ROVIDENCE, R.I. - When Providence Mayor Angel Taveras recently warned that Rhode Island?s capital could run out of cash by June and face bankruptcy, he singled out the city?s largest employer and one of its most prestigious institutions - Brown University - for what he called a failure to sacrifice.
The Ivy League school, which as a nonprofit enjoys tax-exempt status, makes voluntary payments of a few million dollars a year to the city under an earlier agreement. But Taveras maintains the university should give more at a time when city taxes have gone up, services have been cut, schools have been closed - and he trimmed his own salary by 10 percent.
Continue Reading?Our taxpayers already subsidize the tax-exempt institutions in this city,? Taveras declared at a news conference at City Hall, noting that some residents saw their taxes hiked nearly 13 percent last year. ?It takes the revenue collected from 19,000 taxpayers like the one I just mentioned to account for the $38 million in property taxes not paid by Brown University.?
Struggling U.S. cities are increasingly looking to private universities and other tax-exempts for cash to cover what they would otherwise fork over in property taxes on valuable parcels. That has sometimes created strained relations with those institutions, which defend their special status by saying they bring jobs, generate economic activity and offer critical services in education and health care.
But the town-gown dispute has become particularly pronounced in Providence, where the city faces a roughly $22.5 million deficit in the current fiscal year and the mayor has warned of ?devastation? if Brown - and other local colleges and universities - don?t contribute millions more and city pensions aren?t cut.
Negotiations on Brown?s voluntary payments resumed last week when Gov. Lincoln Chafee, a Brown alumnus, brought together Taveras and two of Brown?s highest-ranking administrators, President Ruth Simmons and Chancellor Thomas Tisch. Representatives from both sides say they are trying to reach a fair agreement.
The city says Brown?s 200-plus buildings are worth more than $1 billion and would mean $38 million in revenue if they were taxed at the regular commercial rate. Brown is hoping to continue its expansion into a key economic development parcel on the edge of downtown; the so-called Knowledge District, where Brown opened its new medical school building in August, has been identified by the city and state as critical to the fiscal recovery of both.
Brown says it gives the city $4 million a year, including $1.2 million under a 2003 ?memo of understanding? as well as taxes on properties not used for educational purposes, such as its for-profit bookstore. Marisa Quinn, vice president of public affairs at Brown, said the university has offered to do more.
joe torre west virginia university michele bachmann jessica biel tim howard west virginia rob roy
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