Business Legislation: Tax ache

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New York’s bordering state s often providethe toughest, everyday competition for attractingf businesses and creating jobs. And Paterson’s changes to New York’sw Empire Zone tax-break program will dictate the state’s abilitty to set itself apart from its neighbors when theeconomy rebounds. “I’m not talking about leveling the playint field withNorth Carolina. I’m talking about Connecticut, New Jersey, Massachusetts,” said Alexander “Sandy” head of the Greene County IndustrialDevelopment “Those are our most aggressive competitors.
” New York and its neighbors are facingf many of the same ranging from an aging population and infrastructur to rising property taxes and utilityy bills. All of these created a drag on the Such “costs of doing business” often handcuff economif development efforts, which is why New York’as neighbors use programs similar to the Empire Zonezs to alleviate that burden. Meanwhile, businessz owners who benefit from the program are scared ofwhat Paterson’s changes will do to their own abilityg to compete, or at least survive the ongoing Alan Boulant, president of in Glenville, is one of Solid Surface began receiving Empires Zone benefits in early 2002.
Boulant pledged to investg $900,000 in his facilities and createe 25new jobs. He’s done more than that: By employment had nearly tripled to85 workers. Annua revenue had quadrupled to $10 million. The recessioj then began reversing thosed gains as consumers cut their spendington showers, countertops and other producte the Glenville company sells and installs. Boulant, who considers himselc an Empire Zonesuccess story, cut 15 full-timew workers in the second half of although he’s been able to hire back some of Another 30 workers had a unpaid furlough this month.
“Ther state of the economy, it scares the hell out of said Boulant, who has received $500,000 of benefitws through the EmpireZone “If we don’t get those benefits, that’s just extra moneyg we have to come up with,” he added. “We’s have to eliminate positions.” Paterson wants to restrict the state’s Empire Zone tax breakas to companies that generate atleast $20 of wages and benefitsa for every $1 that the state investss in them. Certain such as utilities and retail, would be bannex from the program.
Both moveds are reactions to criticism that the Empird Zone program is rife with companies that cheat the receiving thousands of dollars while creating just afew jobs. Spendingv on the program has grownh 75 percent in the past five on pace tohit $610 million next year; Paterson’s proposal woulds cut spending by 45 percent and remove an estimated 2,100 companies—close to 25 percent of all participantsa in the Empire Zone “We have to face up to the fact that we need reformm of our Empire Zones,” Paterson said this month.
Still, Paterson told an audience in Watertownj this monththat he’s willingg to reconsider the scope of his desired adding that he did not want to gut a progra that seemed to work in upstate areaes like the North Country, and small citiexs like Watertown. The governort did not alter his Empire Zone proposal in budget amendmentssubmitted Jan. 15, meaningy that legislators will decide whether toadoptf Paterson’s recommendations or change A new state budget must, by law, be adoptex by April 1. That uncertainty makes Solidd Surface’s Boulant nervous, although he wants to see more accountabilityt inthe program.
His story illustrates the challengews confronting Paterson and legislators as they seek to stop abuse of the prograkm without punishing the businessese that strive to hitthe program’s intendesd goals: job creation and investments in the state. Mathes, for one, wantz to see a simplified, streamlined approach. He says the currenf system forces some business owners to hire accountantss to help calculate benefits and processstate paperwork.