By Associated Press
Albany, NY – In a scathing report on the state's Empire Zone economic development program, state Comptroller Alan Hevesi said Tuesday 47 percent of the businesses getting tax breaks created fewer jobs than they promised.
Hevesi said his auditors found 23 percent of the businesses analyzed actually lost jobs while just 30 percent met or exceeded their job-creation pledges.
The comptroller's report said state auditors found the zones "are poorly administered, keep inadequate records and do not hold firms that receive tax breaks accountable for actually producing jobs."
"Giving companies tax breaks is giving away real money," Hevesi said. "Empire Zone officials must ensure that the tax breaks actually create jobs and healthy companies."
Charles Gargano, the chief economic development adviser to Republican Gov. George Pataki, whose state Department of Economic Development administers the Empire Zone program, complained that Hevesi had issued "a political report instead of working with us to improve the program."
"New Yorkers know that Empire Zones create jobs and they know that we are working hard to make this program even stronger," Gargano said.
The Empire Zone program was originally established in 1986 as the Economic Development Zone Program. The zones are supposed to help revitalize economically distressed areas.
Almost from the beginning there has been criticism that businesses in the zones getting breaks on state and local taxes have failed to deliver on job-creation promises, and that there is poor oversight.
The Hevesi auditors, using data from 1999-2002, reviewed the operation of Empire Zones in Binghamton, Buffalo, Friendship (Allegany County), Islip (Long Island), Rochester, Syracuse, Tonawanda (near Buffalo) and Yonkers.
The auditors, found that 32 companies in five zones -- Buffalo, Rochester, Syracuse, Tonawanda and Yonkers -- got tax breaks that were worth $3.6 million more than the communities got in return from payroll increases and investments.
For instance, the auditors said 16 businesses in the Buffalo zone received more than $1 million worth of tax breaks while the community benefited to the tune of just $232,000.