In mid-July, Lance Matteson was among economic development leaders who jammed the boardroom at the Hudson Valley Region Empire State Development in New Windsor. Like his counterparts, the Ulster County Development Corp. president came to hear ESD”™s president and CEO Dennis Mullen explain how the new Excelsior Program would help attract and retain new business in New York.
Matteson now wonders if Mullen”™s ambitious program, which was well-received in its presentation and intention, will be the magic bullet to make New York State attractive to new business.
“I”™m certainly eager to get more details from Empire State Development. The laws are going to be arriving any day,” Matteson said. “While it”™s clear Excelsior is less aggressive than Empire Zone ”“ certainly regarding the investment tax credit ”“ we have to give it a chance.”
“I”™m not happy about companies that have made agreements to come to Ulster that may find incentives being taken from them,” he said. “While the point has been made that larger companies will be impacted if they”™ve received more than $2 million in tax credits, it sends a bad message about how the state is doing business.”
Lisa Wilner, public affairs manager for Empire State Development, said the state Department of Tax and Finance confirmed Matteson”™s worries: There will be no interest on the deferred credits.
Matteson, like every other economic development chief in the Hudson Valley ”“ and, for that matter, in New York State ”“ realizes the Empire Zone was abused, but wonders if replacing it with a program that essentially asks businesses to defer tax credits gives New York the credibility it needs to attract and retain business.
“Any company with more than $2 million in tax credits cannot use them unless they are spread out over three years,” Matteson said. “Even if the companies have made the investments promised and earned the credits, the credits won”™t be honored because the state needs big business to bankroll its deficit. We are telling companies looking at New York that they will get a credit but they might be told how and when they can be used,” he added.
“New York”™s style of doing business is frightening to the business community. How can they rely on our word if this kind of precedent is being set?” Matteson says it would not surprise him to see if there is going to be litigation over the withholding of credits.
“As far as I can ascertain, there will not be any interest on those deferred tax credits. To me, it represents the measure of the desperation of the state”™s fiscal predicament.”
The 10 percent tax credit in the Empire Zone program was economic development chiefs”™ most helpful selling point. “Losing that will definitely impact us. The Excelsior Program offers tax credits that are ”˜cashable,”™ but it depends on the types of business. We will all be more knowledgeable once Mr. Mullen gets the paperwork in our hands.”
In Ulster, Matteson says the county has stepped up its systematic program by visiting existing companies to help with potential problems or opportunities. “Our Business Development Committee has helped us learn how to be more helpful and has been well-received. It”™s still a very tough economy for many and will continue to be.”
