The Empire Zone strikes out

A report issued by state Comptroller Thomas DiNapoli criticized the progress of the state Empire Zone program in correcting problems identified in a 2004 report.

Empire Zones are designated areas in the state that offer tax breaks and incentives designed to encourage economic development, businesses investment and job creation.

In 2004, the state released a report on the effectiveness of the zones that found zone governing boards by and large did not establish adequate data collection and reporting mechanisms, effective monitoring and evaluation systems, or measurable program goals and objectives.

In the report issued last week, DiNapoli stated the zone boards have not adequately addressed those shortcomings.

“Local Empire Zones generally do not measure the success of their programs, and even those that do attempt to measure success don”™t know if job creation data used is accurate. As a result, there”™s no way to determine the effectiveness of Empire Zone tax breaks,” a portion of DiNaploi”™s critique reads.

Auditors revisited eight zones cited in the 2004 report to determine if they complied with the comptroller”™s office”™s corrective recommendations. The zones reviewed included one in Yonkers, plus in the cities of Buffalo, Syracuse, and Rochester, and the towns of Tonawanda, Friendship and Islip.

DiNapoli”™s report stated the zones made only “limited progress” correcting problems identified in the 2004 report.

Those issues identified were:

Ӣ Each zone collected data needed to determine their programӪs costs and benefits but they did not verify the accuracy of the data;

Ӣ None of the zones moved to initiate decertifications of businesses that had performance shortfalls;

Ӣ None of the zones completed annual reports that included outcome measures and comparisons to goals;

Ӣ Only Yonkers and Friendship developed a complete and comprehensive written evaluation plan that established clear and measurable goals, and then compared actual outcomes to those goals;

Ӣ Only Friendship established a performance measurement system;

”¢ Only Tonawanda conducted a zone-wide cost-benefit analysis to determine the effectiveness of the program ”“ however officials were unable to verify the accuracy of data they received from zone businesses. Syracuse and Yonkers partially achieved this goal, but the remaining municipalities did not;

Ӣ Most improvements implemented by the zones came about in response to 2005 state Legislative changes.

In the Hudson Valley, Empire Zones exist in Sullivan County, Rockland County, Orange County, Poughkeepsie, Kingston, Mount Vernon, and Yonkers.

To view the report in full, visit www.osc.state.ny.us and click in the link for the report.