Pairing economic development with the SUNY system “Tax Free New York” aimed at attracting new business

Special to The Rockland Times

Ken Adams
Ken Adams

Will “tax free” be the answer to the state’s nagging problem of re-booting upstate’s sagging economy?

Since rolling out “Tax Free New York” in May, Gov. Andrew Cuomo and key staff members have been touring the state promoting the initiative. The goal of the ambitious program is to lure start-up companies and existing businesses to New York, co-locating them on or close to the state’s 64 SUNY/CUNY campuses to help spur job creation.

Ken Adams, president of Empire State Development, brought the proposal to the mid-Hudson, visiting Orange County Community College on June 12 and Westchester’s Purchase College this week. While all state campuses are eligible to participate, Adams said the focus is on bringing new business to “upstate SUNY schools in areas where the economy has been hardest hit.”

Using Albany’s College of Science, Nanoscale & Engineering’s success in luring high tech businesses to its campus as an example, Cuomo and his cabinet have been actively encouraging business leaders and local economic development agencies to push for the legislation that would replicate CSNE’s success on all of SUNY’s campuses to be approved.

Adding Article 21, “Tax Free New York,” to the state’s current Economic Development Law would allow start-ups (preferably, but not limited to, the high-tech industry) and existing businesses to partner with the state’s 64 SUNY/ CUNY colleges, either in existing space on the campus itself or within a one mile radius of the school on a tax-free basis for up to ten years.

Those businesses chosen to be in the “Tax Free NY” loop, as well its employees would be entirely exempt from all state taxes, including income tax for all employees, for the first five years; for the next five years, they would pay tax on any net income over $250,000. Businesses will have an option to lease space on campuses for up to 40 years. Where there is no space available either on campus or within the one-mile radius, an exemption may be made depending on the circumstances. Adams said this would be on a case-by-case basis due to CUNY’s limited available space.

Adams conceded there was nothing to tie the businesses down once the ten-year period was up, “but in that time, we hope to make the changes necessary to make staying in New York much more attractive than moving out of state.

“’Tax Free New York’ would give the state the leverage it needs to attract business here and put us on a level playing field with Florida, Texas and other states that offer tax-friendly incentives,” Adams told his audience, comprised largely of pro-business, pro-development leaders. “New York is consistently seen as a place that is not ‘tax friendly.’ We are taking a bold step to give New York the curb appeal it needs to be competitive and changing our ‘business unfriendly’ persona.”

Under the initiative, businesses applying for space in a Tax Free New York zone cannot not exceed 200,000 square feet in size and would have to be non-competitive with existing businesses in the areas they locate to. In addition, the business would be required to work with SUNY to create specific programs to promote job creation in the company’s respective industry.

In a May 22 press release, Cuomo introduced the measure as one that would make communities across upstate “a magnet for new businesses, new startups, new venture capital and new jobs, taking our economic development and job creating efforts to a level never seen before.”

Private colleges and universities would also be incorporated into the plan on a smaller scale, while CUNY schools—due to the limited space in the five boroughs– would have certain criteria to meet eligibility requirements. Those requirements, conceded Adams, have not been entirely nailed down. “To some degree, this is a work in progress,” he said. “What we need is Legislative approval to get the program up and running.”

“We don’t have all the details ironed out,” Adams continued, “but this is a bold step in the right direction to bring new or existing businesses to the state.”

Adams added that, in situations where there is no space available within the tax-free zone, exemptions might be made depending on circumstances.

Some details that need ironing out include who will administer the program once it has started up and qualifying potential candidates’ qualifications. Another pitfall, pointed out by Orange County Partnership president Maureen Halahan, was the potential for a business that might require new construction for its purpose rather than using existing space. “That is one of the issues we will work on,” said Adams. “First, we need approval to get the ball rolling.”

The Legislature goes on its summer break Thursday, June 20. “If we get “Tax Free New York” approved before lawmakers go home, we will have the summer to get the devil out of the details,” Adams told his audience.

There is a vocal movement of detractors of the bill. “This report clearly shows that New York State leads the country in making bad economic development choices by investing in huge megadeals that yield limited numbers of jobs yet cost our state billions in lost revenue,” said Ron Deutsch, executive director of New Yorkers for Fiscal Fairness. “IBM, despite getting $800 million in state economic development money since 2000, is now laying off hundreds of workers in the Hudson Valley and creating a big hole in the Dutchess County economy. This is another clear indication that these megadeals simply do not work and another sure sign that the Governor’s Tax Free NY initiative is doomed to yield the same results.”

You must be logged in to post a comment Login