The program that is to provide millions in tax breaks to chipmaker AMD and the Foundry Company has been targeted for reform under Gov. David Paterson's newly released executive budget, and it is unclear whether the benefits will be affected.
Paterson is proposing that all companies taking part in the Empire Zone program demonstrate they provide $20 in investments and wages for every $1 the state invests, a change that would bring an estimated $564 million in savings over the next two years. Those entities that don't make the cut could have their assistance removed.
It's a program that virtually everyone recognizes is badly flawed and is not getting results, said Matthew Anderson, a spokesman for the state Department of the Budget, of the Empire Zone.
Anderson said that the Empire State Development Corporation will be reviewing each entity, but estimated that of the 9,800 projects supported by the program, around 2,100 would be decertified under the new regulations.
The ESDC said that it's still too early to decide which programs will be given the boot, and that they have not yet developed criteria for exclusion. They are receptive to Paterson's proposal, though.
"The governor's decision to enact reforms to the flawed Empire Zone program addresses the program's most critical problems, accountability and efficacy, by providing a strategic focus that more narrowly targets state incentives to key sectors of our economy," said Lisa Willner, a spokesperson for the ESDC.
Advance Micro Devices was promised around $600 million in Empire Zone tax breaks over the course of 10 years as part of a $1.2 billion incentive package that the company said was key to its decision to locate a $4.5 billion manufacturing facility in Saratoga County.
That facility will actually be built by the Foundry Company, a spinoff entity heavily financed by the Abu Dhabi-based Advanced Technology Investment Company. On Wednesday, Dec. 17, the state's Public Authorities Control Board approved the transfer of $650 million in cash to Foundry (the other part of the incentive package).