I come from Jesup, a small town in southeast Georgia. It is a big deal for me to attend Yale. When I go home, people I don’t even know stop me in the grocery store or at the movies and tell me that they are proud of me. And I am proud to represent Jesup, because for all its flaws, it is my home, and I love it. I hoped I would feel the same way about my university; I envisioned a warm and fuzzy feeling of community. There are many things here that I am proud to be a part of, just like Jesup. But like Jesup and its small-mindedness, in some areas, Yale falls a little short of perfect.
I was at the State of the City address given by Mayor DeStefano on Feb. 2, and among the many issues that he touched on, the importance of who pays taxes in this city was one that seemed to warrant attention. What I learned has put the issue into sharp relief. This may seem to be a dry issue and not worth getting my panties in a wad over, but just look at these numbers:
Yale only pays $4 million a year in taxes to the city of New Haven because it is a non-profit institution, and as such, is almost completely tax exempt. This exception is over 100 years old. To compensate cities with large non-profits for the taxes that they lose, the state has a Payment In Lieu Of Taxes (PILOT) program. According to a report published by the Connecticut Center for a New Economy, this program is supposed to reimburse cities for 77 percent of the money lost. However, because of budgetary shortfalls, the state no longer has the money to pay such a large percentage. For example, in 2001 Yale’s property was valued around one billion dollars. Under taxable ownership, that property would have been taxed $37.3 million. However, the PILOT program only paid New Haven $23.8 million, or 63.9 percent of the money that Yale is exempt from paying. This created a shortage of over $11.5 million in the city’s budget.
Yale could easily afford to make up the difference that the state cannot afford to pay. The University has an $11 billion endowment that could help solve this problem. One day’s interest alone is millions of dollars. A few days of Yale’s unearned incremental income could make up the difference in the budget and pay for much-needed city services. For added perspective, New Haven has a debt of $3.7 million, mere pocket change for the University but a staggering number that forces the city to choose which services to cut and which jobs to save. The city is in dire need. Two hundred public employers were laid off last year because the city could not afford to pay them. Ten of Connecticut’s 28 “priority schools,” ranked as such because of poor performance, are in New Haven. The city is doing all it can to improve performance, but it is hard to do so on a deficit.
Asking Yale to pay its fair share of the tax burden is not even a groundbreaking or original idea. According to Harvard Magazine, in 2002, Harvard made a deal with Watertown stating that Harvard will pay about $480 million over 52 years. Harvard made this deal to compensate Watertown for the tax revenue lost when Harvard bought 30 acres of the town’s land. The town loses money because Harvard has tax exempt status similar to that of Yale’s.
The idea that Yale should pay more taxes to New Haven is not about exploiting the University for every last dime. It is about Yale paying what it owes the city. I want to go to a university that values fairness and true civic partnership. I am proud to be from Jesup, and I want to be proud of Yale.
If you are interested in this issue, or any other that touches on Yale’s place in the world and our place at Yale, there are house meetings at every college tonight to discuss graduate student unions, diversity in the academy, Yale’s fair share, and many other important topics. Check your college for specific times.