For years, business owners have argued that New York's high taxes hold back job and economic growth. If they're right, Gov. Andrew M. Cuomo's new Tax-Free NY plan to turn the state's college campuses into tax-free incubators for companies might bolster the argument for cutting taxes everywhere.
Cuomo's proposal would allow new businesses or businesses that create truly new jobs through collaboration with programs at SUNY campuses to operate for 10 years, on or within a mile of those campuses, free of state and local taxes. Businesses would pay no sales tax and employees would pay no state income tax, nor would the employers. The program would also be open to certain CUNY schools and community colleges, and a version would exist for private colleges.
Spurring economic growth is difficult in New York, and the farther a community is from New York City, the truer that is. Upstate is suffering. The incentives offered by Empire Zones and free-standing tax-credit programs haven't really helped. One bright spot far from the city, the sustained growth of the nanotechnology industry in cooperation with the University at Albany's College of Nanoscale Science and Engineering, is what led Cuomo to this idea.
The plan can't hurt. It doesn't cost anything to try. It could create jobs. But the execution must be done well. Tight controls should ensure that the jobs created are truly new, or at least new to New York. Otherwise, all we'll see is less tax revenue, not real growth. Controls must also ensure that projects accepted by the colleges and the state are worthy, and not just the brainchild of a politician's relative.
The State Legislature should carefully scrutinize Cuomo's bill, and it rings true, pass it. If the program succeeds, it will bolster the argument for tax cuts that might make New York's business environment competitive across the board, and not just across the campus.