Skip to Content, Navigation, or Footer.

Debate on 'student tax' takes center stage this fall

With a sour economy squeezing the budgets of local governments and universities alike, Brown officials have spent the summer fighting to dissuade state lawmakers from passing legislation that would allow cash-strapped cities to recover funds from private colleges and large non-profit institutions.

The first such measure, a "student impact fee" first proposed by Providence mayor David Cicilline '83, has rankled student leaders as well as administrators. It would allow Providence and other Ocean State municipalities to collect $300 per year for every out-of-state student attending a private college or university within the city limits.

At Brown, the proposed student tax would apply to over 95 percent of undergraduate, graduate and medical students, adding up to about $2.3 million in total per year. (The bill leaves up to schools whether to assess the fee to students or pay on their behalf and raise the funds another way.)

Another bill pending in the General Assembly would partially do away with the property tax exemption for large non-profits, requiring those with holdings valued at over $20 million to pay property taxes at 25 percent of the normal rate.

It's not clear how much this provision could cost Brown, Vice President for Public Affairs and University Relations Marisa Quinn wrote in an e-mail to The Herald, but the fees are projected to raise $22 million in total from Providence schools and hospitals.

Quinn added that University officials would not speculate on how they would pay either fee if it were levied and are instead focusing on trying to prevent the bills from becoming law.
President Ruth Simmons personally waded into the debate this summer, making the case that the measures are misguided. Two e-mails from Simmons in June urged community members to voice their opinions of the bill.

It remains unclear how likely either bill is to pass.

The student impact fee bill was voted out of committee in the House but was not debated before the summer recess. It's not clear whether the legislation will be on the agenda when the House — which is currently in recess until January — reconvenes for a two-day session on October 14 and 15, said Larry Berman, spokesman for Majority Leader Gordon Fox, D-Dist. 4, who sponsored the bill.

During that brief session, the bill will be competing for debate time with many other bills left over after the June recess, including a ban on indoor prostitution — which is currently legal in Rhode Island thanks to a loophole — and a proposal to remove the last three words from the state's official name, Rhode Island and Providence Plantations.

The Senate, whose legislative session also resumes in January but occasionally reconvenes briefly to deal with pressing issues, has not yet advanced a version of either bill out of committee. The House property tax bill and its Senate companion remained in their respective finance committees before the recess.

Thanks to Rhode Island's legislative structure, the fate of the bills depends primarily on legislative leaders, who have the power to determine when — and if — the measures come up for a vote. Both of Simmons' e-mails, which were sent as the legislature was concluding its 2009 session in June, concluded by supplying contact info for Speaker of the House William Murphy, D-Dist. 26, and Senate President Teresa Paiva-Weed, D-Dist. 13.

The debate

After the state eliminated local aid this summer in the face of budget shortfalls caused by the stagnant state economy, Cicilline announced a revised municipal budget that included pay freezes for city employees, withdrawals from a rainy day fund and an increase in property taxes.

It is with that gloomy financial outlook as a backdrop that the new fees have been debated. Cicilline, who is running for re-election to a third term in 2010, first proposed the student tax measure in May.

The student impact fee is calculated to offset the costs of providing police, fire, rescue and other municipal services to students, according to the text of the bill.

Cicilline told The Herald in July that the issue is "a basic principle of fairness."

"I think it is fair for every person who is a member of a community to contribute to the well-being of the community," Cicilline said.

Brown officials, meanwhile, have argued that the school already contributes its fair share to the city.

The University's largest current contribution to the city's coffers is detailed by a memorandum of understanding signed by the city and several schools, including Brown, in 2003.

In both of her summer e-mails, Simmons wrote that the agreement added up to a commitment of $50 million over 20 years to the city.

Simmons challenged the idea that schools should pay for their students' use of municipal services, noting that Brown maintains its own law enforcement and ambulance services.
The city and state also benefit from the "economic engine" of higher education, Quinn said, noting that Brown is the state's seventh largest private employer and that 80 percent of its employees pay income tax in Rhode Island. A report commissioned by Brown earlier this decade estimated that Brown students spent over $40 million in the state during the academic year 2004-05, she said.

Brown's financial commitments to the city also include a planned $10 million fund to benefit local schools, an initiative announced by Simmons in 2007 in response to the school's landmark investigation of its historical ties to slavery.

So far $1.5 million has been raised for the fund, though little has actually been disbursed so far.

Since donations to the school's fund are allotted for specific purposes by donors, it would not be affected by new fees, Quinn said. But, she added, it could be more difficult to raise the additional money needed for the fund in a climate where students are being taxed.

"We understand ... that these are really challenging times" for the city, Quinn said, but they are difficult for schools as well. Rather than imposing fees on schools, she said, the city should be seeking to work together with schools to build a "knowledge economy" to more effectively generate revenue.

Local pols take a stance

While acknowledging the contributions that Brown and other schools make to the city, Council Member Terrence Hassett of Ward 12 urged the General Assembly in an Aug. 6 press release to quickly pass the property fee bill.

"While we do recognize the contributions of the universities and hospitals — both tangible and intangible — much of the revenue they generate goes directly to the state's coffers, bypassing the city altogether," he said in the statement. That the fee would be only up to 25 percent of what other property owners pay is a recognition of these contributions, he said.

Graduate students at Brown have joined with the undergraduate leadership and with other private schools in the city to oppose the student impact fee.

The Graduate Student Council sent a letter to the Providence Journal and a petition to local politicians seeking to defeat the measure, according to its president, Heather Lee GS.
The lone response to their petition, from Senate Majority Leader Daniel Connors, D-Dist. 19, indicated that he thought the fee was a financial necessity, Lee said. Representatives of the council also met with Cicilline, who said financial and other contributions to the community from the campuses do not add up to the kind of money he is seeking from the fees, she said.

Lee said targeting students to generate revenue is unfair.

"Students are portrayed as privileged individuals who do not contribute to the community," she said, which she called an inaccurate characterization. For examp
le, graduate students spend their time and money in a summer enrichment program for local students, she said.
"It discourages us from feeling like there is a collaborative relationship between the city and the state and the student body," Lee said.

At least one local politician has come out against the measure, citing concerns like Lee's. City Council Member John Lombardi, who represents Ward 13, said he was hoping for that kind of collaboration when, in response to the pending measures, he introduced a resolution this summer to create a commission to study ways of raising revenue from tax-exempt institutions.

The "acrimony" of the debate over the current legislative measures between the city and schools made a softer approach necessary, said Lombardi, who added that the proposed student impact fee "sends the wrong message."

With school and hospital representatives on the commission, it could build a consensus, he said.

Although the resolution creating the commission was passed, Lombardi said he doubts the commission will ever be called because of the current political climate and a looming election year.

Barring the emergence of any other compromise solutions, that leaves students and locals to await further action in the legislature.


Powered by SNworks Solutions by The State News
All Content © 2024 The Brown Daily Herald, Inc.