BUSINESS BREAK

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A new state law intended to help monitor a popular tax credit program will also offer new tax breaks for local business owners. The legislation, discussed at a February 13 City Council hearing, affects businesses in the city’s 11 Empire Zones, areas where the state awards special tax breaks to businesses in order to stimulate job growth. In 2004, State Comptroller Alan Hevesi audited the system and found that businesses in the eight zones sampled produced 36 percent fewer jobs than projected since 1986. To remedy the problem, the new law will require more documentation and evaluation from the local administrative boards governing the Empire Zones, in order to insure that businesses are creating the jobs they pledge. It also expands the program with several new tax breaks, including one for businesses that rent, rather than own, their properties. “This is particularly important in New York City where many businesses lease their premises and had been unable to benefit from the credit,” said Andrew Schwarz, deputy commissioner of the Department of Small Businesses Services. But the new program could have some drawbacks as well, according to Sandra De Leon, coordinator of the East Harlem Empire Zone. “My concern is that the new legislation—with new and more stringent requirements—is making it harder for these smaller businesses to become [Empire Zone] certified,” she said. De Leon also called on the state to boost administrative funding. (J. E. Mendez) [02/21/06]