Changes to the state Empire Zone program this year were retroactive. We are all for scrapping the Empire Zone program, but businesses deserved some kind of warning that the terms of the deal were about to change.

When Gov. David Paterson targeted the Empire Zone program in his budget message late last year, we thought Albany might finally be heading in the right direction on economic policy. The business incentive program had been notoriously wasteful and unaccountable for years when the governor and Democrat-controlled Legislature decided to fix it in the 2009-10 state budget.

More than 8,000 businesses get nearly $600 million in tax credits each year through the Empire Zone program. They all got letters in May stating that they would have to be “recertified.” This meant proving that they got more in private investment than public investment.

That’s reasonable, but the timetable wasn’t. The state budget called for stripping any businesses that didn’t meet the criteria of their benefits for 2008.

This is 2009.

In other words, many businesses found out after they had filed their 2008 taxes that they may or may not have filed them correctly. So owners held their breath waiting to see if they would have to refile and potentially pay more in taxes.

Now, the Empire Zone program has nothing to recommend it. The Citizens Budget Commission, an independent fiscal watchdog, released a report late last year stating that 58 percent of the companies in the program failed to provide the jobs they promised in exchange for tax breaks. In February 2008, state Comptroller Thomas DiNapoli said the state’s Empire Zone program isn’t monitored closely enough to determine whether it’s effective at retaining and attracting jobs. We have called many times for the program to be scrapped.

But let’s scrap it in an orderly way. It was not fair to businesses to change the rules of the game and make them retroactive. In addition to the recertification, the state has decided it will wrap up the Empire Zone program altogether by June 30, 2010, instead of 2011.

That’s just one year from now. Will anything replace it? Who can say? And who can say whether businesses should trust the state to keep any future promises?

All the more reason not to have anything like the Empire Zone program, which was ripe for abuse right from the start.

Albany needs to reduce taxes and fees across the board and invest in infrastructure improvements and energy programs that encourage all businesses — not just a select few — and residents to move to or stay in New York.

The new standard for public versus private investment would have been fine if businesses had been warned a year ago that this would be the criteria. Instead, the state overcorrected, sending its already scattered economic policy veering off the road once more.

Daily Messenger