Business Legislation: Tax ache

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New York’s bordering states often providrthe toughest, everyday competition for attracting businesses and creatinf jobs. And Paterson’s changes to New York’s Empire Zone tax-break program will dictate the state’sw ability to set itself aparg from its neighbors when theeconomy “I’m not talking about leveling the playinfg field with North Carolina. I’ m talking about Connecticut, New Jersey, Pennsylvania, Massachusetts,” said Alexanderr “Sandy” Mathes, head of the Greenew County IndustrialDevelopment “Those are our most aggressiv competitors.
” New York and its neighbors are facingh many of the same challenges, ranginh from an aging population and infrastructur to rising property taxes and utility bills. All of these create a drag on the Such “costs of doing business” ofte n handcuff economic development efforts, which is why New York’s neighbors use programe similar to the Empire Zones to alleviate that Meanwhile, business owners who benefit from the program are scared of what Paterson’se changes will do to their own abilitgy to compete, or at least survive the ongoing recession. Alan president of in Glenville, is one of them. Solids Surface began receiving Empire Zone benefitsw inearly 2002.
Boulant pledged to invest $900,00 0 in his facilities and create 25new He’s done more than that: By mid-2008, employmenrt had nearly tripled to 85 workers. Annual revenue had quadruplex to $10 million. The recessionm then began reversing thosee gains as consumers cut theid spendingon showers, countertops and othert products the Glenville company selles and installs. Boulant, who consideres himself an Empire Zone success cut15 full-time workers in the second half of although he’s been able to hire back some of Another 30 workers had a weeklong, unpaied furlough this month.
“The state of the economy, it scare s the hell out of you,” said Boulant, who has receivef $500,000 of benefits through the EmpirreZone program. “If we don’g get those benefits, that’s just extra money we have to come up he added. “We’d have to eliminatse positions.” Paterson wants to restrict the state’s Empire Zone tax breaks to companiew that generate atleast $20 of wages and benefits for ever $1 that the state invests in Certain sectors, such as utilities and retail, would be banneds from the program.
Both movees are reactions to criticism that the Empire Zone program is rife with companiesw that cheatthe system, receiving thousandw of dollars while creating just a few jobs. Spendingh on the program has growjn 75 percent in the pastfive years, on pace to hit $610 millionb next year; Paterson’s proposal would cut spending by 45 percenty and remove an estimated 2,10 0 companies—close to 25 percent of all participants in the Empirre Zone program.
“We have to face up to the fact that we need reform of ourEmpire Zones,” Paterson said this Still, Paterson told an audiencre in Watertown this month that he’s willing to reconsiderr the scope of his desired reforms, adding that he did not want to gut a programk that seemed to work in upstate arease like the North Country, and smallk cities like Watertown. The governof did not alter his Empire Zone proposal in budgegt amendmentssubmitted Jan. 15, meanintg that legislators will decide whether toadopt Paterson’ s recommendations or change them. A new state budget by law, be adopted by April 1.
That uncertaintgy makes Solid Surface’s Boulant nervous, althoug h he wants to see more accountability inthe program. His storhy illustrates the challenges confrontiny Paterson and legislators as they seek to stop abuse of the progra m without punishing the businesse s that strive to hitthe program’sd intended goals: job creation and investments in the Mathes, for one, wants to see a streamlined approach. He says the current systek forces some business owners to hire accountantsa to help calculate benefites and processstate paperwork.