Supporters call to enact bills holding private colleges, universities financially accountable to host cities

 

STATE HOUSE – Surrounded by fellow Providence elected officials and a coalition of community members and student-led organizations, Rep. David Morales today called for passage of his legislation to hold private universities and colleges more financially accountable to the communities that host them.

The bills would enable municipalities to tax properties owned by private colleges and universities and would allow host communities to impose up to a 2% tax on their endowments, to be used only for the host’s public school district.

“Across Providence, we are struggling with a gap in quality education. While our private higher-education institutions hold huge fortunes in both income-generating property and endowments, our city lacks the resources to properly support our K-12 students in public schools. Ironically, one reason our city lacks funding is the fact that 40 percent of our land is tax-exempt, largely due to the property ownership of private higher education institutions who have the privilege of being exempt from taxation,” said Representative Morales. “Given that our thriving higher education institutions are generating enormous amounts of income and have vast wealth and property holdings, they should be fully supporting our community through tax contributions, the same as working people and small businesses. Now is the time we establish standards of accountability and finally require fair investments into our communities.”

Brown University’s endowment was valued at $6.9 billion as of July. Its properties, if they were not tax-exempt, would generate an estimated $49 million annually for Providence. Providence College would owe $16.2 million; Johnson & Wales University, almost $12.8 million; and Rhode Island School of Design, $11.6 million.

Brown does contribute about $4.4 million annually to the city through a memorandum of understanding signed in 2003, but that agreement expires next year.

The first bill (2022-H 7956) would enable cities and towns to tax properties that are owned by private colleges and universities, whether or not the property is used in support of the school’s mission. Current law allows taxation of those properties that the schools own but either lease to others or use for purposes other than education, such as parking lots or retail.

Sen. Tiara Mack (D-Dist. 6, Providence) has introduced that bill in the Senate (2022-S 2600) as well. 

The second bill (2022-H 7813) would enable municipalities to impose a tax of up to 2% on the endowment of any private institution of higher education located in that city or town. Under the bill, all revenues generated by that tax would be used exclusively to support the public school district of that municipality.

“While universities contribute to our municipalities in innumerable ways and we appreciate their local impact, their simultaneous harm is seemingly never quantified: their challenging impacts on quality of life, their strains and demands on limited city services, demolition of historic housing stock, their impact on rising rents and property taxes, and their  historical displacement of people who once lived in vibrant long-standing communities, such as Fox Point,” said Providence Councilman John Goncalves who is in support of both bills. “These bills can enable us to compel our universities to deepen their commitments and ensure that we’re alleviating the overwhelming burden that our taxpayers have been bearing the brunt of for far too long.” 

Among the individuals and organizations that participated in a State House event today in support of the bills were Senator Mack, Providence Councilman John Goncalves, Providence School Board Member Ty'Relle Stephens, Students for Educational Equity at Brown University, Direct Action for Rights and Equality (DARE) and Housing Opportunities for People Everywhere (HOPE) at Brown University.

 

 

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