As the 2013 State legislative session winds down, Governor Cuomo’s Tax-Free NY proposal to jump start Upstate economic development is gaining broad-based support and seems likely to be voted into law.

It is a creative and ambitious plan that has the potential to create and retain thousands of new jobs and the Governor is to be commended for his vision. Previous efforts to attract and retain jobs have cost the state and local municipalities untold millions of dollars, yet have created few jobs and investment in return.

The proposal, now named START-UP NY (A.8096), allows for tax free incentives for businesses to set up on campus or on adjacent property to a SUNY college and a number of private colleges.

While I have had serious concerns about the proposal particularly in Albany, where over 60 percent of property is tax-exempt, I am appreciative of a host of changes (noted below) made to the final version to address my concerns and improve the bill.

Unfortunately, the bill still retains a tax free provision for up to ten years (but capped after the first five). I joined a few members in strongly urging that this provision be dropped completely from the bill, because it's unfair and sets a terrible precedent, and a few changes were made as a result. I still contend this will put neighbor against neighbor in who will be paying income taxes. Further, it is an uneven playing field for existing local small and medium-sized businesses who, unlike their START-UP NY counterparts, will have to pay sales, payroll and property taxes.

Some earlier concerns about the proposal remain but others have been modified, including:

+ The campus or college must consult with the municipality in which the land or space is located in its proposed tax-free NY area and shall give preference to under-utilized properties. Under-utilized property means vacant or abandoned land or space in an existing industrial park, manufacturing facilities, brownfield sites, or distressed or abandoned properties, which shall be determined by factors including poverty;

+ The campus or college shall not accept any application from a business that would compete with other businesses in the same community;

+ The business’s application must describe how it plans to recruit employees from the local workforce;

+ If the business fails to meet performance benchmarks (creating and sustaining jobs) it will be required to reduce the total amount of tax benefits proportionally;

+ Previous economic development proposals have cost the state upfront whereas START-UP NY has NO upfront costs and instead foregoes future tax revenues.

I believe with these changes included, this legislation has greater potential to help provide more job and internship opportunities for the students we educate yet so often lose to other states.