The College Fix

Like other poorly-governed cities, Providence, Rhode Island has spent itself into oblivion, faces huge budget shortfalls, can’t pay its bloated public sector employees, etc., etc. What’s a desperate city to do? Well, the piles of cash sitting atop College Hill–home of Brown University and its multi-billion dollar endowment–are looking mighty tasty. In fact, Providence may cannibalize its Ivy League school:

Brown would pay the city $38 million in property taxes each year – more than enough to solve the city’s budget problems – if only it wasn’t tax exempt.

And so city officials and state lawmakers applied some pressure to the university, and last week Brown agreed to contribute $31.5 million to Providence over the next 11 years. The money comes on top of nearly $4 million that Brown already voluntarily gives the city every year.

The town-vs.-gown confrontation reflects a trend across the nation as cities desperate for revenue try to get more money out of tax-exempt institutions such as universities and hospitals.

These institutions argue they already contribute to a city’s economy and quality of life through jobs, economic activity and community services. But as cities grapple with deficits and cash-flow crunches, they are succeeding in getting nonprofits to pay up. …

But “it is simply unfair to ask our residents and businesses to pay more and more in taxes each year, while preserving a 250-year-old special privilege for an organization with a $2.5 billion endowment,” City Councilman John Igliozzi said in January, when he introduced a resolution calling on the state to remove Brown’s blanket property tax exemption.

Really, though, that’s a false choice. If big cities could get their spending under control, they wouldn’t need to ring more money out of residents, businesses, or universities.

Click here to Like The College Fix on Facebook.