When many economic development corporations read over the details of the Excelsior Jobs Program, the hue and cry was heard by Gov. Andrew Cuomo. The Legislature has made changes to the program to give it more widespread applications, but some wonder if the state has done enough to really make the program succeed or if more incentives need to be added to sweeten the pot.
Under the Excelsior program ”“ which replaced the Empire Zone program ”“ the tax benefits companies will receive was lengthened from five to 10 years and revises the jobs tax credit. It will also raise the research and development tax credits to equal 50 percent of a company”™s actual federal research and development, up 3 percent and allows all Excelsior participants to utilize research and development tax credits.
The new legislation allows jobs that qualify under Excelsior to receive discounted gas or electric rates from utilities.
Many economic development agencies scrambled last year to get incoming companies and those expanding in their respective regions to get into the Empire Zone program before it ended June 30, 2010. Under former Gov. David Paterson”™s Excelsior Program, promises to control the abuses found in the Empire Zone program would be eliminated, although many economic development executives said it would be more beneficial to toss out companies not complying rather than toss out the entire program.
Empire Zone was an economic tool, Hudson Valley economic development chiefs said, but they are willing to work with the Excelsior program and glad that some tweaking to Paterson”™s original proposals have been made. “However, there is a limit of $50 million a year on companies making an investment,” said Lance Matteson, president of Ulster County Economic Development. “For a state like New York, that”™s far below the number we need to attract high profile businesses here. Other states around us are offering higher incentives. We need to be as aggressive in our approach to get companies to consider the Empire State.”
Ron Hicks, president of Rockland”™s Economic Development Corp., said he”™s happy to see the revised version and is already working with it.
In addition to Excelsior, local economic development corporations and industrial development agencies can also offer incentives. The ESD said it will post quarterly results of the program on its website.
Excelsior”™s mission is to “Recharge New York,” but counties where smaller industries are more the norm than the exception will have difficulty creating 50 new jobs to be able to qualify under the program.
Companies that make significant capital investments may receive some tax incentives from local industrial development agencies, but they must also create 50 additional new jobs. For each new job created, a credit of 6.85 percent of wages of new jobs will cover a portion of the associated payroll tax.
Job growth will be limited to firms with substantial growth, either in employment or investment of significant capital to expand the business.
From 2011 to 2015, Empire State Development will provide $500 million a year, with a lifetime value of $2.25 billion. Firms can only claim the tax credits offered under the new program by meeting its criteria, which can be found on Empire State Development”™s website, esd.ny.gov.
The potential tax credits over a 10-year period for companies planning to expand are calculated on projected capital investment, gross wages for new hires and research and development expenses. For certain firms in certain areas that were not listed in the overview of the program, they will be issued a certificate allowing them to claim eligible tax credits.
