Free art walks and lectures arent cutting it anymore.
With U.S. university endowments at record values, the publics enchantment with the small perks that tax-exempt private schools provide to their hometowns has faded. Two dozen New Jersey residents grew so frustrated that earlier this year they joined a lawsuit challenging Princeton Universitys property-tax exemption, with one plaintiff calling the states only Ivy League school a hedge fund that conducts classes.
Of 28 private universities with endowments valued at more than $2 billion, just 11 reported giving any unrestricted moneycash with no strings attachedto their municipality last year, according to a Bloomberg News analysis. One of those schools, Dartmouth College, gave money but is required by state law to pay property tax on all its buildings, including dormitories and dining halls. Another four schools gave cash with restrictions. Others, particularly in the Northeast, have increasingly made sizable contributions for specific programs. But some make no financial contribution.
To be sure, schools pay taxes on revenue-generating commercial property and some offer homeowner assistance, jobs programs, scholarships to local students, and other community initiatives. Colleges may be the largest employer in town. Communities have started saying thats not enough.
In January 2011, the city of Boston adopted new guidelines for Pilots, or Payments in Lieu of Taxes, that called for voluntary payments based on an institutions tax-exempt property value. Participants are from the educational, medical, and cultural sectors that own property valued in excess of $15 million.
Of 19 colleges in the Boston area, only 5 paid what the city asked for in fiscal 2016, according to figures released in July. The city requested $25.3 million and received $13.1 million from the 19 institutions.
Colleges across the country face another possible source of pressure: Two U.S. congressional committees are reviewing responses to its inquiry to the 56 largest private schools about how their tax-exempt endowments are managed and spent.