Plan Would Open Up Campus Property for Private Businesses
By Mara Gay
June 20, 2013
ALBANY—Gov. Andrew Cuomo's most straightforward victory in a messy legislative session here is expected to be on a plan to create tax-free zones for new businesses on college campuses.
As Mr. Cuomo's other priorities—such as public financing of political campaigns and changing state law on abortion—have languished, the business legislation, named "Start-Up New York," will likely be approved in votes on Friday in the Assembly and Senate.
The proposal is aimed at drawing high-tech companies to economically struggling areas upstate. Startups and companies that relocate to vacant land on State University of New York campuses and selected private colleges would be exempt from paying state taxes for 10 years. To keep their tax-exempt status, the companies must create new jobs in the state.
As an added incentive, the first 10,000 employees hired in the tax-free zones each year would be exempt from paying state income tax for five years.
"We desperately need to jump-start the upstate economy," Mr. Cuomo said this week.
The proposal is focused on upstate, but lawmakers from New York City and its suburbs lobbied successfully to include downstate zones, too. For example, a tax-free zone would be established on one City University of New York campus in a high-poverty area in each borough.
"There's also a great need downstate as well, particularly when you talk about populations of the chronically unemployed and underemployed," said Assemblyman Karim Camara, a Brooklyn Democrat.
The tax-free initiative received support from prominent executives such as JPMorgan CEO Jamie Dimon and GE Chairman Jeffrey Immelt. Legislative leaders signaled their support on Wednesday.
Under the proposal, private colleges and universities looking to establish tax-free zones must compete for a limited amount of vacant land available for the program each year, and receive the approval of a three-member board consisting of appointees of the governor, the state Senate and the Assembly.
The same is true for CUNY campuses not chosen under the initial plan.
Meanwhile, only certain businesses can apply. Retail, real estate and other businesses are precluded in favor of high-tech, biomedical and venture capital companies.
Matt Ryan, executive director of the Alliance for a Greater New York, a liberal-leaning lobbying group that works with unions, said he was skeptical. "These are programs that start out and pretty quickly spiral into costly endeavors with dubious results," he said.
To read the full article, visit The Wall Street Journal.
Also appears in Barron's.