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February 18, 2004

Pataki suggests he's cool to bill that would punish many employers that move jobs out of state

Governor Pataki this week hinted that the best way to keep jobs in New York is to improve the state's business climate, not penalize companies that move jobs.

"Obviously we have to fight for every single job, and we're working to do that by lowering the burden on the state's manufacturers so they can compete, creating new tools like Empire Zones, and innovating through our centers of excellence," Governor Pataki said Feb. 17 in response to a reporter's question about employers that move jobs beyond the state's borders.

"To me, it's always disappointing if a company seeks to move jobs overseas. I don't like seeing that happen and we're going to continue to fight to try to prevent it," he added.

But in response to a question about how such job movements should affect the state's economic-development incentives, the Governor said, "I think the way to do it by lowering the cost and providing the incentives and encouraging the innovation for companies here."

The exchange was apparently prompted by a new bill (S.6040-Spano/A.9567-Brodsky) that would require employers that receive any broadly defined "development assistance" to return all such aid if they move even a single job from any facility out of state.

Employers penalized in this way would also be denied any other development assistance for the next five years.

The bill defines "development assistance" to include tax credits, loans, grants, power sales, and infrastructure upgrades. The sanctions would hit any business if it or its corporate parent moved a job. The bill would also make its sanctions retroactive by requiring repayment of development incentives from past years.

Business Council President Daniel B. Walsh criticized the bill as "isolationist."

"We can think of few state policies that would hurt New York State's economic climate more than the unreasonable standards and draconian penalties proposed in this bill," Business Council President Daniel B. Walsh said. "Better state policy would focus on addressing taxes and other high business costs that make it so hard to keep jobs in New York in the first place."

Walsh noted that the state's development incentive programs already include reasonable and appropriate performance standards. For example, both the Empire Zone program and the Power for Jobs program award tax credits that depend on the annual achievement of employment criteria.