HARRISBURG, Pa. (AP) - Pennsylvania is throttling back on one of its signature economic development programs.

The administration of Democratic Gov. Tom Wolf has sent rejection letters to Philadelphia, Coatesville and other municipalities that submitted applications to the Keystone Opportunity Zone program, The Philadelphia Inquirer (https://bit.ly/2imUS7E ) reported.

The program tries to spur revitalization of abandoned or blighted properties by exempting their owners from local and state taxes.

The Wolf administration said the state can’t afford new tax breaks.

“This is about money, and the state is strapped,” said Jeff Sheridan, the governor’s spokesman.

Wolf signed legislation expanding the program last summer.

But Scott Dunkelberger, an official in the state Department of Community and Economic Development, wrote to rejected applicants that it’s unlikely the state will accept new properties into the program until Wolf gets his way on an overhaul of the state’s tax system to make it “more equitable.”

Sheridan declined comment on Dunkelberger’s letter or say whether Wolf agreed with its assessment.

Critics have questioned the KOZ program’s cost-effectiveness. Boosters say the program, which was created by Republican Gov. Tom Ridge nearly 20 years ago and has been periodically opened to new applicants, has helped create 10,000 jobs and spurred $1.5 billion in private development in communities that are often economically distressed.

Coatesville, a small, financially-struggling city in Chester County, had applied for a KOZ designation for an 88-acre parcel, hoping to spur residential development there.

“We are fighting perceptions, we are fighting history, we are fighting reputation, we are up against it when it comes to Coatesville,” said Sonia Huntzinger, an economic development administrator in Chester County. “We were all holding out hope for the KOZ to help developers think differently about Coatesville.”

Applicants from Clearfield and Elk Counties were also rejected.

Duane Bumb, Philadelphia’s deputy director of commerce, said the KOZ program is one of the state’s most attractive incentive programs to businesses.

“If Pennsylvania doesn’t have an incentive program that can be competitive with neighboring states - and the KOZ program met that role - we are at a disadvantage,” he said.

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Information from: The Philadelphia Inquirer, https://www.inquirer.com

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