By Lawrence Wittner
June 22, 2013
Should a public university be transformed into a corporate welfare project? That’s the key question surrounding “Tax-Free NY,” a new plan zealously promoted by Gov. Andrew Cuomo, with nation-wide implications.
Under the provisions of his scheme, most of the 64 campuses of the SUNY system, some private colleges, and zones adjacent to SUNY campuses would be thrown open to private businesses that would be exempted from state taxes on sales, property, the income of their owners, and the income of their employees for a period of 10 years. According to the governor, this creation of tax-free havens for private, profit-making companies is designed to create economic development and jobs, especially in upstate New York.
Joined by businessmen, politicians, and top SUNY administrators, Cuomo has embarked on a full court press for his plan. Tax-Free NY, he announced, was “a game-changing initiative that will transform SUNY campuses and university communities across the state.” Conceding that these tax-free zones wouldn’t work without a dramatic “culture shift” in the SUNY system, Cuomo argued that faculty would have to “get interested and participate in entrepreneurial activities.” As he declared in mid-May, the situation was “delicate, because academics are academics. . . . But you can be a great academic and you can be entrepreneurial, and I would argue you’d be a better academic if you were actually entrepreneurial.”
In fact, the commercialization of American college and university life has been advancing steadily in recent years. Thousands of U.S. students are paid by businesses to market products on their campuses, large numbers of university presidents serve on one or more corporate boards, administrators sport new titles such as Kmart Chair of Marketing and BankAmerica Dean, and for-profit universities now dot the American landscape. Indeed, some universities run their own industrial parks, venture capital funds, and joint business-university research centers.
Even so, Tax-Free NY appears to be an important milestone in the corporatization of higher education, for SUNY is the nation’s largest public university system. Only a few years ago, state law prohibited businesses from operating on SUNY campuses. But that barrier has been swept away, and SUNY Chancellor Nancy Zimpher is now a leading cheerleader for Tax-Free NY.
SUNY’s faculty and staff, on the other hand, have a greater stake in preserving the university’s traditional role of education and the advancement of knowledge. United University Professions, the union that represents 35,000 faculty and other professional staff on SUNY campuses, has been disturbed for years by the state government’s abandonment of its legal commitment to fund public higher education. Over a four-year period, SUNY lost nearly $700 million in state support through budget cuts, and state funding has remained flat over the past year. Today, nearly 75 percent of the university’s operating budget comes from ever-rising tuition and fees. A decade ago, the state covered 75 percent of SUNY’s budget.
Naturally, then, UUP has promised to fight against this latest assault on the university. Rejecting Tax-Free NY, it argues that any available space on SUNY’s campuses should be dedicated to improving education through smaller class size and improved student services, that there are no assurances that business entities would support the academic mission of campuses, and that the tax-cutting plan would diminish tax revenues that could be used for public education.
Also, there is considerable doubt that Tax-Free NY will spur economic growth. The Citizens Budget Commission, a business-backed group, has reported that New York already spends about $7 billion annually to foster economic development without any evidence that this funding has been productive. The Alliance for a Greater New York, a group with a liberal orientation, has noted that, in the past year, the state gave away $490 million to businesses for projects through its Industrial Development Agencies.
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