Providence is in pretty deep. With deficit estimates hovering around $180 million over the next two years, this cannot be denied. From firing all Providence teachers and closing four schools to giving Mayor Taveras a 10 percent pay cut, our city leaders are making tough decisions.
Amidst the budgetary equivalent of Armageddon, a familiar old devil named "Tax Brown" has returned to terrorize us.
Every couple years, it seems, a bill is introduced to tax the University in some way, and every time, we protest wildly until the measure is withdrawn. This is by no means a new phenomenon — in fact, this struggle is as old as Brown itself. In the original charter of 1764, our founders asserted that, like colleges and universities elsewhere in the world, Brown's property and the University community — including the president, students and faculty — should be "freed and exempted from all taxes."
Ever since, these claims have been contested. As early as 1774, prominent voices in Providence were calling on Brown to pay town taxes. During the Civil War, Providence residents, who were frustrated about having to pay high taxes while wealthy professors and administrators continued to enjoy their exemption, spoke out again. This time the University agreed to taxes on all professors with property worth more than $10,000.
This is how things have remained ever since. Students, faculty, staff and administrators pay taxes on their earnings, their purchases and the properties they own as individuals. But the University's land holdings remain essentially tax-free.
To put forward an argument about whether or not the University should pay taxes, it is important to fully examine the context of the Charter's assertion of tax exemption. In the same passage, the Charter also says that given their particular status as men of intellect, students, faculty and administrators should be exempted from jury duty, military service and "menial services."
Reading the document, it is immediately apparent that these assumptions and this language came from men who did not question inequality, even if they may have professed to hold Enlightenment values. As a community of men devoted to the higher calling of scholarship, the intent of the authors was clearly for the University to exist as a community apart from the lowly business of the city.
Do we still believe this? I hope not.
To be fair, the opponents of taxes on Brown probably do not subscribe to all the beliefs of the founders either. Generally, they argue that the Brown community already contributes to the city as a source of employment, business and bright, young service-oriented students. Though other taxed organizations in the city also provide employment and business — as does the city government to which the taxes go — and the contribution of Brown volunteerism is debated, these arguments have prevailed in the past.
The basic logic of exempting certain institutions from taxation makes sense given the assumption that, as non-profits, the income saved from taxation is used to serve the common good beyond the efforts of the government. Tax-exempt institutions do not gain an unfair privilege over taxed ones because they operate on this different model.
In the case of the University and many — if not all — of its peers, these assumptions are flawed. Brown profits from renting out its tax-free properties to private businesses like Hemenway's Restaurant. Furthermore, several branches of the University operate on profit-based models, including the Office of Continuing Education and the Investment Office — the latter admits considering social responsibility as an afterthought to the strategies it believes will maximize profit. Brown clearly uses its tax-exempt status to its advantage in pursuing profits, even if its resources ultimately go toward the common good.
Regardless of whether or not one accepts these arguments as reasons to question the University's tax-exemption, it is important for all of us to realize the current desperate reality of our city. The last time the Brown community was faced with the prospect of a tax was 2009, when then-Mayor and current Rep. David Cicilline '83, D-RI, proposed a student head tax of $300 a year on the grounds that out-of-state students at private colleges and universities in Providence enjoy city services without paying for them. At the time, the city was faced with a budget deficit of a mere $17 million.
What we are looking at now is about 10 times that amount. Accordingly, a bill in the state legislature is now calling for a property tax on non-profit organizations including hospitals and private colleges and universities.
While tax-exempt institutions clearly have a place in our society, there are certainly reasons to debate Brown's traditional place among them. To invoke an appropriate metaphor for the Ocean State — on a sinking ship, everyone picks up a bucket.
Ian Trupin '13 is a prospective COE and Africana Studies concentrator who believes strongly in building coalitions.
