intended and was properly managed with oversight, then it would be worth tax dollars.