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$400 Million Economic Development Plan Would Add 40 New Zones
Thursday, April 11, 2002
In an effort to encourage additional economic growth and job creation, particularly in Upstate New York, the Senate Majority today released a $400 million plan to significantly expand the successful Empire Zone program by authorizing the creation of 40 additional Empire Zones. The proposed expansion would enable every county in the state to take advantage of one of the most effective job creation programs in the nation.
"Economic development, particularly Upstate and on Long Island, is the Senate�s top budget priority and what we are proposing today is a major expansion of one of the state�s most effective job creation programs," Senate Majority Leader Joseph L. Bruno said. "Many of the Empire Zones upstate are operating at full capacity. The popularity of the program is so widespread that counties without zones are now at a competitive disadvantage for attracting businesses and creating jobs. Our plan would put every county on equal footing by authorizing new zones for counties that do not currently have one authorizing the expansion of 39 existing upstate zones, with provisions for the expansion of 13 downstate zones as well."
The total value of the Senate Empire Zones plan is estimated at $400 million in tax credits and other incentives to promote business growth and job creation. The Empire Zone expansion proposal is in addition to the Senate�s $530 millionp Gen*NY*sis plan, which includes $25 million in tax incentives to create eight Gen*NY*sis zones to encourage economic development specifically in the area of biotechnology and biomedical research and development through similar credits and incentives.
"As Chairman of the Senate Committee on Commerce, Economic Development and Small Business, I know the value of the Empire Zone program in creating new jobs," Senator James Alesi (R-C, Perinton), said. "These zones give local economic development officials the tools they need to attract new businesses and strengthen their local economies."
"In 1986, State Senate Republicans initiated the idea of creating these type of zones in New York," Senator Ronald B. Stafford (R-C, Plattsburgh), Chairman of the Senate Finance Committee, said. "Since that time the program grew from an urban redevelopment program, into a statewide economic development tool. Empire Zones have helped attract billions of dollars in private sector investment. Our announcement today is a logical continuation of the successful program we started 16 years ago."
The Senate Majority is proposing the following:
> Authorizing an additional 40 Empire Zones. The new authorization would only apply to county designated zones to give the widest possible authorization and to permit unlimited noncontiguous areas to be included in zones to enable counties to assist important smaller economic development projects on a countywide basis.
Authorization for new zone designation would apply to those counties with no county designated zone and no more than two locally designated zones. The authorization would include the 16 counties which currently have no zone of any kind and 24 counties which have municipal zones, but no countywide zone.
> Expanding the authorized area of 39 existing upstate zones designated prior to 2001 from two square miles to 2 � square miles effective January 1, 2003. Many zones are approaching full utilization of the two square miles of land area and expansion is vital if economic growth is to continue.
An expansion of the 13 downstate zones designated prior to 2001 would also be authorized upon the subsequent approval of the Governor.
> Legislation to extend Empire Zone tax incentives to projects resulting in the retention of jobs when a substantial capital investment is involved and a determination is made that without the investment, a substantial job loss is possible.
> Continuing the eligibility of certain nonowner occupied facilities for tax incentives, particularly those financed and subsequently owned by Industrial Development Agencies.
It is estimated that the annual State cost of establishing 40 new county designated zones would be approximately $365 million when fully effective. The cost during SFY 2002-03 would be minimal because new guidelines would have to be established and a new round of applications would have to be submitted.
The annual State cost of expanding 39 existing zones by � mile would be $35 million when fully effective. There would be no State cost during SFY 2002-03 due to the January 1, 2003 effective date.
Businesses in Empire Zones receive a significant reduction in taxes through a wide range of tax credits on things such as wages, capital investment and property taxes. Currently, communities can establish zones in a single location or subdivide the zone to encourage development in different locations within the community.
Senator Bruno cited several economic successes that happened in Empire Zones: IBM�s decision to make the largest ever private sector investment in state history in the East Fishkill zone by building a $2.5 billion chip-fab plant and creating 1,000 new jobs; NUCOR Corporation building a steel fabrication plant in the Elmira zone, creating 300 jobs; Mold-Rite Plastics Inc. creating 100 new jobs in the Plattsburgh zone and Kmart is creating 1,000 jobs in the Amsterdam zone.
"These are just a few illustrations how Empire Zones help attract and retain jobs," Senator Bruno said. "There are many more success stories about small businesses that start with 10 or 15 people and have expanded several times and doubled or tripled the number of employees. These are the kinds of success stories that we will see more of by expanding and creating Empire Zones all across the state."
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