May 31, 2013
Cautious optimism on tax-free zones
Startup businesses near colleges would pay no tax under proposal by governor
A proposal by Gov. Andrew Cuomo to create tax-free zones around SUNY campuses statewide to encourage start-up businesses is being met with enthusiasm by college, city and county development officials but skepticism by some local finance officials.
The idea is to create spaces on SUNY campuses or within a mile of the campus, that are free of sales, property and business taxes. The plan is awaiting legislative approval. There would be an application process for interested businesses to seek approval from the state.
Employees of businesses opening in these areas would be exempt from paying income taxes. Businesses that would be eligible would be ones that could work with SUNY colleges, creating jobs for recent graduates, for example.
Cuomo promoted his Tax-Free NY program during a talk Thursday at Binghamton University.
Bob Haight, executive director of the Cortland County Chamber of Commerce, said he thinks the idea is exciting for the community, given SUNY Cortland’s presence.
He said he just hopes it works the way it is intended.
“We need to be very careful that it truly supports new business growth or moving businesses here from other states,” Haight said.
SUNY Cortland President Erik Bitterbaum is very excited about the idea.
He imagines various opportunities for all different sorts of businesses, given that SUNY Cortland grads have a wide range of expertise.
“I think we have a variety of areas of strength, education ... it could even be health or kinesiology,” Bitterbaum said.
He said communications or public relations firms could be drawn to the area or outdoor programs.
“We just have to be creative and brainstorm,” Bitterbaum said.
Bitterbaum said the idea could only be positive.
“I think everybody benefits if you can bring new businesses to the state,” Bitterbaum said.
Cortland Mayor Brian Tobin, also a SUNY swim coach, said he thinks the program is a good idea although he does not like the thought of losing tax revenue. But since the proposal is centered on SUNY campuses, it is not taking properties off the tax rolls, he says.
“It is really a bold initiative to try to work on retaining graduates in the state and to try to bring new business into the state,” Tobin said.
Tobin said that he is confident the proposal would be accompanied by proper oversight from the state and could be the incentive needed for a company to locate here.
“This is a competitive advantage for upstate communities across New York in comparison to communities across the country,” Tobin said. He said that a company might be more likely to start up in New York if it knows that by doing so it will not have to pay property or income taxes.
But city Director of Administration and Finance Mack Cook said he is concerned that the tax incentive program would have an adverse impact on vacant properties local officials want to develop outside the designated areas.
Cook used the examples of the former Buckbee-Mears factory on Kellogg Road or BorgWarner property on Luker Road in Cortlandville, both of which lie outside the designated areas that would benefit from a tax incentive.
“Why will somebody talk to me about Buckbee-Mears when they can talk to ... (the college)?” Cook said.
Cook is concerned the city might be thrown into competition with these incentive programs, not something the city is in the position to handle.
“Will they want the same incentives? Or if we can’t fill them are we just compounding our blight problem,” Cook said.
He said there are many unanswered questions about the proposal.
County Administrator Martin Murphy was not available for comment by press time.
Mike McMahon, president of the Cortland County Industrial Development Agency board of directors, said the board had not yet discussed the proposal so he could not comment on it.
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