Correction appended.
A report commissioned by the city council has advised that body against renegotiating a 2003 agreement under which the University and other tax-exempt institutions collectively pay the city millions of dollars annually in lieu of property taxes.
The Commission to Study Tax-Exempt Institutions presented its report — which takes into account testimony from the city's four tax-exempt colleges as well as the Women and Infants Hospital and the Hospital Association of Rhode Island — to the city council Nov. 18 after a year of study.
Citing the positive economic impact of tax-exempt institutions, it urges the city council not to reevaluate the current agreement until it expires in 2023.
Beppie Huidekoper, Brown's executive vice president for finance and administration, wrote in an e-mail to The Herald that she considers the commission's report "a balanced and thoughtful review of a complex issue."
The 2003 agreement was negotiated by Mayor David Cicilline '83. Under the terms of the agreement, Providence's four private colleges and universities — Brown, Rhode Island College, the Rhode Island School of Design and Johnson and Wales University — make payments to the city to make up for revenue lost from their property-tax exemptions. The agreement also stipulates that these institutions make regular tax payments on new parcels of land for 15 years after they are purchased.
Between 2005 and 2009, the University has made annual payments between $1.08 million and $1.1 million, according to a Dec. 2009 study appended to the report. It also pays taxes on properties, such as vacant lots, that are not used for the University's core purposes as a nonprofit. The report recommended that the city ensure all such properties — such as those used for faculty housing — are properly taxed.
According to the report, the revenue impact of private, tax-exempt institutions is greater in Providence than in other cities because of its reliance on property taxes and the significant proportion of land occupied by such institutions — 15 percent.
The commission also recommended that the city and state form partnerships with these institutions to create new jobs and stimulate the local economy, a plan the commission refers to as the "Capital City Partnership for Economic Growth." That partnership, in turn, should work with the state government to ensure the voluntary payment program is fully funded, the report says.
The commission further suggests that the city receive some of the anticipated revenue to these institutions from so-called knowledge economy industries as well as the properties made newly available by the relocation of Interstate 195.
"Brown has long been a partner in the progress of Providence and Rhode Island, and we look forward to continuing to do so," wrote Marisa Quinn, vice president for public affairs and University relations, in an e-mail to The Herald.
Due to an editing error, an earlier version of this article incorrectly stated that the University made annual voluntary payments to the city of $291,000-$400,000 from 2005-2009. The Herald regrets the error.
