The Trump administration has approved portions of 10 Long Island communities to participate in a new anti-poverty program established by the federal tax overhaul in December, state officials said.
Designated as Opportunity Zones are two census tracts each in Hempstead Village and Riverhead Town, and one each in Central Islip, Glen Cove, Huntington Station, Long Beach, North Bellport and Wyandanch.
The Opportunity Zone community development program offers tax incentives to private investors who reinvest their profits into businesses located in low-income areas. The businesses in turn hire zone residents.
“Attracting needed private investment into these low-income communities will lead to their economic revitalization, and ensure economic growth is experienced throughout the nation,” said Treasury secretary Steven T. Mnuchin, whose agency will administer the zones.
The local census tracts were among 514 nominated by Gov. Andrew M. Cuomo to Treasury. His nominations were based on recommendations from the Regional Economic Development Councils this spring.
Treasury approved all of Cuomo’s nominations, state officials said this week.
The Long Island Regional Economic Development Council sought suggestions from the counties, towns and villages, said Kevin Law, council co-vice chairman and president of the Long Island Association business group.
“There were 40 to 50 possibilities, and we had to pick 10,” he said at a council meeting last week at Hofstra University. “We tried to be equal” between the counties.
To be eligible, a census tract must have an individual poverty rate of at least 20 percent and median family income no greater than 80 percent of the area median.
Tracts that were suggested to the development council but did not make the final cut include Mastic Beach, Center Moriches, Mastic-Shirley, Brookhaven hamlet and Middle Island.
The zone program differs from other initiatives in that investors do not receive upfront tax credits, according to John W. Lettieri, president of the Economic Innovation Group, a Washington-based think tank who helped design the program. He told Congress last month that when investors put their capital gains from other investments into a business in a zone, the investors receive tax breaks over time on profits earned from that business. If the investor holds onto the investment, capital gains are tax-free after 10 years, he said.
Law called the zone program last week “one of the few good pieces of news coming out of Washington these days.” He and others, most notably Cuomo, have criticized the Tax Cuts and Jobs Act of 2017, which created the zone program but also capped at $10,000 per year the amount of state and local taxes that New Yorkers can deduct on their federal income tax returns.
Cuomo’s economic development czar, Howard Zemsky, said the federal program complements state initiatives to redevelop downtowns and blighted neighborhoods.
The Treasury Department has designated portions of 10 communities to participate in a new anti-poverty program, called Opportunity Zones:
SOURCE: Empire State Development