Yale tax status debated by state



A bill that would change Yale’s tax status under state law is likely to be introduced in Hartford within the next month, state and city leaders said Thursday.

The legislation, currently under consideration by the Connecticut General Assembly’s Planning and Development Committee, has not yet been drafted in its final form, although state lawmakers said it would likely call for a modification of an 1834 law that provides a tax exemption for all Yale property earning income less than $6,000 a year.

Supporters of the proposed changes — which are still in the “concept” stage in Hartford — said they hoped a modification of Yale’s tax status would help the city in a time of fiscal difficulties. But Yale officials said the 19th century statute under consideration provides the University with no special privileges, attributing the renewed debate to “political pressure.”

State Rep. Toni Walker, a Democrat from New Haven who has been involved in drafting legislation concerning the exemption, said the city, which may increase property tax rates for the third straight year, needs Yale to pay its “fair share.”

“We have no more money, and we have to look at other ways to raise revenue,” Walker said. “How do you tell the residents in the community that you have raise property taxes, but we’re not going to tax a large corporation like Yale?”

But University Associate Vice President for New Haven and State Affairs Michael Morand ’87 DIV ’93 said since Yale already pays taxes on its commercial properties, the proposed changes to Yale’s tax status would not provide any additional funds for the city. Both Walker and aides in City Hall said they did not know what the financial impact of any legislative changes would be on Yale or New Haven.

“This legislation will impact no properties and add no revenues to New Haven,” Morand said. “As for Yale, our plan is to continue the real partnerships we’ve built to make New Haven stronger, rather than be distracted by the loud few who refuse to give up the Yale-bashing history the vast majority of this community long left behind.”

The special exemption applies to four other Connecticut colleges besides Yale, but the proposed legislation would only affect Yale. The large majority of Yale property used for educational purposes — like the property of almost all Connecticut schools, colleges and universities — has long been considered nontaxable under state law and would not be impacted by the proposed legislation.

Yale and its critics have frequently debated whether certain Yale properties, like Ingalls Rink and the Yale Repertory Theatre, should classify as educational or commercial properties. Supporters of the new legislation said changing what they call Yale’s “super tax-exemption” would allow the city to tax these properties.

The Connecticut Center for a New Economy (CCNE), a nonprofit organization closely allied with Yale’s unions, has frequently called for the University to give a larger contribution to New Haven, and CCNE community organizer Gwen Mills said she expected the group to be active in rallying support for modifying the special exemption.

New Haven Mayor John DeStefano Jr. said Thursday he believed Yale should make a larger voluntary contribution to New Haven, but he said he did not plan on lobbying for any changes in the University’s tax status. Although DeStefano has frequently criticized the state for failing to adequately compensate cities and towns for properties exempted from local taxes, the mayor said he did not think the debate should focus on Yale alone.

“It seems to me that as a matter of equity and policy, it’s not a Yale issue — it’s an issue for major nonprofits in the city,” DeStefano said.

State Rep. Lew Wallace, a Democrat from Danbury who co-heads the Planning and Development Committee, said he was uncertain whether changes to Yale’s tax status would pass, especially since many legislators outside the New Haven delegation were still unfamiliar with the debate surrounding the University’s exemption.

“I think most people don’t know anything about it,” Wallace said. “And I think that’s part of the process of introducing legislation — it’s raising issues and having discussions about it.”

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