A new report from Syracuse's city auditor says Syracuse University should be paying more for property it owns in the city. It comes at a time when the city and university are negotiating a new services agreement.
The university owns more than $2 billion worth of property in the city, but because of its tax-exempt status, it pays no property taxes. Instead, the university pays the city $2 million each year as a payment in lieu of taxes (PILOT) under an agreement reached 15 years ago.
In a 62-page report released Monday, City Auditor Alex Marion if the university wasn't tax-exempt, it would be paying a lot more.
"If Syracuse University was paying their full value of assessed property taxes to the city, it would be $16 million to the city, $19 million to the school district," Marion said. "I think that we should be getting much closer to that number than we currently are."
He said the university needs to up that PILOT amount for a city dealing with sky-high poverty rates.
"We cannot have a situation where we continue providing the essential services to some of the poorest people in the United States, with 50% of our real estate being tax exempt, and the real estate that is tax exempt in many cases, belongs to some of the wealthiest landowners we have here," said Marion. "And I think that that dynamic has become unsustainable going forward."
City officials have complained for decades that nearly half of the property in the city is tax exempt. But what's different now, said Marion, is that SU is expanding it’s economic model to include athletics and ancillary services like parking and dining.
"If you are running a professional sports franchise and have dining options, cafeterias, if you're looking at parking services, if you're buying up real estate to expand your residential holdings, that's not the model we gave people tax exemptions for," he said. "And I think it's time we have a very serious, even if it's an uncomfortable conversation about changing that."
Marion suggests negotiations should include funds for the Syracuse City School District. The report also noted that other education institutions have more generous agreements with host communities. For example, Brown University pays $8.7 million a year to providence, Rhode Island. Cornell University pays the city of Ithaca $4 million a year, and Yale University pays New Haven, Connecticut nearly $30 million a year.
In a statement, Syracuse University pushed back on the report, saying no one from the university was consulted and the report misrepresents the "strength and depth" of the university's relationship with the city.
"Syracuse University has long been the only nonprofit with a voluntary services agreement with the City of Syracuse, " the statement read. "However, the Auditor’s report incorrectly characterizes this arrangement as a Payment in Lieu of Taxes agreement. It is not. It is a services agreement, reflecting both direct cash payments from the University to the City and substantial in-kind contributions. The auditor’s report ignores the full scope of what the University contributes our community.
These include educational, cultural, financial, athletic, and clinical benefits and services, which well beyond commitments contemplated in any single agreement. The University values its deep and broad partnerships and contributions to the City, its residents and community organizations. A recent economic analysis found that the University contributes $1.8 billion annually to the Central New York economy, supports one in every 13 regional jobs, and generates $743.9 million in tax revenue and public savings for New York taxpayers."
