Brown's expansion on and off College Hill has been met with some resistance from the city of Providence, especially as the state capital teeters on the brink of an economic meltdown. Currently faced with what Mayor Angel Taveras has characterized as an unprecedented financial crisis, the Rhode Island state legislature entertained a proposal in May to levy property taxes on nonprofit institutions such as private universities and hospitals.
The bill, proposed by Rep. John Carnevale, D-Providence and Johnston, would allow communities to tax nonprofits up to 25 percent of what they would pay if they were not tax-exempt. Upon introduction of his bill, Carnevale specifically targeted Brown, telling the legislature that the University "is literally gobbling up whole city blocks," according to the Providence Journal. Brown's physical footprint has nearly doubled in the last 20 years, the Journal reported.
Beginning in 2003, Brown has contributed to the city in the form of voluntary payments in lieu of taxes. These contributions are intended to "be a steady stream of funding for the city that would enable growth of the nonprofit sector," and will contribute $50 million to the city over 20 years, said Marisa Quinn, vice president of public affairs and University relations.
But since 2003, the city's financial situation has become more precarious. Taveras, who took office in January, has stated he is willing to keep all options for bringing in revenue on the table, according to an April 28 article in The Herald.
A number of other universities make voluntary payments to their home cities. Princeton makes payments equaling about $1.7 million to the Borough and Township of Princeton, according to a May 11 article in the New York Times. But when local officials tried to stop a major university building project, university officials suggested that they would have to rethink the voluntary payments.
In Boston, where tax-exempt property takes up more than half the land, Mayor Thomas Menino has sent requests to the city's largest nonprofits asking them to begin making annual payments that would rise to 25 percent of the tax value on their property.
In Rhode Island, the two sides have yet to reach an agreement. "We have told Mayor Taveras that we understand the difficult situation," Quinn said. "There are ways for colleges and universities to engage with the city and state that … will provide for long-term growth."
"But efforts to tax universities are simply counterproductive," she added.
Taveras has called the proposed bill key to closing the city's $110 million budget deficit. But the University remains reluctant to entertain discussion of the bill.
"There's a question of whether or not this is even constitutional," Quinn said, adding that nonprofit status is protected at a state and federal level.
Carnevale's bill has been held for further study by the House Finance Committee since May 11.
