When Gov. George Pataki took over the Empire State, he had one major goal -- to turn New York into a place where businesses could succeed.
Just a few years later, the turnaround is tangible and real. The proof is in the statistics.
Since 1995, over 300,000 private sector jobs have been created, and more than 8 million New Yorkers now hold jobs, the highest number since 1990.
To spur business growth, New York has reduced the cost of workers' compensation by a staggering $1 billion, or 31 percent, and slashed 1,000 regulations from the books.
Taxes have also been trimmed, with three straight years of personal income tax reductions and the largest corporate tax rate cut in state history, from 9 to 7.5 percent.
The cut will save New York businesses $260 million per year. With the reduction, New York's rate will move from ninth to 25th among states that have corporate income taxes. The move marks the first cut of the corporate tax in New York since 1987.
Zoning in on business
In June, a dozen new Economic Development Zones were formed to bring the state's total to 52.
In general, the zones offer incentives to attract businesses to inner cities andrural areas.The newzones were added to spur development in areas that were hit hard by federal cutbacks in defense spending.
Businesses in the zones employ 100,000 people in more than2,200 firms. These areashave witnessed $2.7 billion in investment since 1987. Incentives to businesses in these designated areas include wage tax credits, employee tax credits, capital investment credits, sales and local tax relief and low cost power agreements with utilities.
To further support growth in these zones, the Empire State Development Corp. approved a $1 million infrastructure grant for Electronics Park in Salina, near Syracuse.
Lockheed Martin's Center for Excellence in Radar and Sensor Systems already employs over 2,200 people there, and more than a quarter of the park's 400,000 square feet has already been bought or leased.
In the Fulton Zone, Black Clawson Converting Machinery, a maker of equipment and machinery for the paper industry, is expanding.
The company will invest $5.5 million in a 10,000 square foot expansion to create 26 new jobs immediately and 50 more jobs over the next two years. The firm will receive a $300,000 infrastructure loan/grant from the state, $50,000 in job training funds and $50,000 for an Industrial Effectiveness Program study.
Big investment from Big Blue
New York:
Getting Down to Business
- Civilian labor force: 8.6 million
- Per capita personal income: $29,181
- Number of manufacturing establishments: 26,608
- Manufacturing workers: 921,000
- Value added by manufacturing: $89.9 billion (1995)
- Exports: $49.3 billion (1996)
- Capital expenditures in manufacturing: $4.6 billion (1995)
- R&D expenditures: $8.6 billion (1995)
- Business starts: 14,450 (1997)
- Business failures: 5,054 (1997)
Sources: U.S. Department of Labor, New York State Department of Labor, U.S. Bureau of Economic Analysis, U.S. Bureau of the Census, U.S. Bureau of Labor Statistics, Dun and Bradstreet, National Science Foundation. |
With economic growth gaining momentum in New York since the mid 1990s, the state got a positive jolt from IBM in November, 1997, with the announcement that it would build a $700 million computer chip production facility in East Fishkill in the Hudson Valley Research Park.
The plant, and two other IBM expansions, will create a total of 1,550 jobs. The new chip facility will add 400 jobs, with IBM moving other jobs to the state. IBM Credit Corp. will permanently locate 800 people in North Castle, with the addition of 150 new jobs. IBM will also set up a Global Services Support Center in East Fishkill, creating 200 jobs.
"While these jobs and facilities could have been located anywhere, Governor Pataki's leadership and his team's commitment to improve the business environment cemented our decision to expand in New York state," said IBM Chairman and CEO Louis V. Gerstner, Jr. "IBM's new facility in East Fishkill will make New York home to the world's most advanced microchip development center."
IBM's investment makes it eligible for up to $13 million in grants for employee training and costs on the projects, sales tax abatements of $8.8 million for capital costs, and property tax abatements of $6 million.
The IBM announcement could be a sign of things to come for New York, which has targeted the semiconductor industry for growth.
In March, New York selected 13 sites for semiconductor development.
The locations were selected based on their adherence to a set of criteria, including a zoned 200-acre piece of land with access to transportation, water, two power sources, sewer service and proximity to academic and vocational resources.
Research connection
| "While these jobs and facilities could have been located anywhere, Governor Pataki's leadership and his team's commitment to improve the business environment cemented our decision to expand in New York state."
-- Louis V. Gerstner Jr., chairman and CEO, IBM
|
New York once again proved it is serious about developing the semiconductor industry in August.
The University of Albany and Rensselaer Polytechnic Institute were chosen as one of two groups of major universities in the country for the $50 million Focus Center program. Headquartered at the Center for Environmental Sciences and Technology Management in Albany, the program involves research for new generations of more powerful computer chips.
The center won out over seven competing consortiums.
The program will add 50 high-tech jobs, with the possibility of adding 50 more each year for several years. It also increases New York's chance of attracting semiconductor businesses.
The state backed the program by providing $5 million annually. In addition, it has pledged $10 million for the expansion of the Albany facility. The money will be used for a pilot semiconductor manufacturing and training facility.
Research in other areas also receives strong support. Plug Power, a company that researches and develops fuel cells, will add 300 new jobs at its Albany plant.
Established in 1997 by DTE Energy, owner of Detroit Edison, Plug Power makes fuel cells to power homes and cars. The company hopes to introduce a commercial system by the year 2000. Its investment has resulted in a $1 million Jobs Now grant and $1.2 million from the New York State Energy Research and Development Authority.
Manufacturing moves ahead
Even though New York has focused much attention and effort on semiconductor and other high-tech industries, the state has not ignored manufacturing.
In June, Dunlop Tire Corp. announced an investment of $25 million in its plant in Buffalo. The expansion will add 70 jobs to the 1,200 already at the site. The expansion will allow Dunlop to increase its capacity to make tires for Toyota, Lexus, Nissan, Honda, Mercedes, Harley Davidson and Polaris.
The state will provide a $13.4 million low-interest Job Development Authority Loan for a 10-year term. The expansion should be completed by the middle of 1999.
Changing perceptions
Axiohm Transactions Solutions provides a typical example of the shifting perception of New York when it comes to business.
Axiohm, a manufacturer of printing products, is consolidating its operations in Ithaca after acquiring DH Technology. Axiohm will add 175 new jobs in Ithaca to its 324 current employees.
The firm moved its jobs in Wyoming and California to Ithaca, because the consolidated company owned the Ithaca building. Axiohm was using only 120,000 square feet of the 286,000 square foot facility.
"Politically within our company it was a tough battle to choose New York with its union environment and traditionally high tax environment," said Sam Villanti, general manager. "But the situation has changed in the last few years and the Empire State Development group worked with us. A lot of the credit goes to them. They stayed with us to make sure we stayed and expanded in Ithaca."
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