January 31, 2011
By: by Cecelia Martinez, The Saratogian
WATERVLIET - U.S. Sen. Kirsten Gillibrand visited the Watervliet Arsenal Friday to announce a new proposal to expand, simplify and make permanent the Research and Development Tax Credit. Gillibrand, joined by area politicians and representatives from the Arsenal Business and Technology Partnership and the College of Nanoscale Science and Engineering, said the tax credit will create jobs in the Capital District and could increase private investment in research and development by more than $7.5 billion nationally.
"By supporting research and development, we can help our businesses become more competitive and create high tech jobs of tomorrow," Gillibrand said in reference to President Barack Obama's recent visit to Schenectady, during which he emphasized the importance of product innovation in the United States.
Workers from the M+W Group provided a backdrop for the press conference, held at their facilities in Building 44 at the Watervliet Arsenal. M+W Group is the firm responsible for the design and construction of the future GlobalFoundries chip fabrication facility currently going up in Malta, and is one of more than 2,000 New York companies that could take advantage of the credit.
Gillibrand said the current tax credit is too complicated, with businesses receiving anywhere from 12 percent to 20 percent tax credits, depending on a variety of factors. She also said the program has been renewed 14 times since 1981, making it impossible for companies to count on the credit when developing business plans and enticing investors.
"When you're looking for investment from venture capitalists or other investors, oftentimes they look at your business plan and say, ‘well, you can't guarantee this tax credit will be here, so how are you going to make money?', and it reduces the amount of investment," Gillibrand said, adding that experts estimate making the credit permanent could add 160,000 jobs nationwide.
"In today's competitive global economy, it is critical for U.S. companies to commit to longer research and development in high technology markets," said Alan Fuierer, co-founder of Solid Sealing Technology. "A permanent R&D tax credit will help companies expand their technology base and provide the means to pursue leading edge applications."
Sen. Gillibrand's proposal would expand the current credit by changing the formula to make it 20 percent across the board, making it accessible to more companies and matching 20 percent of a company's increased research expenditures.
Gillibrand said that 30 years ago, the U.S. was the global leader in providing tax incentives for private investment in R&D, but is now ranked 17th in the world among developed countries.
Many of those at the press conference spoke of the importance of prioritizing innovation, much like during the space race of the 1960s.
"Innovate or die," said Alain Kaloyeros, SVP and CEO of the College of Nanoscale Science and Engineering in Albany, who noted that 50 years ago last week President John F. Kennedy announced America's goal of going to the moon. He said a return to that mentality will not only spur job growth in the Capital District, but ensure the survival of America's place in the global economy.
"The economic transformation we're witnessing at the Watervliet Arsenal is evidence that these investments in high-tech R&D pay off," said Majority Leader Ron Canestrari. "Extension of the R&D tax credits will enable us to build upon the state's investments and will undoubtedly lead to job creation right here in the Capital Region."
Gillibrand said she will work over the next few weeks to help push the proposal forward. For more information about the Arsenal Business and Technology Partnership visit http://www.arsenalpartnership.com/.