Comment on Cities seek more money from tax-exempt colleges

Cities seek more money from tax-exempt colleges

Cities seek more money from tax-exempt colleges Associated Press Copyright 2012 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Updated 05:09 p.m., Monday, May 7, 2012 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. 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. [...] 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 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. 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. Going after churches is a political non-starter, and nonprofit community organizations don't have much money to offer. Providence couldn't afford to make adversaries of universities and health care providers — two growing sectors seen as the state's best hope for reversing years of rising unemployment and economic stagnation. Brown had no legal obligation to contribute more but was facing significant political pressure in the Statehouse, where lawmakers were considering legislation that would authorize cities to require payments in lieu of taxes from tax-exempt institutions. [...] it is simply unfair to ask our residents and businesses to pay more and more in taxes each year, while preserving a 250-year-old special privilege for an organization with a $2.5 billion endowment," City Councilman John Igliozzi said in January, when he introduced a resolution calling on the state to remove Brown's blanket property tax exemption.

 

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