Gov. David A. Paterson on Tuesday called for a 55 percent cut in the amount of tax credits available for the new job creation program that will replace Empire Zones.

In the new state budget unveiled in Albany, Paterson proposed a $250 million annual cap on the Excelsior Jobs Program, down sharply from more than $550 million a year that is currently being spent on Empire Zones.

The new program also narrows the focus of the tax incentives, restricting them to a handful of industries and mandating that the jobs be created and maintained for a period of time before any benefits are handed out.

“The state is facing extraordinary fiscal difficulties now. We have to look at ways to target our resources in the best way possible,” said Matt Anderson, spokesman for the state Division of the Budget.

But while that satisfies many critics of the state’s free-flowing job creation efforts in the past, it’s causing some concern among the business and economic development communities.

“We’re concerned that the value of the incentives may not be sufficient enough to generate job creation and capital investment,” said Brian McMahon, executive director of the New York State Economic Development Council. “But we do want to learn more . . . To the extent that the Empire Zone’s credits were as robust as they are, they truly are a job creation program.”

Additionally, Paterson called for merging the state’s two economic development entities into the new Job Development Corp. to streamline operations and save money while overseeing a series of revamped and targeted jobs and business support initiatives.

In his biggest structural change, Paterson called for combining the state Department of Economic Development and Empire State Development Corp. to form the new agency, saving $4.7 million a year. No layoffs are envisioned, however.

The budget also calls for $317 million in reduced spending and debt for economic development capital programs over five years, including $75 million in savings from lower debt payments. And it cuts spending for high-technology funding and tourism marketing.

On the spending side, the governor proposed $100 million for a 10 percent matching grant program for businesses that qualify for part of $1.3 billion in federal Recovery Act funds. He also proposed $25 million for a small business revolving loan fund with “seed money” from the New York Power Authority, and $25 million for a new technology fund to help university-based entrepreneurs transition research into products and businesses.

In addition $45 million was allocated for special initiatives, such as the Empire State Economic Development Fund, the Minority and Women-Owned Business Development and Lending programs, the Urban and Community Development Program, the Entrepreneurial Assistance Program, the Manufacturing Legacy Program and international trade efforts, plus retention of professional football in Western New York.

Business and development leaders praised the governor’s goals.

“Overall, the governor, we believe, recognizes that one part of the solution to the state’s budget deficit is economic growth, and he is putting a focus on economic growth as part of his budget,” McMahon said.

Andrew Rudnick, president of the Buffalo Niagara Partnership business group, said the reduction in funding is a concern.

“What they’re trying to do in the Excelsior program cleans up some of the ambiguities in the Empire Zone program,” he said. “So directionally, it’s right.”

But the “very limited resources” being allocated means that “its actual impact . . . isn’t going to be so much,” he added.

“I don’t blame them for that. It’s the reality of the overall budget,” Rudnick said.

The program’s Excelsior New Jobs tax credit would offer between $2,500 and $10,000 per new job to cover part of the payroll. The Excelsior Investment Tax Credit would provide a 2 percent return on total qualified investments. And the Excelsior Research and Development tax credit offers a 10 percent return on new research investments, allowing researchers and developers to cover operational costs of a lab or other facility.

“The new package includes what we think are some of the right tools for economic development going forward,” said Ken Pokalsky, senior director of government affairs at the Business Council of New York State. “We can quibble about the size of the credits, [but] we think the nature of the credits makes sense.”

But the changes won’t actually impact the state’s finances right away. The Empire Zones are slated to sunset on June 30, but spending on it will continue well into the future anyway. That’s because companies can still qualify for benefits for the next few months, and those benefits can last up to 10 years. The state is also not taking away benefits already granted, as long as the companies maintain promised employment and investment levels.