Charles A. Gargano, Chairman of Empire State Development (ESD) today issued the Linked Deposit Program annual report noting that last year manufacturers comprised more than half of the 269 businesses that received $110.9 million in linked deposits, generating $213 million in private sector investments. �Manufacturing is the mast of the United States' economic ship,� Chairman Gargano said. �The President has encouraged each state to make support of the manufacturing industry a high priority. New York State under Governor George E. Pataki has been a leader in this initiative." In addition to promoting sound economic programs and initiatives to help manufacturers and other businesses succeed, Governor Pataki has proposed an aggressive new plan specifically designed to strengthen New York's manufacturers. As part of his plan, he recently unveiled a new targeted manufacturing job-training assistance program -- NY SMART -- which will provide manufacturers with the support they need to maintain and enhance the skills of their employees. The Governor has also announced another critical element of his manufacturing plan -- dramatic new reforms to the State�s workers� compensation system that would reduce workers� compensation costs for businesses by more than 15 percent. The new reforms come on top of the historic workers� compensation reforms the Governor fought to achieve in 1996, which already have reduced costs by nearly 30 percent on average. Other key components of the Governor�s new manufacturing plan include: providing a new �Single Sales Factor� tax benefit for manufacturers; extending the highly successful Power for Jobs program; and creating a new Manufacturing Assistance Program � MAP � that will coordinate Federal, State and local assistance programs and will link manufacturing companies to the appropriate research and development grant funding. The Linked Deposit Program, a public-private partnership, provides businesses with affordable capital, based on bank loans at reduced interest rates, subsidized by corresponding "linked" state deposits. Last year, manufacturers utilized the program to support production of everything from pipes to printed products, from giftware to injection molds. Manufacturing firms participating in linked deposits projected the creation of more than 1,000 jobs and retention of 555 jobs. Nearly nine out of the ten manufacturing firms were small businesses with 100 or fewer employees.

�The outstanding performance of the Linked Deposit Program is an open invitation to businesses, especially small businesses in manufacturing, to take advantage of this outstanding resource,� Chairman Gargano said. �We will continue to support the vital enterprises of manufacturing companies in New York State.� The Linked Deposit Program, established in 1993, allows commercial banks, savings banks, savings and loan associations, farm credit institutions and the New York Business Development Corporation to provide loans to small businesses at rates well below the prevailing interest rate, thereby facilitating capital borrowing. The funds are made available to the program on a revolving basis and the amount for new projects is replenished as existing deposits mature. The funds available through the program significantly increased in 2002 when Governor Pataki approved legislation that provided a 75% increase in funds, from $200 million up to $350 million, enabling businesses across the state to grow and create new jobs. ESD also recently enhanced the program by increasing the maximum amount for a linked deposit from $500,000 to $1 million and allowed a borrower to have more than one deposit outstanding at a time. For example, the policy change enables borrowers to receive program assistance for both real estate and equipment loans, up to a lifetime maximum of $1 million, making it more affordable for New York small businesses to invest in facilities and equipment. Linked Deposit is a program that is utilized throughout the state. In addition to manufacturing companies, the program was accessed by service businesses, agricultural enterprises and retail firms.

The following is a breakdown of last year�s projects in each region of the state: Region # Approved Projects LDP Assistance Total Investment By Company Capital Region 32 $13,556,168 $22,390,089 Central New York 29 10,464,350 16,759,191 Finger Lakes 54 20,738,811 42,096,259 Long Island 14 10,199,000 23,564,350 Mid-Hudson 11 4,392,600 9,943,112 Mohawk Valley 19 5,398,853 6,577,828 New York City 16 9,851,495 32,371,050 North Country 5 1,665,000 3,268,000 Southern Tier 31 9,177,399 14,490,802 Western New York 58 25,431,419 41,517,675 Totals 269 $110,875,095 $212,978,356

Businesses interested in New York State�s Linked Deposit Program should contact the Linked Deposit Office at 518-292-5261 or email: jfitzgibbon@empire.state.ny.us, or visit the web site http://www.nylovesbiz.com.

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Media Contact: Scott Flaherty +1 (518) 292-5131 sflaherty@empire.state.ny.us