Lieutenant governor defends tax-free initiative

PHOTOGRAPHER: Bethany Bump

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Tax-free communities: What’s not to love?

State officials are learning that despite their efforts to rid New York of its reputation as the nation’s “tax capital,” not everyone is happy with the governor’s initiative to lure new businesses to the region by promising no taxes for a decade.

One thing’s for sure, said Lt. Gov. Bob Duffy as he extolled the governor’s new Tax-Free NY initiative to Schenectady business and economic development leaders Wednesday: There are always going to be naysayers.

“We keep getting the question, you know, is this fair to existing businesses? It’s a legitimate question, and I acknowledge that,” he said to a group of nearly 100 gathered inside Schenectady County Community College’s Lally Mohawk Room. “It’s a very legitimate question. If you’re in business for 20 or 30 years, you’re probably thinking, ‘how come I don’t get these same benefits?’ ”

Those benefits are plenty — no business or corporate taxes, no sales tax, no property tax, no franchise fees and no state income tax for owners or employees of new or out-of-state businesses that locate in New York on or within 200,000 square feet of a SUNY campus.

Startups and existing businesses can soak up the incentives, too, so long as they expand their operations while maintaining existing jobs. The tax-free zone would also apply to about 3 million square feet of space around private colleges and 20 state-owned properties.

The goal is to lure the businesses that have long been choosing to locate in Texas, Pennsylvania, North Carolina and other states instead of New York. Officials also hope to get the students that are being educated at New York schools to stay here after they graduate. Ideally, these new businesses and jobs would spur further economic development throughout the state.

Of course, the proposed initiative has yet to become law. The Cuomo administration is hoping for passage before the current legislative session ends June 20, Duffy said.

“The best way I can explain this is the governor has taken a step,” said Duffy. “This is something he can do and really has a chance to go ahead and create investments and job creations on and near our campuses. There could be disparity perceived with existing businesses because he can’t do this across the board everywhere. I think the best thing we can do, though, is to keep looking at ways to lower taxes, lower costs and reduce regulations on businesses.”

If New York wants to reverse its reputation as the “Vampire State,” said Nancy Gold, it should start by making it easy for manufacturers to do business here.

Gold owns Tough Traveler, a Schenectady-based manufacturer of baby carriers, luggage, backpacks and other bags. She attended Wednesday’s event at SCCC hoping to speak with someone, anyone, about how difficult it is for her business to compete with Chinese manufacturers and about how unfair the governor’s new initiative seemed to her business of 40 years.

“He was an excellent speaker,” she said of Duffy. “But this seems very unfair. I’d like to see New York state be more interested in manufacturers if they’re going to be giving something away. This is asking for new businesses, and we know that most new businesses fail. So then you’re investing in things that won’t necessarily go anywhere.”

Some of the eligibility requirements are not yet clear. Gov. Andrew Cuomo has said the new businesses must be “education-related” or have a relationship to the SUNY school’s academic mission. This seems clear-cut for new businesses looking to locate near a highly specialized school like the University at Albany’s College of Nanoscale Science and Engineering but less obvious for would-be neighbors of a general studies school like Fulton-Montgomery Community College in Johnstown.

“These young men and women who are going to class can now walk into internships right on their campuses and work and learn and then when they graduate they can work and stay here,” said Duffy.

But United University Professions, a union representing faculty of state-run campuses, echoed the concerns of existing businesses Wednesday morning. It condemned the governor’s initiative for the lack of legislative oversight it would create for these new businesses as well as the “unfair competition” it would create for “current, taxpaying businesses that rely on the patronage of SUNY employees and students.”

Chamber of Schenectady County President Chuck Steiner said his chamber has no official position on the initiative but admitted he finds it hard to argue with anything that creates jobs.

“The reality is it’s expensive to do business here in New York,” he said. “Now, how we look at the solution to this problem and how best we can motivate businesses I think needs further discussion and further research on our part.”

SCCC President Quentin Bullock said he’s not heard any negative feedback from the local business community about the new initiative, only positive buzz.

“I anticipate we will get some very positive outcomes, once this is official, for the college to find new business partnerships that align with this new Tax-Free NY initiative,” he said. “We have some very exciting programs that are responding to current workforce needs in areas like nanoscience, alternative energy technology, and we have new programs that are on our horizon that will support new industry in this Capital Region.”