State budget director hints Hudson could play part in ‘Tax-Free’ program
GREENPORT–Governor Cuomo’s budget director, Robert Megna paid a visit to Columbia-Greene Community College last week to announce plans for no new state taxes on businesses that launch start-up companies at or near college campuses. In fact the plan calls not just for no new taxes, it calls for no state or local taxes at all.
The program, called Tax-Free NY, was rolled out by the governor and subordinates like Mr. Megna around the state Thursday, May 23, extolled by Mr. Cuomo and given a cautiously favorable response by leaders of both houses of the state legislature as a way the state can encourage the creation of new, private sector jobs. The exemptions will require approval of both houses of the legislature.
Although many details remain to be worked out, Mr. Megna outlined the overall plan to about 40 people from Columbia and Greene counties, saying that Tax-Free NY is “the next step in the governor’s ongoing efforts to revitalize the state’s economy, especially the Upstate economy.” Under the Tax-Free NY, new businesses and spinoffs of existing firms that would create new jobs in the state rather than exchanging one set of workers for another, could legally claim exemptions from state business income taxes, sales tax and property taxes for a decade and their employees would not face any state income tax for five years.
Mr. Megna said the plan focuses on college campuses as a way to build on the success of the University at Albany College of Nanoscale Science & Engineering. That recently established institution has attracted significant private, high technology investment and the state also expects to develop a similar campus in Rochester. The Tax-Free NY proposal envisions other campuses spawning or attracting different kinds of development and investment.
The pitch for the tax exempt program includes the statistic that 93% of the state’s population lives within 15 miles of at least one of the 64 SUNY campuses, which include two-year schools like Columbia-Greene. There was no information last week about which private institutions might participate in the program, although Mr. Megna said there would be three million square feet of eligible space at private universities and at 20 “strategic state assets.”
Some of the SUNY campuses have unused space that would be considered as part of the 200,000 square feet of office and industrial facilities where businesses could locate and be eligible to participate in the Tax-Free NY program. Asked whether the state would contribute to infrastructure improvements at the colleges to help them attract businesses, Mr. Megna said that would be determined on a case-by-case basis.
Former Hudson Mayor Richard Scalera (D), now a county supervisor from the city’s 5th Ward, asked Mr. Megna why the state didn’t revive the Empire Zone program, which offered tax incentives to businesses that located in low income neighborhoods. Mr. Megna said that the Empire Zone concept had failed and that some developers had exploited loopholes in the system while never creating the jobs that were promised. “This program is different,” said the budget director.
Addressing questions about how far from a campus a new business could set up shop and still qualify for the tax exemption, Mr. Megna said the decision would be made by groups like the Regional Economic Development Council for the Capital Region, which includes representatives from Columbia and Greene counties. He indicated that it was possible that space in Hudson would qualify as near enough to the Greenport college campus for Tax-Free NY eligibility, but he phrased his answer as a question.
Columbia-Greene Community College President James Campion said he and other SUNY college presidents had only learned about the program the previous day but that he was “thrilled” by the concept, which he said represented “very innovative thinking.”
The press release from Governor Cuomo’s office on the Tax-Free NY program contained statements of support from both Republican state Senator Dean Skelos (R-9th) and the other co-leader of the Senate, breakaway Democrat Jeffrey Klien (D-34th), as well as Assembly Speaker Sheldon Silver (D-65th), which would seem to indicate the possibility that a bill for Tax-Free NY could pass in both houses of the legislature before the session ends next month.
Mr. Megna said he does expect a bill creating the Tax-Free NY to become law “very soon,” adding, “I work for a very impatient man.”