And critics say the public doesn't get enough in return for private universities' tax-exempt status.
In their business dealings, top-tier universities often behave more like corporations than street-level nonprofits.
REPRESENTATIVE Paul Kujawski of Webster says his proposal to tax the endowments of the state's wealthiest universities and colleges was intended in part to "gain a lot of attention from the institutions." ... Lawmakers targeting endowments to boost state revenues His amendment to the House budget calls for a study of a 2.5 percent assessment each year on university endowments over $1 billion. The tax would affect nine of them, and in theory could generate an enormous amount of revenue; Harvard alone, with its endowment of $34 billion, would be on the hook for $840 million a year. Kujawski says... snip
Major research universities are the closest thing Massachusetts has to a goose that lays golden eggs. The nine schools in question employ a total of 27,000 people and pay $4.5 billion a year in wages and salaries, according to the Association of Independent Colleges and Universities in Massachusetts.
They bring in brainpower and outside research dollars. They fertilize the local healthcare, technology, and financial-services sectors - three other cornerstones of the local economy. And like most higher-education institutions, the targeted nine are stabilizing forces, since enrollments generally do not drop even in lean times.
Kujawski says the 2.5 percent rate was inspired by Proposition 2 1/2, the property-tax-control measure that often frustrates city and town officials. He thinks the assessment rate on the wealthy nine "wouldn't be significant enough to be damaging." But even Harvard would miss $840 million a year.
Wealthy private campuses make fat targets, and not just because of their exclusivity. For all the sophistication of their research, they often seem oblivious in their dealings with their host communities.
http://www.boston.com/bostonglobe/editorial_opinion/editorials/articles/2008/05/09/how_to_strangle_an_economy/
