The College Fix

Private schools’ total endowments valued at nearly $20 billion

A New York State Assembly bill would repeal the tax-exempt status of New York University and Columbia University, both in New York City, costing each institution at least $100 million.

The legislation would amend real property tax law, with the repeal applying to “private universities that received real property tax exemptions of one hundred million dollars or more during the prior fiscal year,” according to the New York State Assembly website.

The tax money from NYU and Columbia (pictured) would be rerouted to funding the City University of New York.

Economist Richard Vedder, professor emeritus of economics at Ohio University and senior fellow at the Independent Institute, questioned why it did not target other large universities in New York.

“There are a number of these moderately prosperous to very prosperous schools. Why would you pick on Columbia and NYU and not pick on these others,” Vedder said in a telephone interview with The College Fix.

“Part of the answer is, they want to take the money from the two rich New York City schools and give it to City University of New York,” he said.

“I wonder if this is just based on spite…a sort of anti-rich people motive,” Vedder said.

“This bill says let’s take some money from the first-class customers… and give it to the people sitting in the back of the plane,” he said.

He also offered insight regarding the elite schools’ power and influence.

“There’s been a flight to the rich schools in America,” he said. “That’s where the jobs are, that’s where the power is. It’s like a first class and a tourist class education for college kids.”

NYU’s endowment on June 30, 2023 had a market value of approximately $5.9 billion, excluding NYU Langone Health, according to the school website. Columbia’s endowment on the same date was estimated at $13.6 billion, according to the school.

New York State Senator John Liu and State Representative Zohran Mamdani, both Democrats, introduced the bill to the State Senate on Dec. 8, and again to the State Assembly on Dec. 29.

Neither Senator Liu nor Representative Mamdani replied to emails from The Fix asking for comment.

John Beckman, a spokesperson for NYU, called the repeal “misguided and unfair.”

“The property tax exemptions for universities are not something new or something NYU sought,” he told The Fix in an email.

The tax exemption is “a principle that has been enshrined in New York State real property law for over 200 years… in recognition of the special, vital, charitable mission of certain not-for-profit organizations, such as houses of worship, hospitals, schools and universities, etc.,” Beckman said.

Beckman said it would be unjust “to choose two charitable, non-profit organizations out of the thousands in the state and compel them to be treated like for-profit entities.”

“Were NYU suddenly taxed on its property, it would be extraordinarily disruptive, not only to our extensive operations, but to the now well-established mechanisms of support that NYU provides to every level of New York government,” he wrote.

Asked to respond to Beckman’s comments, Vedder questioned his characterization of NYU as a charitable organization.

“My own empirical analysis of university endowments done with Braden Colegrove suggests that a large proportion of the income generated from these endowments benefit employees instead of making colleges more affordable or demonstrably better,” he told The Fix.

A CUNY spokesperson who asked not to be named declined to comment on the bill in an email to The Fix.

“We don’t comment on bills that deal with where the revenue for CUNY should come from,” the spokesperson wrote. “As a public institution, CUNY is a proven engine of social mobility for our more than 50,000 annual graduates and we’re grateful to the State and City for their continued support.”

MORE: Policy experts, right-to-left, weigh in on taxing university endowments

IMAGE: Ad Meskens/Wikimedia Commons

Like The College Fix on Facebook / Follow us on Twitter