- Oil rig worker says he saw missing plane go down: report
- Pentagon: U.S. F-16 fighter jets to train with Poland near Ukraine
- Jerry Sandusky’s wife: Victims manipulated over money
- Ben Carson: America’s now ‘very much like Nazi Germany’
- Heroin found on N.J. toddler at day care
- Pistorius trial: Police conduct faces scrutiny
- Gaza militants fire large rocket barrage at Israel
- CBO chief: Projected job loss numbers from minimum wage hike are fluid
- Rep. Rangel: ‘No question’ Harlem explosion is result of gas leak, not terrorism
- Dog left in car blasts horn for 15 minutes
Cities seek more money from tax-exempt colleges
PROVIDENCE, R.I. (AP) — Wary of tax increases, weary of layoffs and determined to avoid bankruptcy, Providence Mayor Angel Taveras had only to gaze up at his city’s Ivy League campus to see a way out of the morass.
On College Hill sits Brown University, with a $2.5 billion endowment and property worth an estimated $1 billion. Brown would pay the city $38 million in property taxes each year — more than enough to solve the city’s budget problems — if only it wasn’t tax-exempt.
And so city officials and state lawmakers applied some pressure to the university, and last week Brown agreed to contribute $31.5 million to Providence over the next 11 years. The money comes on top of nearly $4 million that Brown already voluntarily gives the city yearly.
The town-vs.-gown confrontation reflects a trend across the nation as cities desperate for revenue try to get more money out of tax-exempt institutions such as universities and hospitals.
These institutions argue they already contribute to a city’s economy and quality of life through jobs, economic activity and community services. But as cities grapple with deficits and cash-flow crunches, they are succeeding in getting nonprofits to pay up.
“It’s ‘We need money, you have money, and we’re going to pressure you to do this unless you give us a voluntary payment,’” he said.
Baltimore officials, for example, threatened to tax hospital and university dorm beds before Johns Hopkins University and other tax-exempt institutions agreed to make contributions.
Boston, with one of the biggest concentrations of colleges, universities and research centers in the country, collects significant amounts of money from such institutions. Harvard University, Boston University, Massachusetts General Hospital and several other institutions made $34 million in payments in lieu of taxes in 2010 in what the city says is the biggest such program in the nation.
In Lancaster, Pa., the city sends out letters every year asking nonprofit organizations to pay one-third of what would have been their tax bill. Lancaster General Hospital pays more than $1 million voluntarily, more than its taxes would have been, Mayor Rick Gray said.
“They said they feel they should be supportive of the community,” he said. “We’re certainly grateful.”
Brown has enjoyed a tax exemption since Colonial days but decided to kick in more money because it sees itself as a partner in Providence’s economy and because it wants good relations with the city, said Brown University President Ruth J. Simmons.
“The idea that we have an endowment, a budget that will bear these kinds of costs is not correct,” she said. Still, she said, it was obvious that this was “a time that requires we step up.”
The use of payment-in-lieu-of-tax deals is on the rise. Such agreements have been carried out in at least 18 states since 2000, mostly in the Northeast, according to a study by the Lincoln Institute of Land Policy.
TWT Video Picks
An America drowning in red ink is the land of the free no more
- Inside the Beltway: A new interest in Rahm Emanuel for 2016?
- Female TSA officers say pat-down duty leads to workplace discrimination
- HURT: John Kerry The ridiculous face of a ridiculous U.S. diplomacy
- Deportations come mostly from border, DHS chief says
- Special ops forces wearing thin from high demand
- Last laugh: Marine vet fires off jokes from the grave with own obituary
- Bill Clinton poses for photo with Bunny Ranch prostitutes
- Ben Carson: America's now 'very much like Nazi Germany'
- Kim Jong-un calls for execution of 33 Christians
- U.S. pilot scares off Iranians with 'Top Gun'-worthy stunt: 'You really ought to go home'
Chaos as Manhattan building explodes
Pope Francis meets his 'mini-me'
Celebrity deaths in 2014
Winter storm hits states — again