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INCENTIVES IN HARMONY WITH PLAN TO HELP CITY

The city's plan to revitalize Buffalo as a center for biotechnology and other high-tech growth industries seems to fit well with the economic incentives that Gov. Pataki has in mind in his proposed state budget.

Pataki plans $5 million for the University at Buffalo and Roswell Park Cancer Institute to create biotechnology laboratories at both locations.

His recommendations regarding economic incentives are generally limited to providing tax incentives to encourage new industries and job creation, and tax cuts to help existing businesses, particularly banks and utilities.

The main emphasis is on providing tax-incentive carrots to encourage economic growth along with cutting red tape to make it easier to build plants here. The governor also said he will try to reform some mandates that add millions of dollars to the cost of local government.

Alan DeLisle, president of the Buffalo Economic Renaissance Center, a city-run development agency, praised the governor's Urban Job Creation Tax Incentive to provide tax credits of up to $1,000 per job for companies either locating or expanding in the state's cities.

He also likes a proposal that would double the tax incentives for emerging technology companies such as biotechnical firms. Another incentive Pataki proposed calls for preferential tax treatment to start-up companies investing in the state.

"I like the focus I'm hearing on tax credits focused in urban areas and tax credits focused on high-tech companies," DeLisle said. "This is the future of Buffalo, the future of downtown and our medical corridor."

Plans to create a factory-ready site for computer chip manufacturers in West Seneca and the Town of Niagara also are encouraged, with Pataki saying those communities are among 10 statewide to be included in his Chip Fab-New York program.

In addition, Pataki plans to identify another 30 plant sites around the state for emerging and growth industries. City officials hope the South Buffalo Redevelopment Area will be among them.

Existing industries also would get assistance if Pataki's proposals are accepted by the State Legislature. The banking and insurance industry, left out in a tax reduction granted general corporate taxpayers last year, would see the top rate imposed on their net income drop from 9 to 7.5 percent.

"We wholeheartedly support this and believe it's in the best interest of the state and not just the banking industry," said Gary Paul, senior vice president of corporate finance at M&T Bank.

"New York has one of the highest tax burdens of any state in the country. That discourages new business from entering and decreases the profitability of business already in the state. It all has a negative effect on the New York economy."

The governor also is offering some unspecified tax relief to utilities, claiming it would remove tax barriers to competition and lead to lower energy rates for consumers. Niagara Mohawk and National Fuel are reviewing the proposals.

"We don't have details, but we're generally pleased with what we've heard so far," said Stephen Brady, spokesman for Niagara Mohawk. "It begins to lower taxes customers pay and takes some positive steps towards restructuring the tax code to support a more competitive environment."

Julie Coppola, a National Fuel spokeswoman, said the governor seems to be proposing fundamental changes in the tax structure.

"We're certainly hopeful the end result will be savings for our customers," she said.

The Buffalo Niagara Partnership, the area's leading business organization, also is pleased with the governor's proposed budget, particularly noting Pataki's pledge to try to reform mandates that add to the cost of local government such as the laws governing bidding on public projects, binding arbitration and disability retirements.

"The governor's commitment to a comprehensive reform package are very key to what the Partnership has been advocating through its 'Get Real' program to lower government costs," said Elizabeth M. Pujolas, director of government relations.

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