The Business Council of New York State, the state’s leading statewide business and industry association, strongly supports this legislation that would make more small businesses eligible for support under the excelsior jobs program, thereby promoting investment and job growth in New York State.
When the Excelsior Jobs program was adopted in 2010 as a replacement for the Empire Zones Program, it was described as the new "centerpiece" of the state's economic development efforts. The Excelsior Jobs program was designed to provide job creation and investment tax credit incentives to firms in targeted industries including biotechnology, pharmaceuticals, high tech, clean technology, green technology, financial services, manufacturing, and agriculture. Even with amendments in 2013, the program is being significantly underutilized, resulting in missed economic development opportunities.
The most recent Empire State Development (ESD) annual report shows that for program years 2011 through 2014, the program has awarded just $40 million in tax credits out of $500 million available (2011 through 2014 inclusive).
For small businesses, the Excelsior thresholds are too high. A manufacturer is required to create 10 new jobs for general program eligibility, and must create 50 new jobs and make a significant capital investment in order to qualify for the programs real property tax credits. Other sectors have even higher jobs criteria. But data shows that 78 percent of all firms in New York State have less than 10 employees, and 89 percent have less than 20. More than half of all manufacturing businesses have less than 10 employees, and 70 percent have less than 20.
To address these concerns, The Business Council supports lowering the thresholds in an effort to encourage more businesses to apply to the program. Specifically, the bill reduces the number of net new jobs required to qualify for the program, and reduces both the job and investment thresholds to be considered a "regionally significant project."
Even with these eligibility changes, the awarding of credits, and the determination of the level of credits to be offered, remain at the discretion of Empire State Development.
With job growth flat in much of upstate New York, and the state continuing to lose jobs in key sectors such as manufacturing, we need to assure that our economic development programs are providing meaningful, accessible assistance to employers attempting to invest and expand in New York State.
For the above referenced reasons, The Business Council strongly endorses this legislation and urges its passage.