Central New York cities part of new federal program encouraging private investment
In addition to tax cuts, the recently passed federal tax overhaul includes a measure to encourage the private industry to invest in low-wealth areas. The program offers tax discounts and other incentives for people to put their profits from stocks and other holdings to work in so-called Opportunity Zones. Those resources can then be invested in businesses and other economic development projects in rural and urban districts that are plagued by high levels of poverty.
There are 514 Opportunity Zones in New York state, including in Syracuse, Watertown, Oswego and Fulton. Oswego County Assemblyman Will Barclay (R-Pulaski) says he's optimistic about what the new program could do for his district.
"I was really pleased with obviously the city of Fulton, which desperately needs some investment," Barclay said. "Oswego, which is doing better but the east side could use some investment, and I know from living in Pulaski and Richland, we certainly could use capital coming into our districts."
The Opportunity Zones measure received bipartisan support in Congress. North Country Rep. Elise Stefanik (R-Willsboro) heralded the idea, saying the Opportunity Zones could help spread the benefits of the tax overhaul.
But not everyone is convinced that this approach works. Timothy Weaver, a political science professor at the State University at Albany, has studied the enterprise zone idea since it was first introduced in Britain in the 1980s.
"Even people who have been presented with the evidence that these programs don’t work very well still stick with it," Weaver said. "It’s what I call a zombie idea, the kind of idea that should be dead but staggers on nevertheless."
Weaver says some studies find that these economic zones draw investment away from other areas or end up subsidizing investments that were already taking place. And he says there's evidence that the programs only create a fraction of the jobs that were initially promised and don't always help low-income people because some of the investments made are luxury real estate or industries that don't end up employing those most in need of the work.
The federal government is still developing the guidelines for the program.