Wednesday, May 13, 2009
The hunt for tax revenue is everywhere
The mayor of Providence, Rhode Island, David Cicilline, is proposing a $150 per semester per student tax on full-time students at all of the four private colleges and universities in the city, including Brown University. The city is facing a $17 million budget deficit, and the fee would generate between $6 million and $8 million per year.
Ivy League universities are bastions of progressive thought in the U.S., and one would think that students (and faculty, for that matter) would be happy to assist the financially-strapped town in which they live. Think globally, act locally, and all that. Sadly, there seems to be some reluctance to ante up:
"'We want to support the city as best we can, but financially is not really what we can afford to give,' said Heather Lee, president of the Brown Graduate Student Council. 'We're more able to provide labor, we're more able to apply the things that we're learning in the classroom, than we are to write a $300 check.'"Ah, payments in kind. I need to try that approach with the IRS on June 15 when my next estimated payment for tax year 2009 is due -- "you don't really want cash, when I can do some spreadsheet analysis or ditch digging or kneecap-whacking, do you?"
Town-gown relationships can be tricky, and Princeton Borough, Princeton Township and the University have been relatively fortunate in that area -- the area never really had a significant industrial base to begin with, so it has no decayed industrial base, as is the case with the much larger towns of New Haven or Providence, and no huge budget shortfalls. (Mercer County and the State of New Jersey are a different matter, but not on point). The property tax authorities can always hit up
Cicilline is really stretching, though, and his office admits that "there is no study showing how much students cost Providence for the use of police and fire protection and other services." The positive externalities of the economic activity generated by four schools in Providence is very significant -- estimated at $1 billion annually, and employing 9,000 in a city of 172,000 -- making the proposed student head tax look like an outright revenue grab to fill a gaping budget hole. The same phenomenon might be coming to a town, county, state or country near you.
12 Comments:
By 
, at
Thu May 14, 01:05:00 AM:
Are the schools in question actually part of the city, or are they entities unto themselves? If they are indeed part of the city, it would seem to me to be discriminatory to have a per head tax on students and not on all the other residents in Providence. If the schools are not part of the city then it looks like it would not be legal to assess such a tax. At any rate it illustrates how politicians are scraping the bottom of the barrel in an effort to raise more revenue.
By , at
Thu May 14, 01:23:00 AM:
Of course, they could cut spending or stop funding benefits for illegal aliens. It would be a change.
By , at
Thu May 14, 05:36:00 AM:
Maybe Providence needs more money to keep former Mayor Buddy Cianci living in the style he is accustomed to.
By 
TigerHawk, at
Thu May 14, 08:47:00 AM:
In Princeton, at least, the locals are beyond addled on this point. Within the last couple of years I was at a party and a circle of the local citizenry was sagely tut-tutting that Princeton University "should give something back" to Princeton Burough in the form of more money and services. I pretty much stopped the conversation in its tracks by expressing the opinion that the positive externalities of Princeton University far exceeded the negative ones: Housing prices were higher in Princeton than in surrounding towns (indicating that it is a more desireable place to live), that the university makes huge resources available to the locals, and that Princeton was the only town in New Jersey that educated people all over the world had heard of, an irrefutable measure of prestige that most locals value. Without the university, Princeton would be, well, Kingston, and even Kingston would not be Kingston if it were not next to Princeton. If anything, locals should be giving "something back" to the university.
Not surprisingly, this was an obviously unpopular position, but nobody offered even the slightest argument in refutation of it.
By , at
Thu May 14, 09:20:00 AM:
You go to the wrong parties, since I make that argument all the time and people generally agree with me. Beyond all the very good points you make, there is also the incredibly generous way the University allows locals to use athletic facilities and audit classes at very little or no cost. Every sport my kids play they learned under to the tutelage of Princeton coaches.
By , at
Thu May 14, 02:34:00 PM:
Is that Escort81 on the cover of the Ayn Rand book displayed in your Amazon ad?
The Centrist
P.S.: Agreed regarding the outstanding contributions that Princeton University makes to the Princeton community. The people that you have these discussions with have the fever that all of the sudden big institutions aren't paying their fair share, but beyond that piece of rhetoric they seem to have trouble describing that that fair share is. And if they can't articulate the point, it means that they don't really mean it, just that they either think it's chic to say it or that they're afraid of being labeled uncool if they don't.
The Centrist
By Elise, at
Thu May 14, 05:39:00 PM:
I'm not going to repeat myself here but if anyone is interested I'm arguing at Conor Clarke's blog at the Atlantic that I don't think the mayor's proposal is as stupid as the people over there seem to think it is. This may be the one chance commenters at TH get to agree with commenters at Clarke's blog
By Escort81, at
Thu May 14, 08:43:00 PM:
Centrist -
Good one, I deserved that zinger.
The only guy we know who had that kind of physique was Hammerin' Hank, the Delaware Destroyer, who certainly was one of the coolest dudes around.
Even losing to Mike Tyson in the Olympic Trials didn't make him any less cool.
By Escort81, at
Thu May 14, 09:15:00 PM:
Elise -
Thanks for your comment here and for the reference to your more detailed comments at The Atlantic.
It's funny, after I posted, I did think back to my undergrad days and came up with the same example you did of walking on the sidewalks (in this case on Nassau Street or Witherspoon Street) so that I could go grab a pizza a night or go get a haircut. In theory, a portion of the sales tax that is paid for goods or services that students buy in town and not on campus should flow back to the town from the state (which is the taxing authority for sales tax in NJ; I am unaware of any cities in NJ with a separate sales levy). I recall that the University generally did a better job of plowing and clearing than the borough.
There were a few incidents when Princeton police were called in to the eating clubs on Prospect (mostly to TI, I would guess), but by and large, the "proctors" did a pretty good job of handling security matters.
I just don't think you hear the noise about budget shortfalls in relatively less urban town-gown locations -- Hanover and Ithaca are examples of that. Post-industrial hollowed-out cities are a different matter, and a politician will look for money anywhere he can find it -- it becomes a matter of survival.
The thing that struck me as funny, which I mentioned up top (and Clarke not at all), was the reaction of the Brown student who was quoted in the piece. The VPOTUS might characterize her as "unpatriotic" with respect to the city.
You raise interesting point about the exempt status of the university property, which leads to another discussion about university endowments and what is "fair" in terms of tax status and/or minimum distributions. There has been some discussion at Harvard about that (at least, until the values tanked). But that's a post for another day.
By , at
Thu May 14, 09:41:00 PM:
Hey Super-Liberal Brown University Kiddies- Guess what? If you are upset because you think your taxes are unfair, then you are a conservative. Sorry!
By , at
Fri May 15, 04:08:00 PM:
Which is why the GOP shouldn't lose heart over the current bad shape of the "brand", as the marketing-geek newsies like to call it. There's nothing like thorough experience with high tax government to turn people into Republicans!
By Elise, at
Sat May 16, 12:16:00 PM:
The thing that struck me as funny, which I mentioned up top (and Clarke not at all), was the reaction of the Brown student who was quoted in the piece. The VPOTUS might characterize her as "unpatriotic" with respect to the city.It was funny but I suspect no good liberal would see if that way - after all, the students aren't "rich". Although if I were a cynical person I might wonder if some of the 60% of students not on financial aid might have parents who, oh, say, run hedge funds.
As for tax-exempt status, I look forward to that post. The power to tax is the power to destroy and given how the current Federal government seems to think public grammar and high schools are so much better than their private counterparts, logic would dictate they feel the same about public versus private colleges and universities. Although I haven't noticed Obama, the Congress, and Arne Duncan proposing to do away with PELL and student college loans. Still if EFCA passes maybe the NEA can unionize professors at public universities.
Hmm. Maybe there is some Vast Left Wing Conspiracy after all.
