So, now the easy part is done. Gov. Andrew M. Cuomo has reached an agreement with legislative leaders on his proposal to create tax-free areas for certain businesses in New York State. The question now is, what does New York need to do to make it work?
The plan has been changed since Cuomo unveiled it last month. The benefit has been watered down so that no more than 10,000 employees can qualify for its income tax exemption. His proposal contained no cap. The program was originally focused on upstate, which desperately needs the help, but will now include more downstate areas, which do not.
But this is New York, and when one child gets something, the other has to, as well. Even the name has changed. Rather than Tax-Free NY, the program will be known as Start-Up NY.
Regardless, it remains a potential game-changer for upstate, including Western New York. Under its provisions, vacant land or buildings at public colleges and up to 3 million square feet of space at private campuses will be available to new business expansions.
Those businesses will not have to pay state income, sales, franchise and other taxes, as well as property taxes, for 10 years. Colleges could also buy land outside their core campus areas and lease to businesses for the same benefits.
The main goal is to attract business and jobs to upstate, but in a way that maximizes the benefit. To qualify, businesses would have to be engaged in work that meshes with the university’s focus. Thus, the hope is not only to expand the upstate economy, but to retain graduates who are educated in New York but who too often leave to find jobs, often in lower-tax states.
It’s a powerful idea that includes some safeguards to reduce the possibility that an untaxed business would gain a financial advantage over a nearby competitor. Given the unlikelihood of significantly lowering New York’s punishing tax burden, this may be the state’s best opportunity to overcome the disadvantage Albany has created.
The question is, what’s next? What does the state need to do to be productively aggressive about letting the rest of the world know about this program? There’s a din out there and no one should presume this program will attract attention on its own.
Will a version of the “new New York” ads, such as the one featuring Warren Buffett, be distributed? We presume so, but no one has said. What about Canada? Is Cuomo prepared to rub Canadians a little more raw by pitching to businesses there? He should.
At least as important, New York needs to create a smooth system that quickly guides business from application to ribbon-cutting. Companies may jump at a no-tax program such as this, but they can still be tripped up by needless red tape.
In Western New York, the Regional Economic Development Council is well-placed to help with businesses interested in locating here.
Its leaders, developer Howard Zemsky and University at Buffalo President Satish Tripathi, are all but tailor-made for a program that combines economic development with SUNY campuses.
“Our core mission is education, research and service,” Tripathi said. But, he added, “we don’t live on an island. We live in the community, and part of the mission is the economic well-being of the community.”
A half-dozen companies have already expressed interest in locating in the Albany area, and while none have been reported by the University at Buffalo, as yet, the region has the campuses, the space and the workforce to attract the attention of businesses looking to start up or expand operations. We need to be ready for them.