Besides “ever upward,” excelsior is also an old term for wood shavings used for packing. Local reaction to losing the Empire Zone program and gaining its proposed replacement, Gov. David Paterson”™s Excelsior Jobs Program, indicates businesses may be using excelsior to pack and move elsewhere.
The proposed legislation excludes incentives for distribution and retail, key components of the regional tax base.
“It will only provide the tax credits after companies make their job criteria,” said Maureen Halahan, president and CEO of the Orange County Partnership. “Target industries are research and  development, high tech, clean energy, finance, biotech and manufacturing.”
With Orange county rich with distribution sites in and around Stewart International Airport, which is actively courting such business, the Excelsior Program offers no incentive for that industry in an county that has geared up for just such business.
“I don”™t envy Ron Hicks or the REDC in trying to attract the kinds of business that the Excelsior Program intends to reward if we don”™t have the work force here,” Al Samuels told Rockland Business Association members at a luncheon Jan. 23 at Nyack Seaport.
Hicks, who worked for the New York State Economic Development Corp. as the Hudson Valley regional director under Gov. George Pataki and who heads the Rockland Economic Development Corp., would like to see the Legislature extend the Empire Zone program with intelligent reforms. “I am accepting of the Excelsior Program as long as the economic development fund is still available to close any gap when competing with other states,” he said.
Troubling Hicks is what”™s at stake if the Investment Tax Credit, part of the Empire Zone program, sunsets in June with EZ status, as has been called for by the state”™s Taxation and Finance committee.
“The ITC is available to manufacturers under the EZ program for production equipment related to the manufacture of project at the zone location,” Hicks said. “We understand that Tax and Finance has opined the ITC will no longer be available to certified businesses, businesses that were promised this incentive when they made their investment. Other incentives will still be available until each agreement expires. This is a downgrade of incentives.
“Most disconcerting is it may force those who planned to expand in or to move to New York to change their plans,” Hicks said. “It”™s one thing to continue to tax businesses, quite another to take away a benefit that was promised and upon which businesses made financial decisions. It also makes it very hard for those of us trying to attract business to get our clients to trust the state won”™t pull a bait-and-switch.”
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Hicks said the Investment Tax Credit, part of the Empire Zone program “is putting 2,064 jobs and more than $227 million at risk in the region as a result of the Empire Zone ITC issue. Brian McMahon from the New York State Economic Development Corp. is lobbying for a solution.” Hicks had not heard from Columbia, Greene, Putnam or Mt. Vernon”™s zones.
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“The fact that the proposed Excelsior program has no geographic limits is a plus. My opinion is it”™s a conservative approach and not as formidable as the Empire Zone program, but it”™s safer for the state.”
Michael Oates, executive director of the Hudson Valley Economic Development Corp., which encompasses nine counties, said, “It”™s critical New York has a business tax incentive program competitive with programs from other states. The governor”™s Excelsior Jobs Program calls for a $250 million-per-year spending cap, a 60 percent cut from current spending on the Empire Zone programs. Other changes include exclusion of law firms, real estate developers and retail chains that were eligible under EZ.
“There”™s a great concern about how we are going to transition from the Empire Zone Program to the Excelsior Jobs Program,” said Oates. “For example, the investment tax credit for companies in the zone program should not go away if a company does not make its investment by the sunset date of the EZ program. This could have a dramatically negative impact on projects in the Hudson Valley.”
Oates said HVEDC and other regional EDCs are calling on the Legislature to take a “harder look at the governor”™s proposal with the option of extending the Empire Zone program for another year while the Excelsior Program can be debated and its impacts analyzed.”
Added Hicks, “I don”™t trust this Legislature or administration to ”˜get it”™ quickly enough.”
Lance Matteson, president and CEO of the Ulster County Development Corp., was unavailable for comment at press time.
The overarching question given EZ successes and scandals, remains: Will New York throw the baby out with the bath water when it comes to the Empire Zone program?
“We need to see legislation; right now it”™s just an idea,” said March Gallaher, deputy director of planning for economic development for Ulster County. “We need to know what they are going to do to replace the Empire Zone program. The Empire Zone is an important tool in our toolbox here in Ulster.
“Creating a new incentive program has to be done with care. In this case, we should extend the current Empire Zone program until we have something that is ”˜ready to go.”™”
