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The Town of Ithaca refers to the broader area of Ithaca, including the universities, city, suburbs and rural outskirts surrounding the City.

July 8, 2024

Under a Monumental Agreement, Cornell Pledges $425,000 Annual Contribution to Town of Ithaca

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After a Town Hall resolution was unanimously passed approving the first-ever voluntary payment agreement between the Town of Ithaca and Cornell on June 10, the University formally agreed to the contribution.

The agreement was signed on June 13, acknowledging that Cornell will provide $425,000 annually to the Town of Ithaca for the next 10 years beginning July 1.

The Town of Ithaca refers to the broader area of Ithaca, including the universities, city, suburbs and rural outskirts surrounding the City. About 40 percent of Cornell’s campus resides within the Town of Ithaca, according to a press release from Cornell media relations obtained by the Ithaca Times. This land is tax-exempt, due to Cornell’s status as a tax-exempt educational institution. Until now, Cornell has contributed money to the City of Ithaca, the Ithaca City School District and the TCAT bus, but not the Town of Ithaca.

According to the resolution, the voluntary contribution, which operates in lieu of taxes, will be used toward general services and improvements to town-owned infrastructure. This will be jointly agreed upon from a list of projects developed by the town and the University. 

The $425,000 contribution will be adjusted annually for inflation.

“We were aiming slightly higher, [but] we ended up with something that I feel is a good start,” said Rich DePaolo, deputy supervisor of the Town Board. “I feel that we maintained discretion for how the money will be spent, and it is certainly better than the agreement we had last year which didn’t exist.”

In the statement announcing the new agreement, Town of Ithaca Supervisor Rod Howe said the Town Board agreed to approach Cornell to inquire about the potential of coming to a payment in lieu of taxes deal last fall.

According to Howe, “discussions were initiated to augment support for services and initiatives that … are of mutual benefit to town residents and Cornell.” 

The contribution could help fund infrastructure improvements including on roads and bridges, stormwater systems, natural areas, parks and open spaces including trails, sidewalks and parking garages and lots and electric vehicle charging equipment. 

“This first-ever voluntary contribution agreement is a major accomplishment for the town and Cornell and further strengthens our important relationship,” said Joel Malina, Cornell’s vice president for university relations, in a press release. “The fact that it’s a 10-year agreement will ensure a consistency of dedicated dollars over that long-term time frame.”

Under federal and state law, colleges and universities receive tax-exempt status because of their educational purposes. Some Ithacans and Cornellians have said that Cornell’s tax-exempt status places a disproportionate burden on Ithaca’s homeowners and taxpayers since Cornell owns a large amount of property in Ithaca. 

Preliminary Tompkins County 2024 assessment data shows that the University’s property exempted from taxes totals more than $3.8 billion. $781 million of that tax-exempt property lies within the Town of Ithaca, along with another $87 million of taxable property. 

The University’s voluntary contributions to TCAT, the City, ICSD and now the Town attempt to offset the effects of the University’s tax-exempt status on the community. However, some community members say it still isn’t enough. 

For years, activists have been rallying and advocating for Cornell to increase their contribution to the Ithaca community, often comparing Cornell’s contributions to those of other private Ivy League universities across the country. 

While tax-exempt, in 2023 Cornell paid nearly $9 million in property taxes and municipal fees, which included $2.1 million in school taxes paid to ICSD. 

The Cornell Chronicle wrote that “Cornell’s presence in Tompkins County also generates a multitude of indirect financial benefits – totaling more than $2.4 billion annually — that helps to make the Ithaca region economically vibrant.”

This agreement comes at a time when the ICSD is planning to enter negotiations to request an increased contribution from Cornell University in lieu of taxes. In early June, ICSD’s Board of Education discussed forming an advisory committee to negotiate an increase of Cornell’s contribution from the current $650,000 to a proposed $10 million.

In addition to the ICSD, this past fall, Cornell updated its memorandum of understanding between the City of Ithaca and Cornell to provide a voluntary contribution of $4 million to the City annually for 15 years, an increase of $2.4 million from their previous MOU.  

While Cornell continues negotiations with the various facets of Ithaca, this agreement works to improve services and initiatives that inherently benefit both town residents and the Cornell community.

Dorothy France-Miller is a reporter from The Cornell Daily Sun working on The Sun’s summer fellowship at The Ithaca Times. This piece was originally published in The Ithaca Times.

Maddy Vogel is a news reporter for the Ithaca Times and Finger Lakes Community Newspapers. Contact her at [email protected].