On September 19, over one hundred community members, Cornell University students, staff, and faculty gathered at Ho Plaza, calling for an increase in the university’s contributions to the City of Ithaca. Cornell professors and student activists delivered speeches. The crowd marched to the Collegetown Avenue Stone Arch Bridge, chanting, “Cornell, open your wallet.” At the bridge, more fervent speeches were delivered by council members and labor organizers.
The demonstration, organized by the Make Cornell Pay Coalition of the Ithaca Democratic Socialists of America, was in response to Cornell’s proposal of a 4 million dollar voluntary annual contribution to the city, announced on September 14. The previous financial agreement between the City and Cornell is set to expire in June 2024.
“They didn’t offer 4 million dollars out of the goodness of their hearts,” said Alderperson Tiffany Kumar.
Cornell University, being an educational institution, is tax-exempt. Cornell owns an estimated sixty percent of city property. It is exempted from more than 2.7 billion dollars in property taxes, according to the Tompkins County 2022 assessment. As of 2023, the school’s annual operating budget is 5.5 billion dollars, with an endowment of 10 billion dollars.
The history of Cornell University’s Memorandum of Understanding (MOU) dates back to 1995. At the time, Cornell would invest nearly 100 million dollars to renovate its older buildings. In May of that year, former mayor and Cornell engineering professor Ben Nichols, refused to give the school construction permits, demanding 2.5 million dollars annually.
The following October, the city and Cornell established the MOU, premised on the idea that both entities faced an “inextricably entwined future.” For the 1995-1996 budget season, the City received a 250 thousand dollars payment in lieu of taxes (PILOT). The MOU also allowed the formation of a working group consisting of three executive members of the school, the Mayor, and two council members. The permanent Ithaca-Cornell working group meets quarterly and creates recommendations to decision-makers regarding Cornell’s impact on the City. Since then, the PILOT has risen to 1.6 million dollars annually because it is based on the Consumer Price Index (CPI). The CPI indicates the changes in prices of a fixed category of goods bought by an average household. It is based on national average consumer habits. Cornell also relies on this measure to adjust employee salaries and the amounts it provides in financial aid. However, the CPI does not take into account municipal taxes or the cost of housing.
The amended MOU states, “Cornell was among the first universities in the nation to make voluntary payments to its local municipality in support of public services, and it remains committed to doing so within the availability of its financial resources.”
With the City’s budget season and the expiration of the MOU approaching, community members have sought more transparency on the status of negotiations.
At the August 2 Common Council meeting, more than a dozen people spoke during the public comment session, calling for increased contributions from the school and more information on negotiations between the City and Cornell University.
“If Cornell administration gets their way, they’ll make another 10 billion dollars in profit while homeless live and die a couple of miles away,” said Nathan Sitaraman, a Cornell postdoctoral associate who ran for the Common Council Third Ward seat in the local democratic primaries.
Some of the current challenges the City faces, mentioned by commenters, are the aforementioned increasing homeless population, a lack of public transportation, city staff shortages, and rising rents (which contribute to housing unaffordability).
As far as public transportation, Tompkins Consolidated Area Transit (TCAT) had to shut down routes in September due to staffing shortages. In 2017, 26 percent of TCAT’s revenue came from Cornell’s contribution: 20 percent through fare reimbursement and 6 percent of direct contribution to the operating revenue. Cornell pays for unlimited TCAT rides for its employees and new-to-Cornell students. The rest of the students have access to free bus rides after 6 p.m. The City, County, and Cornell University contribute the same amount each year to TCAT.
The Make Cornell Pay coalition demands that Cornell’s contribution to TCAT is enough for free public transportation and sufficient staffing and wages.
The Fair Share Campaign, led by Margherita Fabrizio, candidate for the fifth ward, calls upon Cornell to follow in the footsteps of other universities who contribute to their host towns through voluntary payments. In her guest opinion to the Ithaca Times, Fabrizio references the contributions of Yale University and Princeton University. In 2021, Yale agreed to 52 million dollars in direct contribution to its host city, New Haven, over six years. Princeton will contribute 14.6 million dollars to the Princeton Town School District over five years. In 2022, the school voluntarily paid property taxes of 6.2 million dollars on tax-exempt property. In 2023, the municipal property tax rate was reduced by two percent. Princeton elected officials claimed this reduction to be a direct result of the school’s contributions.
Fabrizio has particularly vocalized concerns regarding contributions to ICSD. In August, Cornell announced an increase in contributions to the school district from 500 to 650 thousand dollars annually. Fabrizio argues that if Cornell contributed more to the school district, a huge burden would be lifted off of Ithacans, who fund ICSD through property taxes. She firmly believes the school district should be involved in the PILOT discussion.
On August 11, negotiations had stalled due to the university’s refusal to contribute more than 3.15 million dollars annually. The City’s counteroffer was 5 million dollars, less than the initial 8 million dollars annually proposed in earlier negotiation sessions. The information was released on September 7 by The Ithaca Voice, which obtained a press release on September 6.
A week later, a joint statement was released by Cornell President Martha Pollack and Mayor Laura Lewis. Both entities agreed to a payment of 4 million dollars annually. Now, the Ithaca Common Council and Cornell University’s Board of Trustees must vote in order for the MOU to be amended.
Initially, the MOU was set to be a voting item at the September 20 Common Council meeting. However, at the beginning of that meeting, Mayor Lewis announced that MOU would be voted to be tabled instead, meaning it will be a voting item at an October special Common Council meeting.
Nonetheless, almost one hundred people attended the meeting. Due to the overwhelming number of commenters, Mayor Lewis reduced each person’s allowed speaking time from three to two minutes. Cornell students, alumni, faculty, community members, and political candidates spoke. Commenters collectively called on the council to vote against the 4 million dollar proposal, which they claimed to be insufficient.
“Wherever you are trustees and president far above Cayuga’s water, hear our chorus; we will be heard,” said David Yearsley, a Cornell professor and longtime Ithaca resident.
During the second hour of the meeting, as the Common Council motioned a discussion on the MOU, Mayor Lewis invited Joel Malina, Cornell’s Vice President for University Relations, accompanied by Jared Pittman, Associate General Counsel at Cornell, to exchange with the Council. The two were not in
attendance during the public comment session. They engaged in back-and-forth discussions with common council members.
Mayor Laura Lewis repeatedly expressed her support for the offer. Alderperson George McGonigal was also in favor. “We are hungry for revenue. And this is not the offer of Thanksgiving dinner but it is a very tasty sandwich and bowl of soup,” said McGonigal.
Meanwhile, other alderpersons expressed concerns about the length of the agreement, the unclear chain of events that led to the deal, and the size of the contribution. Yet, throughout discussions, Malina urged the common council to accept the agreement. “This is a significant opportunity for Cornell and the City to really put immediate and significant new resources to work for the people of the city,” said Malina regarding the 4 million dollar offer.
Alderperson Jorge Defendini raised concerns about the council’s ability to assess the proposal when the budget season is approaching. With the MOU proposal coinciding closely with budget finalization, Defendini claimed that the city may be obliged to significantly raise property taxes if they cannot receive essential funds from the school.
Additionally, Alderperson Rob Gearhart brought up a clause in the MOU that prohibits the City from attempting to take judicial action to change the school’s tax status. Gearhart desired Cornell to offer flexibility and remove this clause.In response, Malina said, “We do not think it is appropriate for us to be in this relationship only to have the city turn around and sue us for our tax-exempt status.”
Earlier in the meeting, Alderperson Robert Cantelmo, running for mayor, expressed his eagerness to review state law regarding the tax-exempt status of Cornell’s residences and non-educational buildings.
“Y’all need us as much as we need y’all,” said Alderperson Phoebe Brown, referring to Cornell.