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Getting tough on Empire Zone companies

   In December, Gov. David A. Paterson proposed changes to the state's Empire Zone program that would have ousted 2,000 companies from New York's main economic development initiative.

   The theory was, besides saving the deficit-ridden budget some money, to end the deep tax breaks for companies that don't produce enough jobs or investment. In short, he wanted more bang for the buck.

   The Empire Zone program began earnestly enough: create in blighted sections of the state special areas where companies would locate and, in return, get tax breaks, such as credits for number of workers hired or relaxation of sales taxes on equipment purchases.

   But then, like other state efforts, every corner of the state wanted a piece of the action -- including communities that could hardly be described as home to any blight. The benefits expanded and the costs soared. Meanwhile, some companies were getting tax breaks for jobs they would have created without the help from Albany. And others came far short of their job-creation promises.

   Now, the fight is coming to a head. Letters have streamed out across the state from Albany informing more than 1,600 companies that the benefits they have enjoyed for years could be about to evaporate.

   Critics of the new approach say Albany is unfairly changing the rules for companies in the middle of the game. Lost jobs will be the result.

   But critics of Empire Zones say they have enjoyed the largesse of corporate welfare without proper oversight for too long, and that an effort will now be launched in the next year to create and retain the kinds of jobs New York needs to grow its economy.

   -- Tom Precious


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