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Union College/city dispute part of larger issue

Union College/city dispute part of larger issue

Non-profits that use substantial amounts of public services should have to pay the city in some capa

An obtuse response to an imperceptive request.

I am referring to Union College President Stephen Ainlay’s recent letter in reply to Schenectady Mayor Gary McCarthy’s March correspondence that asks the college to consider making monetary contributions to the city to cover police, fire and ambulance services and would-be taxes on college-owned property.

Don't get me wrong, I enjoy the nostalgia that comes along with the reading and writing of letters, but not here.

These two leaders should have been able to sit down and have a discussion over, say, lunch. Instead, their writing came off as pseudo-formal, with underlying tones of disrespect and overzealousness for public viewing.

McCarthy is to blame for starting things off on the wrong foot, which unfortunately overshadows his strong arguments for receiving financial assistance and Ainlay's use of quantitative data that doesn’t seem to add up.

According to the mayor, the college receives $600,000 worth of public services annually. The accuracy of that dollar amount has been questioned, but what is clear is that this is bigger than just Union.

Non-profits that use substantial amounts of public services should have to pay the city in some capacity. I am not referring to the many cash-strapped organizations with small revenue streams — just behemoths like Union and even Ellis Hospital.

Voluntary payment arrangements between local governments and higher-educational institutes do occur in New York State.

Rensselaer Polytechnic Institute, Cornell University, Ithaca College and Syracuse University all make payments. And with a 2015 endowment of over $436 million, Union can probably afford to offer up some cash to Schenectady.

There is a direct correlation between the number of tax-exempt properties within a taxing jurisdiction and the fiscal health of the taxing jurisdiction.

McCarthy knows this. Ainlay knows this. Many people know this.

Union's 76 tax-exempt properties contribute towards the $1.1 billion worth of properties off of Schenectady's 2015 assessment roll.

While that sounds like a lot (and it is), it is not too bad considering cities like Albany and Troy both have higher percentages of tax-exempt properties — especially Albany — and both are fiscally worse-off — especially Troy.

As someone who is continually focused on the good of the city and the good of its residents, I think tax-exempt properties severely burden Schenectady and, ultimately, its homeowners.

I’m not directly blaming non-profits, but the fact of the matter is that property taxes are the largest locally sourced revenue in Schenectady, as is the case for most municipalities.

If Union and other non-profits continue to widen their footprints within the city, then there should be a public concern about lost revenue.

Granted, in some situations, and as is the case with many of Union’s, the properties obtained by non-profits are in poor condition, need a lot of work and are not contributing in property taxes due to owner abandonment or vacancy.

But we have to acknowledge that the removal of properties from a tax roll has an enormous long-term adverse effect on taxing jurisdictions.

That's not to say that educational institutes, religious organizations, community centers and other non-profits don't deserve tax credits and breaks, because they do, but should it come at the expense of local governments and school districts? Should they be the ones to suffer?

This is why McCarthy wants Union to pay up as much as it can, but as Ainlay made clear, the college provided nearly $300 million worth of economic contributions to the Capital Region in 2013 by way of neighborhood investment and impact on local businesses.

I know Union’s Kenney Community Center serves Schenectady well through volunteer programs and outreach initiatives. There is no refuting that. But I’m not sure how much the college is, as Ainlay put it, “a catalyst for economic growth.”

My problem with the college president’s argument is that he provides no additional information for his $300 million claim; we don’t know what economic measurements were used.

I recognize Union’s substantial neighborhood investments, which could be calculated by using full value property assessments, but there is nothing to substantiate Ainlay’s entire argument on business impact.

My guess is that the formula he used for that calculation uses a heavy dose of deductive reasoning.

We've all heard of how important Union is to Schenectady, and it is, but what about the city's contributions to the college?

Improved public services aside, public-private investments continue to revitalize and beautify the city’s downtown and nearby mixed-use areas and is a major recruitment tool for Union.

Many businesses offer goods and services oriented towards young adults, so there is a lot for students to do in close and safe proximity to the campus.

It should come as no surprise that I am not optimistic that McCarthy and Ainlay can come to a compromise, particularly because there is no incentive for Ainlay to do so, and their public spat has continued to play out in the papers in recent days.

I wish one side wasn’t blinded by hubris and the other by pride.

I wish both sides would act like investment partners and not bitter rivals.

Unfortunately, that is not the case; not at this point in time.

Just remember, more is at stake than endowment numbers and tax rolls. People are impacted. Lives are effected.

McCarthy is right — Schenectady deserves financial assistance from the non-profit sector. I just hope he has better luck going forward and reevaluates his strategy and conduct.

Robert Caracciolo is a native of Schenectady and regular contributor to The Sunday Gazette.

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