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Lower taxes not in Dinkins job plan.

In keeping with his contention that trickle-down Reaganomics is to blame for the city's woes, lower taxes or tax incentives were conspicuously absent from a set of new economic growth initiatives announced by New York City Mayor David Dinkins last week.

Less than two months before election day, the mayor has released his "Strong Economy, Strong City" plan, which targets a number of potential growth industries such as technology, fashion. and bio-medical research.

The plan, expected to create 110,000 jobs over a period of four years, is to be spearheaded by Barry Sullivan, deputy mayor for Finance and Economic Development.

Sullivan told REW last week that the further lowering of taxes would require replacement revenue from some other source. He said this plan was "a much more targeted approach."

"People who advocate lowering taxes don't realize the deficit in the city's budget based on the [current] four-year plan," said Sullivan referring to the freeze on property taxes, water and sewer rates, lowered commercial occupancy tax for a number of small businesses and other forms of relief that the city has delivered.

While the city in the last four years has lost three times the number of jobs than this plan will create, in his announcement speech at Brooklyn's Metro Tech, Dinkins cited "the ravages of Republic recession." In an address to the Associated Builders and Owners (ABO) last week, the mayor said New York as an "urban center" was ignored by previous national administrations.

While he acknowledged the Dinkins administration's reluctance to link jobs with taxes, Steven Spinola, president of the Real Estate Board of New York, said the realities are difficult to ignore.

"Taxes in New York are still too high,"

According to Spinola, when taxes in New York are roughly 20 percent and taxes in Connecticut are around 13 percent, firms considering entering the Big Apple or expanding beyond their current space needs will be tempted to investigate options in that and other states.

While Spinola lauded the plan for its identification of potential growth industries, he is not sure it will have the purported impact on job growth and, in turn, demand for office space. The report also, he said, neglects to emphasize the importance of the central business district, which is defined as Manhattan south of 60th Street.

Among the initiatives in the 20-point plan are:

* Venture capital funds to assist beginning and mid-staged companies that develop and use advanced biotechnologies and information technologies

* A "Jobs Growth Venture Fund" to make available long-term equity capital for small and mid-sized firms that locate in New York for such enterprises as manufacturing, business services and recycling

* A Center for Fashion Design, in conjunction with the Fashion Institute of Technology, a Software Center an new biotechnology centers that will provide incubator space for fledgling companies in these fields

* A $250 million commitment by the city over five years to fund the New York City Economic Development Bank that would launch projects that could attract state and federal funding

* A number of initiatives that ease regulations for small businesses
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Title Annotation:New York, New York Mayor David N. Dinkins announces economic growth initiatives
Author:Fitzgerald, Therese
Publication:Real Estate Weekly
Date:Sep 29, 1993
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