We supported the idea of tax-free zones on and around State University of New York campuses when Gov. Cuomo first proposed it last year, and still do, even more now that we see what kind of interest it has attracted among businesses. And now that the University at Albany's plan is one of the first eight to be approved in the program, officially called Start-Up NY.
There are other programs that provide tax breaks, but nothing like this. New and expanding businesses in these zones would pay no corporate, property or sales tax to the state or localities for the first 10 years, and their workers no state income tax. As Cuomo has said, you can't get lower than zero. That generated more than 1,000 inquiries by businesses just in the first few months after the Legislature approved the program last summer.
Unlike the defunct Empire Zone Program, which started as a way to help distressed urban areas but morphed into a general giveaway program all around the state, this one will focus on upstate, which is badly in need of economic development. And it wisely aims to use universities as economic engines, a strategy that has worked well elsewhere — in places like Silicon Valley, the Route 128 corridor near Boston and, closer to home, the RPI incubator and College of Nanoscale Science and Engineering in Albany.
We acknowledge the concerns raised by critics. One is fairness: Existing local businesses won't be getting these breaks. But slight reductions in taxes wouldn't be enough to generate strong interest from startups and businesses looking to grow, and eliminating taxes for all businesses isn't realistic. Where would the revenue come from for the state and localities?
Another concern is forgoing tax revenue for 10 years. But these businesses wouldn't be there without the tax breaks, so the various taxing entities wouldn't be getting the revenue anyway.
And the program does aim to protect local businesses by having schools choose fields and companies that fit with their mission and don't compete with local businesses. The University at Albany's plan focuses on forensic science and cybersecurity, climate and environmental sciences, and biomedical and biotechnology.
The idea is that these companies will provide research opportunities, internships and eventually employment for SUNY students, and in some cases be founded by them. That's a good way to attract more students to the SUNY system and to help with one of the biggest problems facing the state: keeping them here after graduation.
Yes, it's a big gamble. But nothing else has been able to shake upstate New York, after losing so much manufacturing the past few decades, out of its economic lethargy. Start-Up NY is worth a try.