Breaking: Common Council Postpones Vote on Cornell Property Taxes Agreement

On Wednesday, Sept. 20, the City of Ithaca Common Council voted to postpone consideration of the 21-year long agreement between Cornell and Ithaca over a series of payments in lieu of real property taxes (PILOT).  The issue will instead be discussed on Oct. 11.

Under New York State law, governmental units, schools, churches, hospitals, and other charities do not have to pay local property taxes. For that reason, Cornell only pays property tax on buildings that are not used for its educational purpose.

However, because Cornell and other non-profits occupy a large portion of Ithaca’s total land surface, the burden of operating city services is placed more heavily on the remaining property owners.

The industries that used to contribute to the Ithaca tax base – notably Morse Chain and Ithaca Gun Company – have been long closed with no replacement. This leaves Cornell holding 45% of Ithaca tax base, but exempt from paying real property taxes.

In 1995, Ithaca and Cornell agreed to a series of voluntary annual payments over 20 years in lieu of taxes.  Cornell spends an estimated $23 million per year on services that would otherwise have to be provided by Ithaca, such as police, roads and drinking water. So the voluntary payments largely represented the cost of fire protection.  Under the current agreement, the payments grew with inflation, to the point that they now total $1.6 million.  The current agreement expires in June 2024.

On Sept 14, Mayor Laura Lewis and Cornell President Martha Pollack agreed on a new 21-year agreement that would raise the voluntary payment to $4 million per year.  Of that, $800,000 will support city infrastructure and mutual interest projects, including a $100,000 annual grant for Cornell faculty members to work with city officials on issues like sustainability.

The deal is subject to approval by the Ithaca Common Council and the Cornell Board of Trustees.

Meanwhile, Cornell has agreed with the Ithaca City School District to raise its annual voluntary contribution from $500,000 to $650,000 per year. Cornell also supplies free chilled water to air condition Ithaca High School.

On Sept 18, 70 people attended a rally on Ho Plaza seeking to block the deal in hopes of increasing Cornell’s payment even further. The people attending the rally held signs that said, “Cornell Owes Ithaca“ and “Pay Tax On What You Owe.”  The group called the “Make Cornell Pay Coalition” wants Cornell to pay $11 million per year without specifying the sources of such funds.  Because the payment comes from Cornell’s unrestricted budget that is largely funded by tuition, the Coalition’s proposal could result in a $440 per student per year tuition increase.

Several Common Council members have voiced opposition to the agreement, and the outcome of the scheduled October 11 vote remains unclear. Jorge DeFendini ‘22, a Common Council alderman, even co-sponsored Student Assembly Resolution 25 on the subject. Day Hall gave a detailed refutation of that resolution during the negotiations in March 2023.

What Other Ivy League Schools Pay

In 2012, the Lincoln Institute of Land Policy conducted a study of nationwide PILOT payments. This is what the Ivy League schools paid annually:

Penn’s decision to stop paying PILOT was covered by the Daily Pennsylvanian. However, Penn donated $100 million over 10 years to the Philadelphia school system to pay for remediation of environmental hazards.