Former Morgan Stanley CEO John J. Mack told a Long Island audience Tuesday he was skeptical when he originally heard about Gov. Andrew M. Cuomo's plan for some businesses to pay no taxes for 10 years if they move to a college campus.
"I said, 'Wait a minute -- no taxes, [and] you will help with facilities? It can't be true,' " the executive said. "This is not a governor talking."
Mack, now a state adviser, joined Cuomo at a Melville hotel to launch the initiative, SUNY Tax-free Areas to Revitalize and Transform Upstate NY, or STARTUP-NY. Despite its name, the program will be available on the Island and in New York City.
Cuomo said STARTUP-NY aims to attract growing companies to the state and encourage those already here to expand.
He also said it will combat the state's reputation as a taxer and regulator. "We can say to businesses . . . 'You think New York: high taxes. Think again,' " Cuomo told the crowd of 350 people at the Melville Marriott.
Under the program, he said, eligible companies would pay no state or local taxes for 10 years, and their employees would pay no income taxes for at least five years.
Two weeks ago, the nonpartisan Tax Foundation said New York State has the worst tax climate for businesses in the country.
Participating universities are expected to begin accepting applications on Jan. 1 from eligible companies, which on Long Island must be either startups or high-tech. Colleges will recommend applicants to the state for approval.
Cuomo said businesses would benefit from academic research and access to young workers.
The program will start with 68 tax-free zones across the state, including land or buildings at Stony Brook University, Farmingdale State College, SUNY Old Westbury, Nassau Community College and Suffolk County Community College.
Stony Brook has set aside for the program land in Calverton and more than 13,000 square feet in four campus buildings, according to startup-ny.com. SUNY Old Westbury has vacant land and 6,000 square feet in a sciences building. Farmingdale State has nine acres along Route 110.
Private universities, such as Hofstra, will be able to propose their own tax-free zones, subject to state approval. Up to 150,000 square feet of space would be available in each county.
Kevin Law, president of the Long Island Association business group, suggested vacant land at the Kings Park and Pilgrim State facilities also could be tax-free zones. This is possible under the STARTUP-NY legislation adopted by state lawmakers in June.