HomeMy WebLinkAboutMN-CLC-2019-04-15
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Community Life Commission
April 15, 2019
2
is 6-7 years old. He stated there are many ways to slice/dice numbers, data, etc.,
compare contributions, but reviving /refreshing this report but hoping CLC can bring in a
human element as well. It has been frustrating trying to work with last three CU
presidential administrations considering how they are largest employer/wealthiest
corporation/powerful political entity in City, for them to actually realize their own
strength, when so few people who in are in positions to make decisions about this
number at CU live in the city or participate in the life city. For instance, from the Board
of Trustees, and particularly their Finance Committee, to the senior ranks in the
administration, most of whom live in Cayuga Heights or other outlying area, and rarely
find themselves traveling through the city. The Mayor stated he often struggles with
making this case and the CLC, being more than one person, could put a face in the
human struggle, a human opportunity to get a larger contribution. Hearing folks on
campaign trail, that folks feel left out, if there is a way to capture
stories/interviews/surveys/ forums, to paint an alternative.
With more people choosing to accept positions and go to school at CU; Cornell depends
on us and we depend on them.
Dan Cogan: His office is planning on putting together an overview of the budget to all
commissions – pulling up last year’s budget, 40% of revenue comes property tax from
25% from sales tax, and then 21% fees, etc., property taxes are the largest chunk of
revenue. Total assessed value Cornell value of all city of Ithaca property is to all of the
taxable property in Ithaca = this would be an approximately $25 million extra to city if
they paid taxes, just a sense of scale.
Dan advised that he was not involved in all of these conversations, but has spoken with
them recently; they insist we are not making apples to apples comparison – difficult to
do this comparison, as every municipality has differences. If CLC were to do any work
on this topic to nail these issues down, it would be good to try to come up with
something that is more defensible and not so easy to put holes into might help
conversation advance. Dan has had a lot of communications with the CU Community
Relations and if this conversation continues, they would welcome to come to talk and to
give their point of view at future meeting, that way all sides are heard and taking
everything into consideration.
Ithaca NY is one of the top most tax exempt cities in NYS, Tompkins County one of the
most highly tax exempt county in NYS – this effects Ithaca more than other cities in
NYS, and CU would say they provide more economic benefit to Ithaca then other city
and that is difficult to capture/quantify. They also bring a lot more demand for services
– what does CU bring to Ithaca - demand for services and the impact on our
infrastructure? Which is hard to look into …industry is educational not industrial.
Currently, CU pays $1 million a year per the MOU and the budget built around this and
if no $ then money would come from tax payers. CU has said they don’t want to just
write a check, to give money for nothing, or no strings attached, CU interested in
project-based contributions, or infrastructure project that CU interested in.
Martha Robertson, Chair of County Legislature, who took issue with the documents
from 7 years ago – she reminded us that CU recently offered to give some money
Community Life Commission
April 15, 2019
3
toward Stewart Ave repaving – it is the gateway to their University, we have a lot of
roads that need attention/repair, when doing road work there is a lot involved and costly.
They are interested in giving money for particular projects, basically money with strings;
$7 million cost to city to repave a street, including work required for sidewalks/utilities,
etc. CU does take care of its own sidewalks, own roads, have their own police, but still
rely on City Police, SWAT Team, have their own water and their own zip code.
There was recalibration of storm water so those organizations with large systems that
feeds into City, will be paying more for that service. Good example of a way of more
equitably sharing of costs the City bears. Are there other items? We give them an
opportunity for them to contribute? CU provides some items for itself, there was
question and discussion of the storm water feed from CU that feeds into city sewer
systems as well as other such things that effect City. Sidewalks are another that we
could have made into districts and put a fee on those and decided not to. The Mayor
open to more fees – Questions regarding does fees/services they take -- does it match
up? It is something that really is no way to calculate … His hypothesis that CU is in no
way coming close. Fire services tries to come close in the MOU – even those costs
don’t match up, there are 55 employees in fire services this $ does not come close to
cover the overhead in city.
Ideas like tracking who is moving through city – corporations/organizations each
having/imputing a fee … tolls logistics, political and legal just cannot be done.
Commission to involve community to persuade the university pay more – find
commonality (housing issues). Tax cap state passed – if city under, you got rebate
check; if similar program capped taxes by CU – raises full tax levy.
Byrne wrote a letter to President– based on inflation rate which is pretty stagnant now –
population of CU has grown dramatically over past 10-12 years – last year CU states
they will be growing, CU brings in more money, increased student population, increased
use of roads, 15,000 people driving into county every day, it impacts everything, roads,
police, building, planning, etc.
Lewis: - Explaining student population - student bringing in money – students that
receive financial aid – significant portion receive grant aid, CU one of three underwriters
for TCAT is that represented in these payments? Mayor: No. This may present a fuller
picture; Lewis on TCAT Board and worked at CU for years; TCAT gets paid by
state/federal government for every rider
CU contributes towards housing fund $200,000, $100,000 from City and $100,000 from
County through 2021, transportation fund gone, $10 million agreement never followed
through. Raising tax levy - CU gives more money, City not raise taxes for certain time
period – good idea. Fleming will send out document she found to members;
How have other municipalities handled this/achieved higher payments in other areas?
How have they approached it? Research this area – Every time we say renegotiate,
Cornell says no to renegotiating period. Dan stated call other institutes or the
municipalities to see how they arrived at the amount what was rational?
Community Life Commission
April 15, 2019
4
Renewable energy CU commonality w/City - CU currently putting millions into Geo
thermal they will have more energy than they could use/need - City look into this. When
the last research was done, was this funded, the Mayor and two interns worked on this
a little over a month working on this calling and getting info to get data, this was not
funded. Would there be staff time, interns this summer, Mayor says yes he could
arrange for interns for assistance to help with research and Mayor thinks that could be
arranged. He also stated that Tom from the Economic Development Office could help
do some footwork as well.
IC contributions – one of the projects that the City approved was the extensions of
Southill sidewalks which benefit all residents but also IC, what are their contributions to
the local community? Smaller portions than CU, they do they contribute small amount to
TCAT double amount of busses running at night, very strategic investments.
Dan said it would be interesting to look at the correlation of contributions from different
institutions. The Chair thanked the Mayor and Dan for coming to speak and
background. If CLC has questions email the Mayor he could come back and talk again.
Healthy to have separate checks and balances, he won’t be meddling in affairs and trust
that we will do the research and any questions should be directed to him.
Members gave thanks to Carolyn for her all of her work/research into this as well.
Email questions to Chair – thinking to all the info received and tonight’s
conversation/info as well. The three points that Mayor gave and how can CLC help,
what stick can Ithaca wield presently to make CU listen/come to table? What will get
them back to the table? Need to seek common ground, find ways we articulate common
ground and mutual benefit they can understand. Think about documents that have just
come and tonight’s discussion, email Chair with questions to use as a basis at next
month’s meeting instead brainstorming now. Get actual stories, compelling reasons,
adding to some practical data will be useful.
More info to Scriber regarding common ground of driving into area to work because they
cannot afford to live here; tolls/taxing people that are employing/driving into area? Send
email to Chair before next meeting, any ideas/suggestions and then CLC will decide
how to proceed.
Half-Staff Flag Policy: Hall excused from meeting, she emailed her work; County has
drafted their policy and Henry from TC was in attendance; Chair stated that proposal
starts at #3 and the beginning section is information and how Hall got info but shouldn’t’
be in the actual policy.
Questions: What is the difference between the county’s policy/this policy? Henry (quest
in audience) stated that advocacy flags flown from a list, but they have to ask.
Half-staff policy basically follows state mandate, employees, locally known members
Should county and city coordinate policies? If County has one and City has one, we
each follow our policies and they have been shared and should be consistent. If County
changes policy does City need to change to follow suit? Procedure for proposed
changes, recommendation for Half Staff Policy – proposal to City Administration for their
Community Life Commission
April 15, 2019
5
approval with appropriate edits and completion: Bakhle made motion and Byrne 2nd – all
in favor – Chair to do edits/finalize info to make it a bit clearer, chair to send policy to
City Administration. CLC already voted on advocacy flag previously.
Keeler gave updates on projects: Shopping Cart Ban, he met with Ducson Nguyen
and gave lowdown of his prospective and he would like to come here to a meeting to
talk to CLC. Currently working with some of the local stores and they have been
discussing this and the imposition of fees, what’s in legislation already, etc. Having a
discussion regarding supporting community members who need carts? Have
conversations regarding all logistics, police fines, etc., how CLC can help? Suggestion
is to have Ducson come to future meeting and see what can CLC can do to help this
process. Public Arts Sub-Committee – trying to build this subcommittee up and open
to suggestions from CLC of who would be good for this RE: funding/research, etc., if
any members have suggestion or a good fit, contact Keeler.
Lewis updated that Common Council approved the art murals and the next round of
mural applications due by May 15th, and will discus at June meeting; report to
subcommittee and suggestion of inviting Alex to June meeting; discussion of need for
advisors/experts for subcommittee.
May Meeting – Possible presentation of the new full time position for City of Ithaca ADA
Coordinator;
Update that the City Planning Department is currently short-staffed and asked that folks
be patient with them. Scriber met with Annisa ; get someone at CU to get someone to
help research/talk with FLIC and work together, Chair appointed Commission Advisor –
Joy Das – who works at CU and will be coming to meetings as current Commissioner
McClinsey to scheduled to graduate and therefore will be leaving CLC. Let Thomas
Schelly know about plastic ban in the future, as state just made decision.
7:42 Adjourned
Next Meeting:
Monday, June 17, 2019, 6:00 p.m., Common Council Chambers, 3rd Floor
Adjournment:
On a motion, the meeting was adjourned at 7:42 p.m.
Respectfully Submitted by,
Jody Hallett-Harris, Executive Assistant
1
Request to Cornell University:
Cornell’s Commitment to the Community
Cornell University makes a number of valuable contributions to the community, from employing
thousands of local residents, to attracting extremely intelligent and talented individuals to teach
and study here, to purchasing goods and services from area businesses. However, the University
provides less financial support to its host municipalities— both the City and Town of Ithaca —
than its peer institutions provide to their own.
Today, the City of Ithaca, the Town of Ithaca, and Tompkins County have come together to ask,
once again, that Cornell agree to an increased annual contribution. We request an initial total
contribution from the University of $6,455,725—an amount equal to what the University would
owe in property taxes if it paid on only 7.5 percent of its total assessed value.1 We further request
that this not be a one time contribution, but rather a formal and long-term arrangement in which
Cornell makes voluntary payments of equivalent value to the municipalities every year.
Background
Like most colleges and universities, Cornell is designated as a charitable nonprofit organization
(despite having a $5 billion endowment 2 and a $3 billion operating budget 3), and is thus tax-
exempt under section 501(c)(3) of the Internal Revenue Code. The reasoning behind this
exemption is that, to the extent that colleges and universities are “organized and operated
exclusively for…educational purposes,” they provide a public good, without gaining any private
benefit in return, and should therefore receive a tax break.4 While this exemption is well-
intentioned, it has a very significant impact on local governments.
The loss in property tax revenue, in particular, can be devastating for the other taxpayers of any
municipality that is host to a substantial nonprofit sector. In the City of Ithaca, for example, 60
percent of all property is tax-exempt, and nearly 85 percent of that belongs to Cornell.5 For fiscal
year 2012 the City forewent $25.5 million—nearly half of its entire budget—in property tax
revenue that it would have otherwise received from the University if it were not exempt.6 In
order to make up for some of this lost revenue, the other taxpayers of the City have had to
consistently absorb the difference, through higher taxes and lost services. The result is long-term
upward pressure on the area’s cost of living and cost of doing business.
Ithaca is not unique: college towns and cities across the nation are faced with similar issues. The
difference, however, is that an increasing number of nonprofit organizations are now taking on
some of the financial burden caused by their tax exemption by making alternative voluntary
payments to their respective local governments. Universities such as Yale, Brown, and Harvard,
for example, have entered into Payment in Lieu of Taxes (PILOT) programs, agreeing to make
substantial annual investments in their host municipalities. Unfortunately Cornell has not
2
followed suit, and area residents—including Cornell students, faculty, and staff—have essentially
been forced to pay for the University’s exemption through higher taxes.
Although Cornell relies on significant services provided by all three of its host municipalities, it
only makes annual financial contributions to the City of Ithaca. A Memorandum of
Understanding (written in 1995 and amended in 2003) between Cornell and the City established
a schedule of voluntary payments to be made by the University every year. Although the actual
amount of each payment is determined by the previous year’s CPI, it has remained at
approximately $1.2 million annually. For 2012, Cornell contributed a total of $1,225,789 to the
City— with $735,473 (60 percent) designated for fire protection and the remaining $490,314 (40
percent) designated for “other municipal services”. 7
Cornell’s PILOT compared to other prestigious institutions
The comparisons below serve to show how Cornell’s annual payments to the City of Ithaca
compare to the formal PILOT programs of seven other universities: Princeton, Yale, Boston
University, Harvard, Massachusetts Institute of Technology, Brown, and Penn State. These seven
were chosen because they are all peer universities of Cornell and all have formal PILOT
agreements with their respective host cities.
Part I compares the voluntary payments made by each university to its host municipality in 2012.
Harvard has PILOT agreements with the City of Cambridge and with the City of Boston, which
are listed separately in the comparison. Part I also provides a brief explanation of the
arrangements between each of the universities and their municipalities.
Part II then compares these voluntary payments as relative amounts based on: university
endowment, municipality population, university enrollment (total and undergraduate), and
university operating revenues and expenses. Cornell’s ranking among the universities is also
shown for each comparison, with a higher ranking indicating a smaller voluntary payment.
3
PART I
Voluntary Payments to Host Municipalities
Note: Harvard-B = Harvard’s voluntary payment to Boston; Harvard-C = Harvard’s voluntary payment to Cambridge
Harvard University
Harvard has PILOT programs with both Cambridge and Boston, which total to an annual
amount of $5 million.
Cambridge
Harvard is one of the top five taxpayers in Cambridge8 and, on top of that, also makes
substantial voluntary payments to the City every year. In 2005 Harvard renewed its PILOT
agreement with Cambridge for a 50-year period. The terms of the agreement include a 3
percent annual payment escalation, in addition to a $100,000 payment escalation every 10
years. The University will pay the City an estimated $2,874,000 for fiscal year 2012-2013.9
4
Boston
In 2009 Boston Mayor Thomas Menino established a task force charged with developing
recommendations for a more successful and more consistent PILOT program to improve
relationships between the City and its tax-exempt institutions. As a result, PILOT payment
amounts in Boston are now determined by a standard formula, based on organizations’ property
values and whether or not they can prove that they provide substantial community services.10
Boston’s PILOT request to Harvard for fiscal year 2012 was $2,121,894.11
Massachusetts Institute of Technology
Massachusetts Institute of Technology (MIT) also has a formal PILOT arrangement with
Cambridge,12 and is the City’s largest taxpayer as well. Although it had been making voluntary
payments for many years, the University did not enter into a written agreement with Cambridge
until 2005. The agreement has a 40-year term and includes an annual 2.5 percent payment
escalation. MIT will pay an estimated $1,832,000 for fiscal year 2012-2013.13
Princeton University
Princeton University makes annual voluntary payments to both the Borough of Princeton and
the Princeton Township (which are currently consolidating into a single municipality). The
University paid the Borough and Township a combined $1,680,49614 in 2011 and nearly
$2,500,000 in 2012.15
On top of its PILOT, in 2011 Princeton also paid $7.7 million in property taxes, one third of which
(nearly $2.6 million) was legally exempt.16 While New Jersey state law stipulates that any
portion of a facility that is used for educational purposes is qualified for tax-exemption, the
University only removes a property from the tax roll if 100 percent of the facility is used for
education.17
Yale University
Yale University makes the largest voluntary payment to its host municipality among all colleges
and universities in the nation.18 Furthermore, the University is one of the top five taxpayers in
New Haven and makes other substantial financial investments in the community, such as a $25
million Homebuyer Program.19
In 1991 Yale and the City of New Haven reached a PILOT agreement that had an original base
payment of $1.2 million. In 2009 the University then agreed to increase its payments by 50
percent. By 2010, Princeton’s annual contribution to the City reached $7.5 million,20 growing to
nearly $8.1 million in 2012.21
Pennsylvania State University
Penn State is a public land grant institution. They give about 1.5 million to their host county,
local school districts, and municipalities. Their PILOT agreement is tied to CPI.
Boston University
In 2009 Boston Mayor Thomas Menino established a task force charged with developing
recommendations for a more successful and more consistent PILOT program to improve
relationships between the City and its tax-exempt institutions. As a result, PILOT payment
amounts in Boston are now determined by a standard formula, based on organizations’ property
values and whether or not they can prove that they provide substantial community services.22
The City’s PILOT request to Boston University for fiscal year 2012 was $5,329,936.23
Brown University
Brown University recently signed a Memorandum of Agreement (MOA) with Providence, in
which it committed to invest $31.5 million into the City over the next eleven years.24 As
5
stipulated by the agreement, Brown will pay $3.9 million annually for six years followed by $2
million annually for five years.25
This MOA does not override a 2003 Memorandum of Understanding (MOU) in which the
University agreed to make voluntary payments of an average $1.2 million annually.26 On top of
that, Brown pays taxes on all educational properties that have been purchased since 2003.
Thus, in 2012 the University’s voluntary payments to Providence totaled $6,374,000:
$3,900,000 (2012 MOA) + $1,200,000 (2003 MOU) + $1,274,000 (voluntary payments on
educational property purchased since 2003).27
Cornell University
Although Cornell University is not in a formal PILOT arrangement, it has been making voluntary
payments to the City of Ithaca for many years. A Memorandum of Understanding (MOU)
between the City and the University contains a schedule of these payments (shown below) and
stipulates that, each year, 60 percent of the funds are to be allocated for fire protection and the
remaining 40 percent for “other municipal services”.28
Under the original MOU, written in 1995, voluntary payments increased by $50,000 annually
(except for a $100,000 increase between 1999 and 2000). Thus, Cornell’s contribution grew
from $250,000 in 1995 to $700,000 in 2003.29 The MOU was then amended in 2003 to increase
the amount of the annual payments and to extend the agreement (which was due to expire in
2007) another 16 years.30 Cornell’s contribution has since been determined by the previous
year’s CPI, however each year they have remained at roughly $1,200,000. In 2012, the
University made a total voluntary payment to the City of $1,217,475, with $730,485 allocated for
fire protection.31
A summary of Cornell’s contribution under the MOU is as follows:
AllocationAllocationAllocation
Year Contribution % Change Fire Protection Other Municipal Economic
2012 $1,217,475 2.50%$730,485 $486,990
2011 $1,187,780 1.60%$712,668 $475,112
2010 $1,169,075 -4.00%$701,445 $467,630
2009 $1,173,770 3.80%$704,262 $469,508
2008 $1,130,800 2.80%$678,480 $452,320
2007 $1,100,000 -4.35%$660,000 $440,000
2006 $1,150,000 -4.17%$575,000 $500,000 $75,000
2005 $1,200,000 -4.00%$550,000 $500,000 $150,000
2004 $1,250,000 78.57%$475,000 $525,000 $250,000
2003 $700,000 7.69%$450,000 $250,000
2002 $650,000 8.33%$425,000 $225,000
2001 $600,000 9.09%$400,000 $200,000
2000 $550,000 22.22%$375,000 $175,000
1999 $450,000 12.50%$325,000 $125,000
1998 $400,000 14.29%$300,000 $100,000
1997 $350,000 16.67%$275,000 $75,000
1996 $300,000 20.00%$250,000 $50,000
1995 $250,000 -$225,000 $25,000
Source: City of Ithaca 2012 Mayor’s Budget Narrative, Page 43
6
PART II
Voluntary Payment as a Percentage of University Endowment
All University endowments in this comparison were found in a 2012 report published by the
National Association of College and University Business Officers (NACUBO) and Communfund
Institute.32 The amounts used represent the market value of endowments for fiscal year 2011.
Voluntary Payment as %
University Municipality Endowment Payment of Endowment
MIT Cambridge $9,712,628,000 $1,832,000 0.0243%
Brown Providence $2,496,926,000 $6,374,000 0.2553%
Princeton Princeton $17,109,508,000 $2,500,000 0.0146%
Harvard Cambridge $31,728,080,000 $2,874,000 0.0091%
Boston $2,121,894 0.0067%
Penn State State College $1,953,300,000 $1,500,000 0.0768%
Yale New Haven $19,374,000,000 $8,100,000 0.0418%
Boston U.Boston $1,159,583,000 $5,329,936 0.4596%
Average 0.1110%
Cornell Ithaca $5,059,406,000 $1,217,475 0.0241%
Cornell’s Rank: 6th out of 9
7
Voluntary Payment as Dollar Amount per Municipality Resident
All but two of the municipality populations were found on a United States’ Census Bureau
webpage and are current as of 2010.33 The 2010 population for the Town of Ithaca was found in
a town profile published by Tompkins County Youth Services 34 and the 2010 population for
Princeton Township was found on a New Jersey State document regarding legislative districts.35
The final population listed for Princeton is a summation of the Borough (12,307) and Township
(16,265) populations; and the final population listed for Ithaca is a summation of the Town
(19,930) and City (30,014) populations.
Municipality Voluntary Payment as $ Per
University Municipality Population Payment Municipality Resident
MIT Cambridge 105,162 $1,832,000 $35.36
Brown Providence 178,042 $6,374,000 $35.80
Princeton Princeton 28,572 $2,500,000 $163.11
Harvard Cambridge 105,162 $2,874,000 $26.15
Boston 617,594 $2,121,894 $3.43
Penn State State College $42,499 $1,500,000 $35.29
Yale New Haven 129,779 $8,100,000 $61.26
Boston U.Boston 617,594 $5,329,936 $8.39
Average $46.10
Cornell Ithaca 49,944 $1,217,475 $24.38
Cornell’s Rank: 6th out of 9
8
Voluntary Payment as Dollar Amount per University Student
University enrollments—total and undergrad—were found through a search engine produced by
the National Center for Education Statistics.36 All information is based on Fall 2011 enrollment
statistics.
University Voluntary
Payment as $
Per
University Municipality EnrollmentEnrollment Payment
University
Student
MIT Cambridge 10,89410,894 $1,832,000 $168.17
Brown Providence 8,7688,768 $6,374,000 $726.96
Princeton Princeton 7,8137,813 $2,500,000 $319.98
Harvard Cambridge 27,39227,392 $2,874,000 $104.92
Boston $2,121,894 $77.46
Penn State State College 38,95438,954 $1,500,000 $38.51
Yale New Haven 11,87511,875 $8,100,000 $682.11
Boston U.Boston 32,43932,439 $5,329,936 $164.31
Average $285.30
Cornell Ithaca 21,13121,131 $1,217,475 $57.62
Cornell’s Rank: 8th out of 9
9
Voluntary Payment as Dollar Amount per Undergrad Student
University enrollments—total and undergrad—were found through a search engine produced by
the National Center for Education Statistics.37 All information is based on Fall 2011 enrollment
statistics.
Undergrad Voluntary Payment as $ Per
University Municipality Enrollment Payment Undergrad Student
MIT Cambridge 4,384 $1,832,000 $417.88
Brown Providence 6,380 $6,374,000 $999.06
Princeton Princeton 5,203 $2,500,000 $480.49
Harvard Cambridge 10,305 $2,874,000 $278.89
Boston $2,121,894 $205.91
Penn State State College 38,954 $1,500,000 $38.51
Yale New Haven 5,349 $8,100,000 $1,514.30
Boston U.Boston 18,140 $5,329,936 $293.82
Average $528.61
Cornell Ithaca 14,167 $1,217,475 $85.94
Cornell’s Rank: 8th out of 9
10
Voluntary Payment as a Percentage of University Operating Revenues
The operating revenues and operating expenses for every University were found in their
respective financial statements/reports. The amounts listed are for the year ended June 30,
11
2011. For Cornell, we included revenues and expenses for the University’s conglomerate budget
and for its Ithaca Campus budget.
Cornell—Ithaca Campus Rank: 8th out of 10
Cornell—Conglomerate Rank: 9th out of 10
Univ. Operating Voluntary Payment as % of
University Municipality Revenues Payment Oper. Revenues
MIT Cambridge $2,750,647,000 $1,832,000 0.0666%
Brown Providence $666,510,000 $6,374,000 0.9563%
Princeton Princeton $1,426,407,000 $2,500,000 0.1753%
Harvard Cambridge $3,777,746,000 $2,874,000 0.0761%
Boston $2,121,894 0.0562%
Penn State State College $4,264,764,000 $1,500,000 0.0352%
Yale New Haven $2,734,218,000 $8,100,000 0.2962%
Boston U.Boston $1,654,314,000 $5,329,936 0.3222%
Average 0.2480%
CU Conglomerate $3,239,008,000 0.0376%
CU Ithaca Campus Ithaca $2,021,983,000 $1,217,475 0.0602%
12
Voluntary Payment as a Percentage of University Operating Expenses
The operating revenues and operating expenses for every University were found in their
respective financial statements/reports. The amounts listed are for the year ended June 30,
2011. For Cornell, we included revenues and expenses for the University’s conglomerate budget
and for its Ithaca Campus budget.
Univ. Operating Payment as % of
University Municipality Expenses Voluntary Payment Oper. Expenses
MIT Cambridge $2,571,147,000 $1,832,000 0.0713%
Brown Providence $662,508,000 $6,374,000 0.9621%
Princeton Princeton $1,426,407,000 $2,500,000 0.1753%
Harvard Cambridge $3,907,568,000 $2,874,000 0.0735%
Boston $2,121,894 0.0543%
Penn State State College $4,264,764,000 $1,500,000 0.0352%
Yale New Haven $2,624,550,000 $8,100,000 0.3086%
Boston U.Boston $1,551,750,000 $5,329,936 0.3435%
Average 0.2530%
CU Conglomerate $3,007,129,000 0.0405%
CU Ithaca Campus Ithaca $1,822,103,000 $1,217,475 0.0668%
Cornell—Ithaca Campus Rank: 8thth out of 10
13
Cornell—Conglomerate Rank: 9th out of 10
Why an Increased Contribution is Vital to the Community and to the
University
Agreeing to this proposal would make Cornell a national leader in strengthening town-gown
relations, and would bring in a new era of more positive and mutually beneficial collaboration
between the University and its host municipalities. Furthermore, the University would enjoy the
continued provision of vital services by the local governments, as well as the addition of new
services and greater cooperative arrangements.
In 2003, when Cornell President Jeffrey Lehman proposed to amend the original
MOU between the University and the City of Ithaca, he stated: “A strong
university and a strong community go hand in hand….We need to recognize the
importance of our town-gown partnership. We need to celebrate it. And we
need to strengthen it, especially in an era of budget constraints.”38
Unfortunately, not much has improved in the way of this town-gown
partnership and, nearly ten years later, Cornell is still not carrying its full
weight. For fiscal year 2012 the University would have owed over $86 million to
surrounding municipalities if it were taxed on its total assessed property value.
Instead, it only paid the mere $1.16 million that was legally taxable and left an
$85 million tax revenue shortage, the burden of which was ultimately shifted
onto local residents.39
Cornell acknowledges that it has a direct stake in the condition of local
infrastructure. On October 6, 2007, during his address at the annual
community leaders brunch, President Skorton announced that the University
would be investing $20 million over ten years in support of community housing
and transportation initiatives. On top of the direct investment, Skorton pledged
that Cornell would partner with the local governments to get additional state
resources for these initiatives as well.40
The intent of this promise wasn’t simply to aid the local community, but to
benefit the University as well. As Stephen Golding, Cornell's Samuel W. Bodman
Executive Vice President for Finance and Administration, explained: “our
relationship with the area’s local communities is essential to promoting their
economic strength, quality of life and cultural vitality, which, in turn, are critical
to Cornell’s ability to recruit its next generation of faculty, staff and students”.41
Cornell is fully aware of the ways in which a strong community—with quality public schools,
affordable housing, and adequate infrastructure—directly contributes to its own success.
Moreover, the University knows that a sustainable local economy, which maintains a low cost of
14
living, is also of great importance. Salaries, wages, and benefits make up nearly 60 percent of
Cornell’s operating expenditures.42 Between 2009-10 and 2010-11 faculty salaries increased by
an average 2.8 percent largely because, according to Vice President of Human Resources Mary
Opperman, it is progressively expensive to live in the area: “[professors’] costs of living are
going up…and we have to try to balance that with salary increases”.43
Insert information about salaries for associate and full professors compared with peer
institutions. Cornell's compensation is comparable for assistant professors – in the recruitment
phase – but low for faculty with longer residence here. It is clear that the local quality of life
represents meaningful value, which enables Cornell to retain top faculty without directly
compensating them at a level commensurate with its peer institutions.
Maintaining a high quality of life requires significant expenses. It is has become increasingly
difficult for the local governments to afford the services they provide—those which ensure that
Ithaca and Tompkins County are communities in which a top-tier research institution can thrive
—without subsequently placing a greater financial burden on their residents. It is neither fair nor
strategic of Cornell to starve its host municipalities of needed funds any longer. If the University
is concerned—as it should be—with preserving the area’s quality of life and keeping living
expenses down, and if the University truly believes in doing the right thing, it will accept this
proposal.
Services That Local Governments Currently Provide to Cornell
In addition to ensuring an excellent quality of life in Ithaca, local governments
deliver direct services to Cornell, such as road and trail maintenance, fire
protection, and law enforcement. While local residents pay for these services
through their taxes, the University receives them, essentially, for free.
Local governments are struggling to maintain the quality of life that its
residents and the Cornell community have come to expect. For too long the
University has failed to support its host municipalities and to pay its fair share.
Unless Cornell makes a greater local investment, the City, the Town, and the
County will be forced to cut vital services.
Since Cornell makes up such a significant portion of the total property in the
City and Town, when budget decisions are made and services are reduced or
eliminated, Cornell will suffer along with the rest of the City and Town. This
may mean slower response times to University requests, less maintenance of
trails and sidewalks that surround the campus, or even an eradication of the
SWAT team. The Ithaca community can no longer carry the financial burden of
providing these services to Cornell without gaining anything in return.
15
The decision to cut local services would be an extremely painful one for the
municipalities to make. Hard working citizens would be laid off, relations
between Cornell and Ithaca would be strained, and the quality of life for
everyone would be in jeopardy. However, without a substantial increase in
financial support from the University, these cuts are imminent.
Moving Forward
The acceptance of this proposal and the ensuing start of a new partnership would greatly benefit
local residents, the local governments, and Cornell. With the continuation of existing services
and additional cooperative agreements, the University could save millions of dollars and
countless staff hours. On the contrary, the rejection of this proposal would put serious strain on
town-gown relations and force the discontinuation of many services currently enjoyed by local
residents and the Cornell community.
It is time for an increased contribution from Cornell, and for a new era of cooperation to begin.
Other prestigious universities have reached agreements with their host municipalities, from
which they have benefited greatly and received widespread positive publicity. This outcome is
far more desirable than strained relations and a large public media battle. The City, the Town, and
the County hope Cornell will seriously consider this proposal and work in good faith towards an
arrangement that will foster mutual appreciation and strong relationships for years to come.
1
Tompkins County. Department of Assessment. Cornell and Ithaca College – Assessment
Data, March 2012. Excel file.
2
Educational Endowments and the Financial Crisis: Social Costs and Systemic Risks in the
Shadow Banking System. Boston: Center for Social Philanthropy and Tellus Institute, 2010. PDF
file.
3
2012-2013 Operating & Capital Budget Plan. Division of Planning & Budget, Cornell
University, 2012. PDF file.
4
Association of American Universities. “Tax Exemption for Universities and Colleges;
Internal Revenue Code Section 501(c)(3) and Section 115.” PDF file.
5 “2013 City of Ithaca Budget Outlook.” Official Website of Ithaca, NY. Web. <http://www.ci.ithaca.ny.us/
city-budget.cfm>.
6
Tompkins County. Department of Assessment. Cornell and Ithaca College – Assessment
Data, March 2012. Excel file.
7
City of Ithaca. 2012 Mayor’s Budget Narrative. 2011. PDF file.
8 Educational Endowments and the Financial Crisis: Social Costs and Systemic Risks in the Shadow
Banking System. Boston: Center for Social Philanthropy and Tellus Institute, 2010. PDF file.
9 City of Cambridge. Budget Department. Annual Budget 2012-2013. 2012. PDF file.
10 City of Boston. Mayor’s PILOT Task Force: Final Report & Recommendations. 2010. PDF file.
11 City of Boston. Assessing Department. PILOT Requests for FY 2012. Updated 2012. PDF file.
12 Educational Endowments and the Financial Crisis: Social Costs and Systemic Risks in the Shadow
Banking System. Boston: Center for Social Philanthropy and Tellus Institute, 2010. PDF file.
13 City of Cambridge. Budget Department. Annual Budget 2012-2013. 2012. PDF file
14 Kenyon, Daphne E., and Adam H. Langley. “Payments in Lieu of Taxes: Balancing Municipal and
Nonprofit Interests.” Princeton Township. Web. <http://www.princetontwp.org/PILOT.pdf>.
15 Russ, Hilary. “Analysis: U.S. cities wrestle with universities for cash.” Reuters. Thomas Reuters, 18 May
2012. Web. <http://www.reuters.com>.
16 Russ, Hilary. “Analysis: U.S. cities wrestle with universities for cash.” Reuters. Thomas Reuters, 18 May
2012. Web. <http://www.reuters.com>.
17 Education and Innovation, Enterprise and Engagement: The Impact of Princeton University. Office of
Communications, Princeton University, 2008. PDF file.
18 Kenyon, Daphne A., and Adam H. Langley. Payments in Lieu of Taxes: Balancing Municipal and
Nonprofit Interests.” Cambridge: Lincoln Institute of Land Policy, 2010. PDF file.
19 “Economic Growth & Fiscal Impact.” Yale University. Office of New Haven & State Affairs. Web. <http://
onhsa.yale.edu/economic-growth-and-fiscal-impact>.
20 Kenyon, Daphne A., and Adam H. Langley. Payments in Lieu of Taxes: Balancing Municipal and
Nonprofit Interests.” Cambridge: Lincoln Institute of Land Policy, 2010. PDF file.
21 Kiley, Kevin. “A Fair Fare Affair.” Inside Higher Ed 10 Feb. 2012. Web. <http://
www.insidehighered.com>.
22 City of Boston. Mayor’s PILOT Task Force: Final Report & Recommendations. 2010. PDF file.
23 City of Boston. Assessing Department. PILOT Requests for FY 2012. Updated 2012. PDF file.
24 Memorandum of Agreement by and between the City of Providence and Brown University. 2012. PDF
file.
25 Fischer, Karin. “Brown U. to Pay Its Hometown $31.5-Million to Help Close Budget Gap.” Chronicle of
Higher Education. 1 May 2012. Web. <http://chronicle.com>.
26 Memorandum of Agreement by and between the City of Providence and Brown University. 2012. PDF
file.
27 “Brown & Providence: Taxes, Voluntary Payments & Fees.” Brown University. Web. <http://brown.edu/
web/providence/taxes.html>.
28 City of Ithaca. 2012 Mayor’s Budget Narrative. 2011. PDF file.
29 City of Ithaca. 2012 Mayor’s Budget Narrative. 2011. PDF file.
30 Grace-Kobas, Linda. Cornell President Jeffrey Lehman proposes a new agreement for contributions to
the City of Ithaca at his first Inauguration Day event. Cornell News. Cornell University, 16 Oct. 2003. Web.
<http://www.news.cornell.edu/releases/Oct03/inauguration.City.mou.lgk.html>.
31 City of Ithaca. 2012 Mayor’s Budget Narrative. 2011. PDF file.
32 U.S. and Canadian Institutions Listed by Fiscal Year 2011 Endowment Market Value
and percentage Change in Endowment Market Value from FY 2010 to FY 2011.
National Association of College and University Business Officers and Commonfund
Institute, 2012. PDF file.
33 “State & County QuickFacts.” United States’ Census Bureau. U.S. Census Bureau.
<http://quickfacts.census.gov/qfd/index.html>.
34 2010 Profile of Town of Ithaca (including the village of Cayuga Heights). Pub. Tompkins
County Youth Services, 2011. PDF file.
35 “Municipalities.” Division of Elections. New Jersey Department of State.
<http://www.njelections.org/2011-legislative-districts/towns-district.pdf#page=8>.
36 “Search for Schools, Colleges, and Libraries.” National Center for Education Statistics.
U.S. Department of Education. <http://nces.ed.gov/globallocator/>.
37 “Search for Schools, Colleges, and Libraries.” National Center for Education Statistics.
U.S. Department of Education. <http://nces.ed.gov/globallocator/>.
38 Grace-Kobas, Linda. Cornell President Jeffrey Lehman proposes a new agreement for contributions to the
city of Ithaca at his first Inauguration Day event. Cornell News. Cornell University, 16 Oct. 2003. Web. <http://
www.news.cornell.edu/releases/Oct03/inauguration.city.mou.lgk.html>.
39 Tompkins County. Department of Assessment. Cornell and Ithaca College – Assessment Data, March
2012. Excel file.
40 Skorton, David J. “Community Leaders Brunch.” Statler Hotel Ballroom. 7 Oct. 2007. Speeches and
Essays. Cornell University Office of the Provost. Web. <http://cornell.edu/president/speeches>.
41 Lowery, George. “Golding hails new era of town-gown cooperation with $20 million CU investment in
Ithaca, Tompkins County.” Chronicle Online. Cornell University, Division of University Communications, 10 Oct.
2007. Web <http://www.news.cornell.edu/>.
42
2012-2013 Operating & Capital Budget Plan. Division of Planning & Budget, Cornell
University. PDF file.
43
Camuti, Liz. “After Pause, Pay for Cornell Professors Rises.” The Cornell Daily Sun 18
Apr. 2011. PDF file.
Cornell University Ithaca Campus
Local economic snapshot - 2018
23,263 Students
9,870 Employees
$986 million Payroll
$221 million Student spending
$75 million Visitor spending
$178 million Purchasing in Tompkins County and adjacent counties
(by location of vendor).
$53 million Construction spending in Tompkins County and adjacent counties
(by location of prime contractor).
$7.93 million Local contributions to governments, Ithaca City School District, non-profit
organizations, and public transit support.
$3.6 million Property taxes generated (school taxes $2.3 million, municipal taxes $1.3
million). Taxes paid on Cornell-related properties rank third in Tompkins
County.
$3.5 million Municipal fees (water, sewer, storm water $2.5 million; other $1 million).
Cornell operates its own water system for most of the campus and serves
as a backup to municipal water systems.
$334 million External federal, state and corporate research funding spent locally.
40%/$750,000 Cornell United Way’s share of countywide campaign, and Cornell goal.
$22 million Venture capital raised in 2018 by the companies of Rev: Ithaca Startup
Works, founded by Cornell (with Ithaca College and Tompkins Cortland
Community College). Rev companies created 81 new local jobs in 2018.
$13.9 million Venture capital and investments raised by Cornell’s McGovern Family
Center for Venture Development’s Ithaca-based clients in 2018. These
companies have created 17 new local jobs in 2018.
NOTE: Numbers for students, employees, and payroll are for Cornell’s Ithaca Campus only.