applauded by beneficiaries as an important move to keep the Empire State competitive, but banks in New York City say it's not enough.

New York's Legislature has signed off on a plan to cut corporate taxes on banks and insurance companies from 9% to 7.5% over three years. Banks alone would save an estimated $100 million per year upon full implementation.

But the city taxes banks an additional 9%. And unless that is reduced, bank executives say, some of the city's smaller institutions may have to move to the suburbs.

There are banks in the city that could choose to move out if there is a difference in taxes, said Mariel O. Donath, president and chief executive officer of the Community Bankers Association of New York.

Though stopping short of predicting a move, John W. Tietjen, chief financial officer of $1.1 billion-asset Sterling Bancorp in Manhattan, did say he hoped the city would match at least part of the state's tax reduction.

I don't think Sterling will be moving to White Plains, Mr. Tietjen said, referring to a city in suburban Westchester County. But that said, we would certainly welcome anything that could reduce our costs.

The city has followed the state's lead before. New York State last cut taxes on banks in 1985, as part of a general overhaul of the tax code. At that time, the city reduced its tax to the current 9%.

Banks in the city plan to take their concerns to a task force appointed by Mayor Rudolph W. Giuliani. Michael P. Smith, president of the New York Bankers Association, is a member of the task force, which is charged with examining the city's entire tax code.

Regardless of whether the city tax is reduced, bankers statewide are praising the cut expected to be signed shortly by Gov. George E. Pataki. Banks and insurance companies were excluded from a cut in corporate taxes from 9% to 7.5% that was enacted last year. Banks were concerned because that cut applied to businesses that banks compete with, such as securities firms.

It's clearly a significant move by the state, no matter what happens in the city, said Mr. Smith. The lines between what securities firms and banks do are disappearing, and to have one group taxed differently from another makes it very hard to compete evenly.

The cut to 7.5% puts New York at a competitive advantage against at least one neighbor. Connecticut banks, like all corporations in the state, pay a 9.5% tax.

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