SalemNews.com, Salem, MA

Opinion

August 27, 2013

Column: Private universities should pay more taxes

Private colleges and universities haven’t lost their property tax-exempt status — yet. But it shouldn’t surprise anybody, least of all those running those institutions, if they do sometime during the next few years. And they will have only themselves to blame.

Even the little game they play with local officials — making a “voluntary” PILOT (payment in lieu of taxes) every year — isn’t going to work, since that generally amounts to 25 percent or less of what they would owe if their property were taxable.

I’ve openly mocked this arrangement for decades: If a class of property is legally tax exempt, then its owners shouldn’t have to submit to a shakedown from local officials to “donate” even a percentage of the money instead. If they should not be tax exempt, change the law.

And this is not to endorse the arguments of city and town officials — that they need this money because of all the fabulous services they are supplying to the institutions. They have presumably been providing those services for the nearly 100 years that educational institutions have been tax exempt.

The reason they “need” the money is because they long ago gave away the store to the public employee unions, giving them lavish, unsustainable benefits including early retirement and pension packages vastly more generous than most of those who pay the bill receive.

Still, the argument of colleges and universities that they are “nonprofit” is wearing very thin, thanks to their own greed — raising pay and benefits for administrators and tenured faculty while sucking ever more money from students that in increasing measure comes from government grants and loans.

One of the latest dustups over this is in Princeton, N.J., where residents have sued to overturn the tax-exempt status of their local Ivy League university.

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