Efforts to change Yale’s tax status hit an impasse last week in the Connecticut General Assembly as a bill that would have modified the University’s tax exemption died in committee.
With Yale’s tax exemption on certain properties that earn income of less than $6,000 at stake, leaders of the Planning and Development Committee chose not to bring the measure up for a vote before a key deadline last week. Although supporters of the measure said they would continue their efforts to modify the University’s tax-exempt status, state legislators said any changes were unlikely to pass in the near future.
Craig Miner, ranking member on the Planning and Development Committee, said leaders from both parties on the committee decided to stall the bill’s progress in the face of opposition from several legislators on the panel.
“There was a pretty broad range of concern that Yale was going to be treated differently from some other institutions of its kind,” said Miner, a Republican from Litchfield. “Most of us felt that there has been a good-faith effort through a number of channels by Yale to be a good neighbor.”
Like other Connecticut colleges and universities, Yale’s educational property is exempt from property taxes by state law. But an 1834 provision that covers Yale and three other Connecticut colleges also exempts University properties that serve some commercial purposes, so long as they do not bring in more than $6,000 in income.
While the bill applied only to Yale, State Representative Peter Tercyak, who co-sponsored the failed bill with New Haven State Rep. Toni Walker, said the measure failed largely because legislators were worried about its implications for other colleges and universities in Connecticut. But Tercyak said the bill had earned some support in Hartford, and he expected Yale’s exemption to reemerge as a political issue in future years.
“As long as we have both problems with Connecticut’s tax structure and the built-in inequities we have now, and Yale repeatedly putting itself in the spotlight in negative ways, I expect that this will keep coming up and we’ll make progress,” said Tercyak, a Democrat from New Britain. “If Yale would like to breathe easier, just opposing this issue isn’t the way to do it.”
While supporters of the legislation said it would help solve the fiscal difficulties New Haven has faced in recent years, neither the bill’s proponents nor Yale said they knew how much in additional revenues the measure would have brought the city.
Although Ingalls Rink and the Yale Repertory Theatre might have been impacted by the legislation, the most important properties covered under the 1834 exemption were likely buildings used for private medical care and research, said Antony Dugdale, a researcher with the Connecticut Center for a New Economy. CCNE, a group affiliated with Yale’s unions, had been an outspoken supporter of the legislation, along with several members of the New Haven Board of Aldermen.
But while supporters of the legislation succeeded in initiating a public debate over the exemption in Hartford, Yale Associate Vice President for New Haven and State Affairs Michael Morand said the bill’s quiet demise at the committee level showed that the General Assembly had little interest in targeting Yale.
“It’s always good when the legislature supports New Haven and the partnerships that are moving it forward. The rejection of a bill that singled out one institution sends a positive signal that partnerships are the way to go,” Morand said. “Our strong belief remains that the major nonprofits in New Haven add economic vitality and do not cost the city.”
But State Rep. Robert Megna who supported the measure said the General Assembly still needed to find out what the impact of Yale’s exemptions were on New Haven.
“It’s clear that there is a tremendous benefit for Yale from this special exemption,” said Megna, a Democrat from New Haven. “We hear a lot of P.R. from the insiders … and they talk about all the wonderful financial benefits that either are a direct result of this exemption or a result of Yale being a wonderful organization. If that’s true, we need to have the numbers out on the table.”
Megna said he would meet with Walker to reconsider any further efforts concerning Yale’s tax exemption. Although a provision similar to the failed bill could be added as an amendment on the floor of the House or Senate later this year, Megna said he was not sure whether any legislators would do so this session.