The AFL-CIO and three state employee unions are slamming an economic-development agreement that Gov. Andrew Cuomo reached with the leaders of the Assembly and Senate. Cuomo proposed Tax-Free NY, which has now been changed to START-UP NY, which will allow start-ups to locate on or near State University of New York campuses and operate tax-free. START-UP stands for SUNY Tax-free Areas to Revitalize and Transform UPstate NY.
The unions are particularly unhappy with the START-UP provision that exempts employees of the businesses from state income taxes for up to 10 years. In the second five years, there would be no taxes on wages up to $200,000 for individuals, $250,000 for a head of household and $300,000 for taxpayers filing jointly. The number of net new jobs eligible for personal income tax benefits won’t exceed 10,000 a year.
“Individuals granted favored status under the proposal, as well as their families, will consume state services, but unlike other New Yorkers will be exempt from helping to pay for them; that’s just not right,” Mario Cilento, President of the New York State AFL-CIO, said in a statement.
The legislation passed both houses yesterday.
Campuses outside New York City could use vacant land on campus and vacant space in buildings for the company. Only SUNY campuses north of Westchester County could set up a business incubator with a bona fide affiliation to the school — up to 200,000 square feet within a mile of a campus, or farther with state approval. Private colleges could add START-UP programs with space totaling 3 million square feet, primarily at schools north of Westchester. Each borough of New York City, and Westchester, Nassau and Suffolk counties will be allocated 75,000 square feet each, with the possibility of doubling that.
Cuomo said in a recent statement that START-UP “will foster entrepreneurialism and job creation on a large scale by transforming public higher education through tax-free communities across the state, particularly upstate.” It will attract high-tech and other start-ups, venture capital, new businesses and investments from around the world, he said.
Andrew Pallotta, vice president of New York State United Teachers, said the program “creates more loopholes at a time when the state can least afford it.
“If it becomes law, it would greatly diminish much-needed revenues that could be going to schools, four-year campuses and community colleges. It is bad policy.”
Danny Donohue, president of the Civil Service Employees Association, called START-UP a “corporate welfare gimmick.”