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Reform the Empire Zones...or Kill Them

by: phillip anderson

Fri Jun 08, 2007 at 09:37:49 AM EDT

Brodsky aims to overhaul state's Empire Zones program

Westchester Assemblyman Richard Brodsky unveiled a proposal yesterday to temporarily halt and eventually overhaul the state's Empire Zones program, one of the state's most widely used economic-development tools.

Brodsky, D-Greenburgh, wants to place a six-month moratorium on the approval of any new Empire Zone projects while the state performs a "thorough audit" of the program. He called the program a corrupt "special-interest feeding trough" that no longer serves its original purpose - to create jobs and stimulate local economies.

"The program, which was intended to jump-start urban economies, has turned into a scandalous, corruption-ridden giveaway," Brodsky said. "I've recently wondered if the entire program should be repealed, but for now we need to stop it and review it."

Brodsky has repeatedly criticized Empire Zones, which grant tax breaks and other benefits to companies that settle in economically distressed areas. The cost of the program jumped from $30 million in 2000 to $600 million last year, with more than $3 billion in taxpayer money spent overall, he said.

His plan would change the makeup of the local boards that approve Empire Zone projects to ensure broad support and prevent conflicts of interest, he said, and would subject companies to greater environmental and labor standards.

A six month pause while we audit the program and work to prevent conflicts of interest, cronyism and such sounds pretty reasonable, right?

Defending de facto corruption on the flip...

"A moratorium is great news for economic developers in the 49 other states in the U.S.A.," said Assemblyman Robin Schimminger, D-Kenmore, Erie County. "The state's efforts to bring businesses here and facilitate their growth will be put on a standstill."

He added that changes enacted in 2005 will "bring greater transparency and ensure the legitimacy of the program," and the state should look at how those changes are working before taking any other action.

Because Walmart needs more public money, right?

Advocates of Brodsky's plan said incentives have increasingly gone to "big box" companies like Target and Wal-Mart and other corporations that are locating in prosperous suburban areas. Also at issue are "shirt-changers" - companies that reincorporate under a different name and present current employees as new hires to receive the tax breaks.

"The program's powerful incentives are now being used to subsidize favored businesses in some areas of the state that are relatively well-off, while similar businesses in the same area are paying taxes at the regular rates," said Frank Mauro, head of the Fiscal Policy Institute, a labor-backed think tank. "How can New York state justify maintaining a tax system in which businesses whose operations are the same in all material respects are paying taxes under substantially different tax codes?"

Of course, New York can't justify it, so any "thorough audit" of the program is unwelcome to Assemblycritters like Schimminger as well as the pigs at the trough.

The program is a mess, a boondoggle of epic proportions and it's time to get serious about reigning this monstrosity in or killing it once for all.