On Oct. 5, the Providence City Council approved two new voluntary payment agreements between Providence and four nonprofit universities, including Brown. Under these agreements, Brown will pay an average of $8.7 million a year to Providence for the next 20 years, in addition to matching community contributions. This is a significant increase from previous years and will mean more revenue flowing from Brown into the coffers of Providence, a city that has historically struggled with funding and budgetary issues. Paying more money to Providence is the right thing to do, and we’re glad to see University leaders increase their commitment to the city. Specific set-asides for education and climate — areas of particular vulnerability for Providence — suggest the University has targeted valuable subjects for investment.
However, this figure pales in comparison to what Brown theoretically owes the city. If Brown had to pay a standard tax rate on all its properties, it would pay the city $49.3 million a year. Although these lacking agreements have already passed, it’s worth examining the details, reflecting on their implications and discussing how Brown might be better held accountable in the future.
First, some context. The University’s nonprofit status means it does not pay normal taxes on the majority of its properties. Thus, the state uses a system of payments in lieu of taxes, payments funded by the Rhode Island state government, in order to compensate for this lack of tax revenue. These transfers are what are traditionally called PILOTs, although the term is often colloquially applied to the contributions Brown and other schools directly make under agreements with the city. For instance, between a 2003 memorandum of understanding and a 2012 memorandum of agreement, Brown paid $4.5 million to the city this year. The two agreements the city council approved earlier this month increased these payments from Brown while leaving the state’s traditional PILOT payments unchanged. The problem here is that there is a huge discrepancy between what is voluntarily paid by Brown itself and the actual tax money Brown would owe, placing an immense financial burden on the city.
But why should Brown pay Providence more money? The University’s expansion has actively contributed to the gentrification of College Hill — pushing out the Cape Verdean, Portuguese, Irish, Lebanese and other immigrant communities from Fox Point by driving up rental prices in the neighborhood. University payments bolstering the city’s budget could help it support Providence residents burdened by rising housing costs. Providence’s K-12 public schools have historically struggled, in part due to a lack of funding. This could be less of an issue if Brown and other universities did not play such a large role in making 39.3% of Providence’s tax base tax exempt. While the University makes efforts to support the Providence Public School District through projects such as its planned college-readiness program that aims to prepare students to obtain a degree at selective four-year institutions, the University could achieve far more with a simple monetary contribution.
Details of these new agreements make them more complicated. Brown can qualify for reductions in its new payments by assisting in development projects or selling institutional property, which would return it to the tax rolls.
Additionally, with these agreements passed, the city won’t be able to ask for additional voluntary payments or contributions for the next two decades. Brown also acquires four blocks of land, mostly in the Jewelry District, in these agreements. Plus, Providence will also be prohibited from passing legislation to change Brown’s tax-exempt status. This is a particularly meaningful concession because, last spring, members of the Rhode Island General Assembly tried unsuccessfully to pass a bill that would allow cities or towns to impose a 2% tax on college endowments. With these agreements, however, Providence can’t take advantage of legislation like this until 2043.
The new agreements certainly have some wins for Providence. More revenue is undoubtedly a good thing. But Brown, as it often does, has gotten its way with many of the payments’ provisions — and seemingly, a number of opportunities to pay less than the sticker price. Ultimately, although the passage of these agreements represents a missed opportunity, we must ask what we can do about these agreements after they have already passed.
First, we must stay aware of Brown’s role in Providence’s affairs. We have a responsibility as students to demand Brown does what’s best for Providence.
Second, even if the city can’t ask for it, the agreements don’t restrict Brown from contributing more to the city than stipulated, meaning students can still pressure the administration to pay more or increase community contributions beyond what is stipulated in the agreements. While these agreements tie the hands of the city for the next 20 years in many respects, Brown, at any moment, could and should do more for — and give more to — the city that it calls home.
Editorials are written by The Herald’s editorial page board and aim to contribute informed opinions to campus debates while remaining mindful of the group’s past stances. The editorial page board and its views are separate from The Herald’s newsroom and the 133rd Editorial Board, which leads the paper. This editorial was written by the editorial page board’s editors Kate Waisel ’24 and Devan Paul ’24, as well as its members Paulie Malherbe ’26, Alissa Simon ’25, Rachel Thomas ’25 and Yael Wellisch ’25.
