Lots of people are starting to think that colleges should have more skin in the game.
Walt Gardner writes at the James G. Martin Center:
It’s Time to Make Colleges Pay Property TaxAlthough the Ivies and other elite colleges and universities in the U.S. are financial titans, they are registered with the Internal Revenue Service as 501(c)(3) charitable nonprofit organizations. As a result, their vast property holdings are exempt from taxation in all 50 states. The rationale for this status is that higher education is an inherent public good. At least that has been the assumption under which this country has long operated.But this argument has increasingly been called into question by events over the last few years, culminating in the headline-making responses by university presidents to a recent congressional panel. It’s clear by now that what transpires on many campuses is more indoctrination than education. As Wall Street Journal columnist Peggy Noonan put it last month (quoting CNN’s Fareed Zakaria), colleges “have gone from being centers of excellence to institutions pushing political agendas.” Since that is the case, such institutions don’t deserve their special treatment. They have not held up their end of the bargain.This state of affairs may explain in part what New York State lawmakers hope to accomplish where higher-ed tax policy is concerned. A bill introduced last month by Queens Assemblyman Zohran Mamdani would eliminate enormous property-tax breaks for Columbia University and N.Y.U., both of which have expanded to become among New York City’s top-10 largest property owners. Yet, whatever their motives, lawmakers are sending a not-so-subtle message that these institutions can’t have it both ways. They can’t continue to avoid most taxes while failing so spectacularly to serve the public interest.Sadly, New York State is an outlier. In 2018, the Tempe City Council approved an Omni Hotel and Conference Center project that would pay no property taxes because it is located on land owned by the Arizona Board of Regents, which oversees Arizona State University. Other states have made similar bargains. In many parts of the country, the best that can be hoped for at present is that officials pressure private universities to make voluntary “payments in lieu of taxes” (PILOT) or similar annual donations.
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