ITHACA, NY – Earlier this week we examined property taxes in Ithaca at both the county and city level. One contentious issue that cropped up is the role that Cornell plays in Ithaca’s taxes. Today, we take a closer look at the University’s impact.
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If you’ve missed the first two parts of the series, you may want to start by reading those first.
In part II of the series, we spoke with Ithaca City Controller Steve Thayer, who mentioned Cornell’s tax exempt status as one of the major factors that impact Ithaca’s taxes.
According to Thayer, about 60 percent of Ithaca’s total assessed value is tied up in tax-exempt properties, and about 85 to 90 percent of that is Cornell.
“What that means is that the other payers of taxes have to pick up the burden. For 2016, we’re at about 60 percent tax exempt, which is very high, and that means the other 40 percent have to pick up that burden,” Thayer said.
However, that’s not the whole story.
There are some misconceptions about Cornell and property taxes that Tompkins County Director of Assessment Jay Franklin helped to clear up.
According to Franklin, despite it’s largely tax exempt status, Cornell is one of the top five payers of taxes in the county. Only actual educational facilities are tax exempt – other property that Cornell owns for future development or non-academic purposes is still taxable.
Franklin provided the following numbers:
- Cornell’s taxable property value: $8.18 million
- Cornell’s tax-exempt property value: $2.06 billion
According to Franklin, if all of Cornell’s property was fully taxable, the city’s tax rate would drop from $12.89 per $1,000 of assessed value to $5.84 per $1,000. That works out to an average savings of $1,250 for city taxpayers.
Granted, the numbers alone sound pretty damning, but they still do not paint the whole picture.
Franklin says that the actual value of Cornell is extremely difficult to appraise. He poses the question: “How much is Cornell’s land worth if Cornell isn’t there?” There are a lot of facilities that belong to Cornell that have almost no value without the University itself.
He pointed to the example of Cornell’s Synchotron facility. “It may have cost $200 million but it’s no good to John Doe. It’s hard to get a realistic value,” Franklin said.
There’s also a question of how much stress Cornell puts on the city’s infrastructure. With Cornell providing it’s own police force, for example, it could be argued that it puts less strain on the city’s uniformed officers than a development of similar value.
This doesn’t only apply to Cornell, either. If a development increases the city’s tax base (that is, the total value of properties in the city) without putting a substantial strain on existing city services, then the city could — theoretically — bring down it’s tax rate.
In other words, if the city gains more income sources without spending more, the tax burden is spread over more payers and the taxes can go down for everyone, by at least a small amount.
Aside from all that, it is also worth acknowledging the revenue — and the non-monetary value — that Cornell brings into the city that doesn’t come from tax dollars. As Ithaca Voice commenters have pointed out, Cornell is a major source of employment for the region. It is also a prestigious hub for academics and culture with a reputation that helps put Ithaca on the map in a way that other small cities are not.
Is Cornell doing enough?
Despite the mitigating factors pointed out by Franklin and our commenters, it is difficult to ignore the raw value of Cornell compared to the taxes it pays – even if it is one of the top five taxpayers in the county.
Ithaca Mayor Svante Myrick said that he believes that Cornell could be doing more. “Any way you slice it, every other top-tier university contributes more to their home town. They are failing as corporate citizens,” Myrick said.
Myrick continued: “I went to Cornell and I love the University so it pains me to say it, but if Yale were here the roads would be better paved. If Penn was our neighbor, Ithacans taxes would be lower. If Harvard or Princeton were in Ithaca, the cost of living here would be lower and the quality of life higher. All because the university has the means to contribute more but has decided that it is not their responsibility to do so.”
This is not a new stance for Myrick. A very thorough 2014 report in the Ithaca Times outlines Myrick’s attempts to illustrate how Cornell was not as generous as other schools with a similar profile when it came to contributing to their home cities. You can view the full study Myrick commissioned.
At the time of this writing, Cornell representatives were unavailable to comment. We’ll hear more from the University’s side in a future installment.
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