Ithaca Mayor Laura Lewis announced on Thursday, September 7 that financial negotiations between the City of Ithaca and Cornell University have stalled.
These negotiations were part of the City’s goal of achieving an updated Payment In Lieu Of Taxes arrangement.
Despite the economic benefits Cornell brings to the area, Mayor Lewis believes that Cornell’s financial commitments to the city are insufficient.
The university’s tax-exempt properties account for almost half of the city’s assessed property value—about 45%—which would translate to around $33 million in city property taxes if not for their tax-exempt status. However, for 2023, the university’s agreement contributed only $1.6 million.
Negotiations between the two entities took place over four sessions from April to August. The City aimed for contributions equating to 25% of the hypothetical property taxes that Cornell would owe without its exemption, approximately $8 million.
While the city sought $5 million in its latest proposal, Cornell’s final offer stood at $3.15 million, prompting the end of discussions. The termination of negotiations leaves Ithaca facing a budgetary shortfall in 2024, beginning the fiscal year with a $1.6 million deficit due to the lack of scheduled payments from the university.
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