It's Budget Time in New York!

Janary 2010 Issue

Each year the release of the Executive Budget marks the beginning of New York State’s rather cumbersome and often criticized annual budget process.  Even as lobbyists and special interests flock to Albany to make their cases for a proverbial piece of the monetary pie, this year more than ever, lawmakers say that will have to exercise restraint and enact targeted legislative initiatives aimed at keeping New York economically viable and relevant in today’s global marketplace.  The looming budget deficit coupled with some lack-luster revenue projections has created an environment of uncertainty for many investors, companies and economic development agencies. 

On January 19th the Governor unveiled his new economic development strategy for the state in the form of the Excelsior Jobs Program.  This new industry specific incentive program is being billed as the replacement to the Empire Zone (EZ) program - which is scheduled to end the certification of new businesses on June 30, 2010.   For companies already active in the EZ, benefits will continue to flow; however, beginning July 1, 2010 state businesses will be offered access to this new and not yet enacted Excelsior program.  Although the economic development community has had almost a year to prepare for the end of the EZ program, concerns about its demise still remain high, especially given the fact that the proposed Excelsior program  has yet to be considered by the Legislature. 

The Empire Zone program gave rural and disadvantaged areas of the state a competitive advantage where one may not have previously existed.  Plattsburgh and Clinton County have successfully used the EZ program as a key economic development tool to attract and retain business.  Without its financial incentives, several area employers would not and could not have expanded and might have left the area entirely, taking their jobs and investments with them. 

Over the next year The Development Corporation (TDC) will be working with legacy companies to maximize their EZ benefits and segue them into the new state incentive programs.

As the 2010-2011 budget process moves forward it is hoped that the enacted version of the Excelsior Jobs Program and any subsequent EZ replacement,will contain the following attributes:

• The programs should be available statewide and not bound by a designated zone boundary;
• The programs should contain statewide “weighted” regional cost indexes that take into account rural and urban areas as they relate to job creation standards and potential economic impacts of projects.  The type, size and pay quality of jobs created in less urban areas are generally far less than that in metropolitan areas and these should not be considered negatively in determining benefits to new and expanding companies; 
• The programs should offer special incentives for businesses locating in particular “distressed areas” of the state or to companies with growth plans that may positively attract more than one geographic area of the state;
• The programs should offer high-tech/manufacturing job training incentives whereby businesses can access tax credits to help off-set the costs of training the local workforce (including the costs of purchasing equipment for training);
• The programs should provide capital investment tax credits to entice private investment;
• The programs should establish benchmarks for qualifying businesses to meet that go beyond the number of jobs created (annual capital investment, annual training activities, annual facility improvements, facility diversifications, etc.) - economic impact should be relative to the region where a business is locating; and
• The programs should promote investment in green jobs and provide incentives to businesses to build/upgrade energy efficient infrastructures.

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