Ben Beagle/Livingston County News
Lieutenant Gov. Robert J. Duffy explains Gov. Andrew M. Cuomo's Tax-Free New York plan during a May 29 presentation at SUNY Geneseo.
Cuomo development plan meets with reservations
Lt. Gov. gets mixed response at Geneseo presentation
Lieutenant Gov. Robert J. Duffy called Gov. Andrew M. Cuomo’s plan to create tax-free communities on and around college campuses to spur economic development a chance to “jump start the economy across the state” during an appearance at SUNY Geneseo.
College officials across the region are commending the plan, which they said will build on existing partnerships between their schools and business communities.
But some local officials have expressed concerns about the plan’s effect on existing businesses, and the amount of details still be worked out by state legislators.
Duffy was at SUNY Geneseo May 29 to “reinforce the governor’s vision that SUNY campuses can be an economic driver.”
“SUNY does a phenomenal job education our kids, but then they leave,” said Duffy, the father of two daughters who have recently graduated college.
Under Cuomo’s proposal, which must be approved by the Legislature, businesses that move onto or next to SUNY campus in upstate New York and some private universities would be exempt from sales taxes, property taxes and business or corporate taxes for 10 years. Employees of the businesses would be exempt from state income taxes.
Duffy said the goal of the plan was to change New York’s reputation as a tax-heavy state, reduce unemployment, and reverse decades old decisions that have created challenges for existing businesses.
“We need to create jobs, and also create bright minds that go into the workplace,” he said.
He noted a number of programs — SUNY 2020, Innovation Hot Spots, New York’s Open for Business, Venture Capital Fund and business incubators, among them — that the governor is using to try and improve the state’s current business climate.
New York City, Duffy said, is a major provider of venture capital to business startups, but the money is leaving the state for other cities such as Boston or Philadelphia. “The governor is trying to reverse that and keep the money in New York,” Duffy said.
Carol S. Long, provost of SUNY Geneseo and who will become interim president Oct. 1, said the plan is “a wonderful opportunity to create synergies between campus, business and young people” to improve the region’s economic development.
“It’s great to have the governor recognize that educational institutions are so essential to the state’s economic development,” Long said.
Dahl, in a statement released soon after Cuomo unveiled his plan, said the initiative, combined with earlier efforts “provides a powerful synergy for economic development, particularly in rural communities like Geneseo and Livingston County.”
Dahl, who was out of town when Duffy’s quickly-arranged visit was scheduled, said SUNY Geneseo “has long been at the forefront of economic development initiatives fulfilling the college’s commitment to be an active participant in our community.” He said the technical expertise of Geneseo’s faculty and the scientific equipment available in its Integrated Science Center “provide a strong inducement for high-tech start-up companies to locate in the region.”
Community colleges are also part of the plan. Genesee Community College in Batavia maintains seven campus centers, including Dansville and Lima in Genesee County. Those centers could be part of the tax-free communities.
“It’s exciting to be a part of this. It’s a big idea that is yet to be hashed out and we have a seat at the table,” GCC President James Sunser told The County News Thursday in an interview following a meeting at the Dansville Campus Center. “For years, colleges have talked about being a robust economic engine for New York, and now we are talking about aligning that with companies.”
Both Long and Sunser pointed to existing programs that have their colleges working to help local business develop. Those programs include training and education for local employees, and also help developing business plans or building entire courses around community needs, they said.
“This initiative has the potential to match the economic capital of emerging businesses with the intellectual capital of our colleges and universities,” Sunser said.
But others are more cautious.
“There are are lot of unanswered questions. I need to know more before I can form an opinion,” said Julie A. Marshall, director of the Livingston County Economic Development Office.
One of Marshall’s biggest concerns is how similar or different Cuomo’s tax-free communities would be to the state’s Economic Development Zones.
“There were a lot of loopholes” in the EDZs, Marshall said. “It began as a great program, but over time the loop holes were taken advantage of.”
Town of Geneseo Supervisor Will Wadsworth questioned how much of the decision-making would be a local process, or if the state thought a proposal fit better in Auburn instead of Geneseo, would the state step in and move the project.
Duffy acknowledge a certain amount of state involvement. “If there is an opportunity to create jobs and benefit Geneseo, I think the governor would want nothing better than for you to drive the process,” Duffy said. “What the governor wants to see is one victory after another. What we want to see are jobs and economic vitality.”
Others feared that those victories could come at the expense of existing businesses. With employees of businesses in the tax-free communities free of state income tax, concerns were raised that employees could leave existing businesses for greener pastures.
Duffy again acknowledged that concern and said that “if someone leaves that company, it creates an opportunity for someone else to come in to that company.
Since Cuomo’s May 22 announcement the plan has faced some backlash from business groups and others who say the plan would create unfair competition and alienate businesses already in New York.
The Civil Service Employees Association, the state’s largest public workers union, has begun an advertising campaign targeting what it calls another “special give away to business.”
Assemblyman David DiPietro, R-East Aurora, whose district includes Wyoming County, was also critical of the tax-free plan in a statement issued Tuesday.
“By creating these in-state tax shelters, Gov. Cuomo is affording a leg-up on competition and creating a two-tier business community: those who have to struggle with the most unfair economic climate in the nation, and those who thrive under a lower tax burden,” DiPietro said.
DiPietro call on Cuomo to extend the tax-free courtesies to the rest of small business community.
“There cannot be one set of rules for those who are hand-picked by the government and another set of rules for those who have struggled and are barely holding on to their American Dream.”
In addition to SUNY Geneseo, SUNY schools in Western New York include colleges in Brockport and Buffalo, the state University at Buffalo, and two-year community colleges Genesee in Batavia, Monroe in Rochester and Finger Lakes in Canandaigua.
About Tax-Free New York
The state Legislature must still approve Gov. Andrew M. Cuomos Tax-Free New York proposal, and some details continue to be worked out. Here are key points from Cuomo’s proposal:
— All SUNY campus outside of New York City and designated private colleges north of Westchester County would be tax free. An additional 200,000 square feet within a mile of the campuses would also be included.
— Up to 3 million square feet of tax-free commercial space at private colleges will be made available. Independent colleges north of Westchester would be eligible — through a competitive application process — to obtain tax-free status. Preference, Cuomo said, would be given to private campuses that have business incubators.
— As many as 20 state properties would also be included in the program. These include prisons, juvenile centers and other empty buildings that are vacant. “They become an eye sore and that doesn’t help a community prosper,” Lt. Gov. Robert Duffy said at a presentation in Geneseo.
— The goal of the tax-free communities is to attract startups, venture capital, new business and investments.
— Approved businesses in the tax-free areas would not have to pay sales, property or business/corporation taxes for 10 years. Employees at these businesses would not have to pay income taxes.
— Companies with relationships to the academic mission of a university and that will create jobs are eligible for the program.
— New businesses, out-of-state businesses that move to New York, and existing businesses that expand while maintaining existing jobs would qualify.