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Development czar argues for Cuomo's tax-free zones

The state's economic development czar, Kenneth Adams, made

The state's economic development czar, Kenneth Adams, made the case to Long Island executives Thursday that Gov. Andrew M. Cuomo's START-UP NY tax-free zones for businesses will likely boost the economy. Credit: Bloomberg News

The state's economic development czar made the case to Long Island executives Thursday that Gov. Andrew M. Cuomo's START-UP NY tax-free zones for businesses will likely boost the economy and won't reduce tax revenue collected currently by state and local governments.

Kenneth Adams, president of Empire State Development, New York's primary business-aid agency, said governments aren't forgoing funds they now use to pay for police, education, health care and other services because the zone tenants and employees are generally new to the state.

"The income tax that you are sacrificing you never had before," he told a meeting of the Long Island Association, the region's largest business group. "You're not taking money out of . . . school aid or out of the existing state budget."

However, he said the state was "sacrificing" future tax revenue. In August, Cuomo's budget office estimated the state would take in $323 million less over the next three years because of START-UP NY.

Companies admitted to the program will pay no state and local taxes for up to 10 years. Their employees will pay no state income tax for up to 10 years.

The zones are located on or near college campuses; Long Island has three zones so far. Businesses must forge close educational and research ties to the host college.

Adams said 43 companies had been selected statewide for START-UP NY. Together, they have promised to hire 1,868 people and invest $87 million in buildings and equipment in return for not paying taxes.

The Island has six zone tenants -- all at Stony Brook University -- who have pledged to create 90 jobs and invest more than $3 million.

Adams said Stony Brook had received more than 100 inquiries from businesses about START-UP NY and is working with the Farmingdale State College zone to accommodate some biotechnology companies.

Separately, Adams said next year's Regional Economic Development Councils competition for millions of dollars in state business aid would focus on projects that promote exports and strengthen key industries in the state's 10 regions.

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