Buffalo Billion Initiative Supports Growth of Startups Across Technology Sectors; University at Buffalo Will Establish the First Phase of the Innovation Hub with $32M Grant
Continues Phase-In of Middle Class Tax Cut and Local Property Tax Relief Credit
Signs Legislation Launching Second Phase of the Excelsior Scholarship Program; Families Making up to $110,000 Per Year Now Eligible for Tuition-Free College
Governor Andrew M. Cuomo today announced highlights of the Middle Class Recovery Act in Buffalo, delivering on the Governor's promise to invest in jobs, reduce taxes, and expand access to education. Highlights included the launch of the Innovation Hub, which will provide comprehensive, seamless support to accelerate the growth of Western New York startups through a $32 million investment; the continued phase-in of the Middle Class Tax Cut and Local Property Tax Relief Credit; and the signing of legislation which launches the second phase of the Excelsior Scholarship program, increasing the income eligibility threshold, allowing New Yorkers with household incomes up to $110,000 per year to be eligible.
"At a time when middle class New Yorkers are facing growing challenges and rising costs, New York is reducing their tax burden and investing in jobs, education and opportunity for all," Governor Cuomo said. "The Middle Class Recovery act continues to create a path forward for those striving to get ahead in Western New York and across the state, building a stronger, brighter New York."
Innovation Hub in Buffalo
The Empire State Development Board of Directors met today and approved a $32 million investment to be facilitated by the University at Buffalo toward the launch of the Innovation Hub that will drive innovation and entrepreneurship. The Innovation Hub's goal is to dramatically accelerate the commercialization of technologies generated by the University at Buffalo, Hauptman-Woodward Medical Research Institute, Roswell Park Comprehensive Cancer Center, Kaleida Health and the Jacobs Institute. It will increase the startup and growth of technology companies, which will ultimately grow private investment and jobs in Western New York.
"We're aggressively working to lower costs and taxes for hard working New York families as part of the Middle Class Recovery Act," said Lieutenant Governor Kathy Hochul. "Investments as part of the Buffalo Billion and other initiatives are growing Buffalo's economy and creating jobs. The launch of the Innovation Hub highlights the continued focus on high-tech jobs of the 21st century. At the same time, the second phase of the Excelsior Scholarship program will support students' education and prepare them for opportunities to reinvest in the Buffalo community and beyond."
UB President Satish K. Tripathi said, "At the center of any thriving entrepreneurship hub is the research university. Through our extensive faculty expertise, our longstanding engagement in the community, and our established record of student and faculty entrepreneurial collaborations —in areas ranging from the life sciences and materials science to IT and sustainability — UB has created a dynamic environment where entrepreneurship can grow and flourish."
Successful entrepreneur ecosystems and communities require several key components, including research to generate new innovations, business expertise and support, venture funding, access to incubators and specialized equipment, and a talented workforce. UB and its Hub partners have a strong innovation portfolio from faculty, staff, researchers and students. The Hub will provide the necessary resources to move those innovations from the classroom, lab or clinic into the market place through new startups. This grant enables the Innovation Hub to provide incubator space to house technology startups on the Buffalo Niagara Medical Campus, establish a technology commercialization investment fund, and deliver mentoring and other support programs and services to guide innovators from idea to market.
The Innovation Hub marks the state's second Buffalo Billion investment dedicated to building Buffalo's entrepreneurial ecosystem. While 43North will continue to attract later stage startups from around the globe, the Innovation Hub focuses on providing the resources to enable innovations from the region's own research institutions and individuals to be spun out into companies that will grow in Western New York.
"The Middle Class Recovery act continues to create a path forward for those striving to get ahead in Western New York and across the state, building a stronger, brighter New York."
In his January 2017 State of the State address, Governor Cuomo announced Phase II of the Buffalo Billion Initiative, a $500 million investment in Western New York. Included in this plan was a $40 million allocation to create an Innovation Hub on the Buffalo Niagara Medical Campus. The Hub will leverage resources of the BNMC's partner organizations - including UB, 43North and Roswell Park - to help further advance the entrepreneurial ecosystem in the Buffalo Niagara Region. Future grants from the remaining $8 million will be approved by the ESD Board of Directors at a later date.
The Innovation Hub project involves three main components including:
- Planning, design, renovation, construction, furniture, fixtures and equipment funds for the approximately $7 million conversion of UB's Center of Excellence for Bioinformatics & Life Sciences into incubation and entrepreneur support space; incubator space will be made available to companies affiliated with UB and partner organizations, including Roswell Park Comprehensive Cancer Center, Kaleida Health, Hauptman-Woodward Medical Research Institute, and the Jacobs Institute. UB will utilize additional space in CBLS for entrepreneur support programs, events, education and related services. The first phase of incubation space is expected to become available in late 2019.
- Establish the $13.5 million Investment Fund to provide proof of concept and pre-seed/seed investments for startups; the fund is expected to launch in early 2019.
- Provide outreach to and engagement with UB and participating institutions' faculty, staff and students to increase the number and quality of startup opportunities; coordinate and execute startup support programming and develop new initiatives to guide startups through all phases of development; and personnel support to administer the new programs and services. This component will utilize approximately $11.5 million of the funds over five years. Programs will begin this year.
Protect New Yorkers from Federal Tax Changes: The recently enacted federal tax law has negative fiscal implications for many New Yorkers. By gutting the deductibility of state and local taxes, the law effectively raises middle class families' property and state income taxes by 20 to 25 percent. New York is fighting back against the federal plan and the loss of both income tax deductibility and property tax deductibility. To combat the assault, the FY 2019 Budget:
- Expands Charitable Contributions to Benefit New Yorkers: The FY 2019 Budget creates two new state-operated Charitable Contribution Funds to accept donations for the purposes of improving health care and education in New York. Taxpayers who itemize deductions may claim these charitable contributions as deductions on their Federal and State tax returns. Any taxpayer making a donation may also claim a State tax credit equal to 85 percent of the donation amount for the tax year after the donation is made. In addition, the legislation authorizes school districts and other local governments to create charitable funds. Donations to these funds would provide a reduction in local property taxes (via a local credit) equal to a percentage of the donation.
- Creates Alternative Employer Compensation Expense Program: While Federal tax reform eliminated full State and local tax deductibility for individuals, businesses were spared from these limitations. Under the FY 2019 Budget employers would be able to opt-in to a new ECEP structure. Employers that opt-in would be subject to a 5 percent tax on all annual payroll expenses in excess of $40,000 per employee, phased in over three years beginning on January 1, 2019. The progressive personal income tax system would remain in place, and a new tax credit corresponding in value to the ECEP would cut the personal income tax on wages and ensure that State filers subject to the ECEP would not experience a decline in take-home pay.
- Decouples from Federal Tax Code: The FY 2019 Budget decouples the state tax code from the federal tax code, where necessary, to avoid more than $1.5 billion in State tax increases brought solely by increases in federal taxes.
Continue the Phase-In of the Middle Class Tax Cut: The Budget supports the phase-in of the middle class tax cuts. In 2018, average savings will total $250 and, when fully effective, six million New Yorkers will save an average of $700 annually. Once fully phased in, the new rates will be the lowest in more than 70 years - dropping from 6.45 to 5.5 percent for incomes ranging from $40,000 - $150,000 and 6.65 to 6 percent for incomes ranging from $150,000 - $300,000. The new lower tax rates will save middle class New Yorkers $4.2 billion, annually, by 2025. When fully phased in, over 345,000 Western New Yorkers will see an average tax cut of $651.
Continue the Local Property Tax Relief Credit: The Property Tax Credit, enacted in 2015, will provide an average reduction of $380 in local property taxes to 2.6 million homeowners this year alone. By 2019, the program will provide an additional $1.3 billion in property tax relief and an average credit of $530.
Expanding Access to Higher Education
Governor Cuomo today signed legislation launching the second phase of the Excelsior Scholarship Program. This legislation increases the income eligibility threshold for the Excelsior Scholarship Program, allowing New Yorkers with Household incomes up to $110,000 per year to be eligible. When fully implemented, this first-in-the-nation program will provide tuition-free college at New York's public universities for families making up to $125,000 a year. To continue this landmark program, the FY 2019 Budget includes $118 million to support an estimated 27,000 students in the Excelsior program. Along with other sources of tuition assistance, including the generous New York State Tuition Assistance Program, the Excelsior Scholarship will allow approximately 53 percent of full-time SUNY and CUNY in-state students, or more than 210,000 New York residents, to attend college tuition-free when fully phased in.
To be eligible for an Excelsior Scholarship, students must be New York State residents, plan to attend a SUNY or CUNY two- or four-year college, take 30 credits per year (including Summer and Winter sessions), and be on track to graduate on time with an Associate's Degree in two years or a Bachelor's Degree in four years. Recipients must also plan to live in New York State for the length of time they received the award.
Under this groundbreaking program, nearly 80 percent, or 940,000 middle-class families and individuals making up to $125,000 per year, would qualify to attend college tuition-free when fully phased in. A regional breakdown is available here.
In Western New York, nearly 30,000 undergraduate full-time resident students attend SUNY or CUNY schools. Nearly half of those students are attending school tuition free through the Excelsior Scholarship program and other sources of tuition assistance, such as TAP Pell and other grants.