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Jake Heimark '10: An unfair burden

Itinerant Brunonians are welcomed back to Providence this fall with a slap in the face — a proposed $300-per-student tax for out-of-state students who attend private colleges in Rhode Island. The message from City Hall is clear: students at Brown, RISD, Providence College and Johnson and Wales are an unfair burden on the city and state. Our institutions' contributions fall short of expenses.

Mayor David Cicilline '83 first proposed the "student impact fee" earlier this year, claiming that students consume city services and should therefore pay a fair share of the taxes required to support those services. The bill is currently being debated in the General Assembly.

At first glance, Cicilline's argument has some merit.  After all, students do consume city resources, and the money to fund them must come from somewhere. Brown's operating budget dwarfs those of most Rhode Island companies, but as a nonprofit, our "income" is not taxed. Our campus is in one of the nicest areas of Providence, with the highest real estate taxes, but we are exempt from those as well.

Nevertheless, the proposed "student impact fee" is shortsighted and characteristic of the type of poor decisions that led Providence to its budget crisis in the first place.

It is not hard to see why out-of-state students were targeted for taxation. Unlike raising the city's property or income taxes, levying a tax on large, non-profit academic institutions is both politically convenient and easy to manage. Most students do not vote in Rhode Island; only a small minority comes from the state. As far as the city is concerned, we are visitors with pockets deep enough to pay large tuition fees, but who use city resources without contributing to the tax base. With the city's deficit approaching $17 million, universities have become an easy target.

But the legislation as it stands may be unconstitutional. In cases of uneven taxation, the burden of proof lies on the municipality to show that the targeted group has a disproportionate effect on resources. Providence has not shown that non-resident students represent an economic burden. Any extra burden to local hospitals, which are privately owned, is more than offset by the contribution of Brown's medical school and the fact that all Brown students are insured. We own and operate our own police force. We pay for our resources just as Providence residents do.

Institutions granted federal non-profit status shouldn't be a casualty of bankrupt cities' attempts to close their budget gap. Universities have long held non-profit, tax-exempt status, presumably because higher education is deemed a substantial benefit to the community and to society as a whole. Reneging on the contract that grants universities tax-exempt status is not only unfair; it is bad economic policy. It alienates students, faculty and staff, and discourages us from getting more involved in the community.

Other cities have made vicious threats about taxing non-profits such as schools, usually as a means to extract "voluntary" donations in times of budgetary distress. A "student impact fee" is essentially the same threat aimed at students rather than institutions. Taxing out-of-state students is a cowardly, backdoor attempt to remove universities' non-profit status and shrink the city's deficit without cutting back services or taxing constituents. It is no different than granting a church tax-exempt status and then charging pastors a "church member impact fee."

Sincere attempts to fix the budget deficit should focus on keeping Brown, RISD, Providence College and Johnson and Wales students in Providence. The benefits of persuading even a small percentage of Brown students to live, work and pay income taxes in Providence after graduation would far outweigh the $300 per head proposed by the city. Treating students as taxable vagrants instead of equal members of the Providence community is a step in the wrong direction.

Our contribution to the city we live in could and should be more. Some students spend four years on College Hill and never travel beyond Thayer Street, but many actively engage with the city in positive ways. Legislators have not heard our voices and do not recognize our contributions. Students already engaging in the community should make their actions known, to help our leaders realize that we are tutors, Girl Scout leaders, soccer coaches and mentors to Providence's youth. Soon we may be members of the city's professional class. Our presence is valuable. Private universities are and should remain tax-exempt because we are a benefit, not a burden, to the city.

Rhode Island has the second highest unemployment rate in the nation, exceeded only by the home state of GM and Chrysler. With myopic, anticompetitive policies that target students — is it any wonder?


Jake Heimark '10, an economics and human biology concentrator, has a Rhode Island driver's license.




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