President Martha Pollack and Mayor Laura Lewis have negotiated a 21-year agreement to make a $4 million per year voluntary payment in lieu of real property taxes. The deal has been scheduled for Ithaca Common Council approval on October 11.
The agreement replaces an earlier deal which resulted in a $1.6 million voluntary payment for the current year, but that agreement expires in June 2024. The new proposed agreement would double the unrestricted voluntary payment to $3.2 million per year and also donate an additional $800,000 for mutually agreed upon projects.
The agreement drew letters to the editor of the Ithaca Journal urging its defeat or modification. The implication is that Cornell must do more than the agreed upon $4 million voluntary payment to support Ithaca finances.
Several members of the Common Council indicated that they will vote down the agreement. Two of them also participated in a demonstration against the proposal on September 18. As a part of that demonstration, the pair joined a group that sat in the street blocking traffic on city-maintained College Ave in Collegetown just beyond the edge of the campus.
Instead of a true act of civil disobedience, where protestors are willing to face the consequences of their illegal acts, the September 18 demonstrators cynically chose their sit-in site knowing that the Ithaca Police would not arrest Common Council members.
Ithaca’s Future Lobbying
Opponents of the new agreement object to Paragraph 6 which limits the lobbying activities of the City to impose real property taxes on Cornell. The paragraph, which is continued from the agreement governing the prior 20 years, reads:
The City of Ithaca acknowledges that in making voluntary monetary, material, and in-kind contributions to local municipalities, school districts, and community organizations, Cornell University neither intends to waive its tax-exempt status afforded by the laws of the State of New York nor to enter into a contractual arrangement for payments in lieu of taxes. The City further agrees that during the life of this Memorandum of Understanding it will take no step to seek a change in that status of the University, whether through judicial, legislative, or other means. The University acknowledges that nothing in this Memorandum of Understanding modifies the obligations of the City pursuant to federal, state, and local law.
Cornell’s exemption from the real property tax is a feature of state law, and it is highly unlikely that the City of Ithaca or the local left-wing activists could convince the New York State Legislature to change the law for all charities or even a special Cornell-specific provision. So, Ithaca has not given anything of value in Paragraph 6.
If Ithaca did have the political power to improve its tax situation in Albany, it would be better off advocating for a city income tax. Such a tax would be more progressive than its real property tax, which has a regressive impact upon homeowners and renters. Both New York City and Yonkers have special provisions in state law authorizing those cities to collect a city income tax on top of the state and federal income taxes.
Because major employers such as Cayuga Medical, Ithaca College, much of Cornell, and Borg Warner are physically located outside of the city limits, a city income tax would capture revenues from economic activity that would never be reached by real property taxes alone.
Of course, because left-wing activists want to inflame the voters instead of advancing good public policy, they find Cornell a much more convenient target than the income stream of Ithaca voters.
Targeted Donations Better Serve The Cornell Community
Cornell currently spends an estimated $19 to 23 million annually to provide services that would otherwise have to be provided by local government, including police, streets and drinking water. The voluntary payment, which traces back to 1995, has largely been to subsidize fire protection services.
By giving an unrestricted voluntary payment, Cornell gives up any say in how its funds are to be spent by Ithaca. The money is used to subsidize the real property tax burden of other Ithaca residents instead of a net increase in the services that Ithaca provides.
The University of Pennsylvania halted unrestricted voluntary payments in 2000, and it is time for Cornell to follow that example.
Due to mismanagement and a dysfunctional Common Council, Ithaca is becoming unlivable in many essential respects. First, Ithaca’s fire and emergency medical services (EMS) is unable to retain the level of professional staffing needed to respond to emergencies effectively. Ithaca recognizes the need to build a new East Hill Fire Station on a less congested street than College Avenue.
Next, the Ithaca Police Department has been unable to retain leadership or necessary staffing levels. As a result, there are unprecedented shooting and stabbing incidents. If Ithaca gains a reputation as an unsafe city, Cornell and Ithaca College will have trouble recruiting the best students and faculty as well as general tourism will decline.
Finally, the Cornell campus is surrounded by pothole ridden streets that desperately need repaving. Stewart Avenue still has bricks instead of asphalt, and the Stewart Avenue bridge needs to be rebuilt. All of that is an Ithaca responsibility to maintain properly. Ithaca also lacks proper staff for snow removal.
So, if the Common Council foolishly votes to reject the agreement, Cornell should take any further unrestricted voluntary payment off the table and instead meet with Ithaca to negotiate a series of restricted voluntary donations to address the pressing needs of the Cornell community. That list could be:
- A professionally staffed fire and EMS coverage for the campus.
- Restaffing the Ithaca Police Department to historic levels, including regular patrols of Collegetown, the Ithaca Commons, and the Elmira Road retail areas.
- Targeted road and bridge improvement projects to provide safe travels on the streets proximate to the campus.
- Increased funding of public works activities such as snow removal.
If Ithaca can’t agree to such a designated voluntary payment approach, then Cornell should use the $4 million in funds to invest in establishing its own professional fire and EMS department. The advantage of Cornell controlling a separate department would be focused training in handling fires that could arise in Cornell’s specialized laboratory and technical facilities. Once established, the new Cornell Fire Department could negotiate mutual assistance pacts with the surrounding jurisdictions.
In conclusion, the left-wing Common Council members and their activist supporters have lost sight of the voluntary nature of Cornell’s payments and the generosity behind the agreement. If the Common Council votes down the agreement, Cornell should not validate such misbehavior with further concessions, but rather move to a negotiation of targeted donations that better meet the needs of the Cornell community.
