New York to Fix Its Empire Zone Program

The Pataki administration will offer legislation next year to extend the state's Empire Zone program and tighten loopholes exploited by some businesses to get tax breaks, according to an economic development official.

The Empire Zones program was established to encourage job creation through tax breaks, concentrating on poor urban areas. The state approves zone applications, oversees and pays for the tax breaks. The 72 zones scattered from New York City to Buffalo range in size up to two square miles.

Some abuses in the program have been reported. A review earlier this year found dozens of businesses in Syracuse and Onondaga County positioned themselves to avoid paying property and state income taxes for 10 years by hiring just one person, The Post-Standard of Syracuse reported. Tax breaks also have gone to businesses in prosperous suburban areas rather than distressed ones.

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