Upstaters Take Closer Look At Their Empire Zone. Is There A Lesson To Be Learned Here In Nassau County?
Money for nothing; The state won't tell you who collected the most Empire Zone tax breaks. The secret: It's a New Jersey company that runs old, dirty power plants that didn't add workers. From the Syracuse Post-Standard:
The state's Empire Zone program is supposed to work this way: New York rewards your company with tax breaks if you expand or add jobs.
But the king of the Empire Zones is a business that has done neither.
Taxpayers paid $22 million to NRG Energy for one year, and it did almost nothing to deserve it. The New Jersey company added one-half of one employee. It operated Upstate electric plants built decades ago by someone else.
Two of these plants are the state's worst polluters and a third rarely operates.
Despite this, NRG grabbed a bigger Empire Zone tax break than any of the 8,300 other eligible businesses, an investigation by The Post-Standard reveals. No. 2 was another out-of-state energy conglomerate: Reliant Energy of Texas.
State taxpayers reimburse the companies for their property taxes, making them, in effect, as property tax-free as a hospital or church.
While New Yorkers paid the third-highest electric rates in the nation, the state gave a total of $84 million of their taxes in recent years to two power companies.
There's more. State Empire Zone millions go to companies that do little From an Associated Press story:
A company brings jobs to the state, and gets tax breaks in exchange.
That's how the state's Empire Zone program is supposed to work.
But one of the state's largest beneficiaries of the program, NRG Energy, only added a half an employee and got $22 million in tax breaks in 2003, according to an investigation by the Syracuse Post Standard published Sunday.
The New Jersey company, which operates electric plants in Tonawanda, Dunkirk and Oswego, grabbed a bigger Empire Zone tax break than any of the 8,300 other eligible businesses, the paper reported.
When it applied for the program, NRG said it would hire two new employees at Oswego and six at Tonawanda. But the number of union workers at the three plants has dropped since 1999, said Dave Falletta, business manager of the International Brotherhood of Electrical Workers Local 97.
Because some Empire Zone benefits run for more than 10 years, NRG could eventually collect $200 million.
The second largest beneficiary of the program was Reliant Energy of Texas, which owned 40 upstate hydropower stations in Empire Zones along with two electric generating stations in Brooklyn.
A Reckless Giveaway From an editorial in the Syracuse Post-Standard:
Ladies and Gentlemen of the taxpaying jury: You are good citizens of New York state. You work hard, you pay your taxes. You trust your leaders to use the money wisely.
Well, here is Exhibit A in the case against that happy conclusion: These leaders have refused to account for scandalous waste and flaws in the state's Empire Zone program.
The leadership's big three the governor, the Assembly speaker, the Senate majority leader are sure quick to hold you accountable. Did you forget to get your car inspected or registered on time? You'll pay a fine on top of the usual fee. That's accountability. Did your fourth-grader and her classmates do poorly on the state's standardized test? Their school will get a nasty report card from Albany. That's accountability.
But when a state program designed to reward job growth and improve troubled neighborhoods leaves loopholes so big that out-of-state companies could drive power plants through them, where's the leadership? The governor at least made an effort to tighten the loop. But his effort died in private budget talks with the other two.
No one will say why. That's not accountability.
Accountability means answering a few basic and reasonable questions: Who benefits from this program? How much financial benefit do they get? What does the state all of you get in return?
In the six-year history of this program, state leaders have either refused or been unable to answer those kinds of questions. How could any elected official be so indifferent with money that comes from you, taxpayers, and which ought to be used with utter care and judgment?
Today on the front page debuts the results of an investigation by The Post-Standard that will attempt to answer some of these questions, while the state continues to dodge them.
You decide if you think it's OK that an energy company gets a full refund of tens of millions of dollars in property taxes each year for a decade even though it hired no new full-time workers all because of the loopy rules written into the original program.
It's your money, $22 million of it, that gets refunded to that one company, without any of the program's supposedly good intentions being met. It may be the biggest beneficiary, but as you'll read in coming weeks, it is just one of hundreds of companies feeding at this trough that the state so sloppily and generously filled.
And as you read, if you decide that it's not OK, then you must find these leaders guilty of reckless behavior with your tax money. Tell them you expect more. Tell them you demand more.
It is fitting that the program's initials (EZ) form an acronym pronounced "easy." For a bunch of lucky business beneficiaries, it has been easy money. Which ought to outrage you, who worked so hard to earn it.
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Nassau County is now home to the State's newest Empire Zone. Heralded by State and County officials alike as a boon for the local economy, taxpayers should be more than a bit leary of exactly what this EZ brings to a community's resurgence, and more than this, to State, county and local (including school district) coffers.
In light of the Empire Zones' torid history west and north of this burb (and our proclivity to repeat past mistakes rather than to learn from history's lessons), residents would be well advised to keep a keen eye on local economic development under the Empire Zone program, and to insist on greater accountabilty from those who manage it. That goes for everyone involved, from the local EZ Board to those three men in a room up in Albany.
We'll keep you posted on the meanderings of the Empire Zone as it wends its way through Nassau County. You keep reading these posts. . .
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