Empire Zone changes won't affect many area businesses
TRI-COUNTY AREA—In April, New York state changed the regulations for Empire Zone businesses.
Ryan Hallings, Empire Zone coordinator for the Yates Industrial Development Agency, said that previously when businesses applied for Empire Zone certification they had to meet a certain amount of revenue. All businesses had to show they could produce $15 in revenue for every $1 in tax credits from the state.
As of April 1, that amount changed, depending on the type of business. Manufacturing businesses must now show they can produce $10 for every $1 in tax credits. Non-manufacturing businesses must show they can produce $20 for every $1 in tax credits. If businesses were certified before April, 2009, this change does not affect them.
However, the state also looked at businesses to see what they are making. Hallings explained that businesses not meeting at least $1 of revenue to every $1 the state had given them, were facing decertification.
He said Yates County did not see any decertifications because at the time there were none certified. None of the businesses in Schuyler or Steuben Counties face decertification either. Dundee Foods was the first Yates business to be approved by the state for the Empire Zone and faced these changes.
When Dundee Foods was approved after the changes, it had the lower ratio. However, Hallings explained the business was over $20 to $1 when it applied already. Premium Co-Pack, also in Dundee, has not been approved yet. Hallings explained the state requested more information on the business and it is still under review.
“They’ll have a more difficult time, It’s not impossible, (the change) just made it more difficult,” said Hallings, because Premium Co-Pack is a non-manufacturing business.
A third Yates business will also be facing the changed regulations. Coach and Equipment’s application will now be sent to the state. Hallings said that business is well above a $15 to $1 ratio already.
Charles Peacock, Empire Zone coordinator with Schuyler County Partnership for Economic Development, said they had already been reviewing businesses on a $20 to $1 ratio. He said the changes in regulations and decertifications were caused by the state looking at ways to remove “revenue drains” on the budget.
He said there is one business in Schuyler that applied after the regulation change—the McGee Point Landing Project on Salt Point Road. However, he reiterated that locally SCOPED considers all projects at $20 to $1 already.
“It’s still going to be a difficult standard to meet,” said Peacock.
Another way the state has already cut back on the Empire Zone is administration. Hallings said he could see in the future where the state did not have any administration funds and making the counties pay for it. More changes could come to the Empire Zone next year. Peacock said that because the state would be starting the budget process soon for the 2010-11 year, an announcement should be made on the future of the Empire Zone. As of June 30, 2010, the Empire Zone is scheduled to expire. He explained something will still be in place, but the Empire Zone would probably not be reinstated as is. Peacock said two options he is hearing are a set of completely different requirements or just a new program to take its place.