BY: MEGAN MODESTE
The reinstatement of funding for biotechnology companies in New York has been postponed by the New York City Council Committee on Finance after their meeting on October 4th. Susan Rosenthal, the Senior Vice President of Life Sciences and Healthcare at New York City Economic Development Corporation testified to show committee members that the tax credit is beneficial and should be renewed but the Finance Committee was not confident of how impactful the fund was for the city.
This fund gives biotech companies in New York a refundable credit of 250,000 dollars and the city can’t exceed 3,000,000 dollars in a given year. The overall intent of creating this credit was “to assist new start-up firms that are researching new ideas and developing new products to foster a vibrant industry in New York City,” said committee member Justin Brannan.
The biotechnology credit first came about by state law and then was reinstated in 2009. Funding was renewed for years until the state did not sign for renewal and the bill lapsed in 2019.
Biotechnology is a growing industry in New York City and as new small biotech companies form this credit would cover “qualifying expenses related to acquiring research and development property, certain expenses related to training employees, and other research and development expenses” for them according to the Finance Committee report.
Rosenthal said the funding from the past has encouraged an increase in biotech companies, jobs, and medical advancements in New York City. The report said that in March 2023, life sciences employed 84,700 people in the City. Biotech companies “employ our neighbors, offer internships for our young people, and provide vital job training,” said Rosenthal. Rosenthal also explained how biotechnology helped the city through the COVID-19 pandemic and will continue to keep the city safe in future pandemics. Rosenthal gave data from a point of view of long-term effects. She explained that with the continuation of the tax credit for biotechnology companies the industry’s profit growth will be 40 times more than what it is now within 10 years.
The City Council is focused on funding for the immediate future and the City Council wants to make sure this tax credit is benefiting and positively impacting the city. Council members are concerned that the jobs being formed are not going solely to New York City residents and that the money they are putting into the program is not bringing timely impacts.
The Finance committee sees the overall goal of this bill as vague. Rosenthal was unable to provide them with any evidence that the industry would bring in more revenue than they are giving to fund it. The funding is to be renewed every 3 years but the timing of the biotechnology plan is longer than this. This brought the committee to postpone any action to be taken on renewing the bill. They are not making it a property right now but they may come back to it later.