Standing in the President’s Room of Woolsey Hall Wednesday morning, President Peter Salovey reminisced darkly on his experience of the “old days” of town-gown conflict between Yale and New Haven in previous decades.
“I never want to go back to those days,” Salovey lamented to a crowd of Yale officials, local business leaders and reporters.
Yale has alleged that a new state bill aimed at the University’s property taxes will damage relations between not only the University and its home city, but also between Yale and the state of Connecticut. In a new effort to defeat S.B. 414, University officials have cast the school as not merely an institution of higher learning, but also as an economic powerhouse in both New Haven and Connecticut.
At a press conference Wednesday morning, Yale administrators, legal counsel, local entrepreneurs and other community leaders gathered to decry the bill as “bad policy” under the roof of Woolsey Hall, one of the many properties Yale claims will be adversely affected by S.B. 414. Speakers highlighted the economic ramifications of S.B. 414 for both Yale’s home city and state, putting aside previous arguments made by the University that the bill is unconstitutional due to Yale’s right to nontaxation as established in its charter and would target academic property. Currently awaiting debate on the Senate floor, S.B. 414 would curtail entrepreneurial investment, especially in the biotech industry, across the state, according to Salovey and Vice President for New Haven and State Affairs and Campus Development Bruce Alexander ’65.
S.B. 414, which proponents say will clarify current law regarding taxable private college property, would allow the state to tax University properties which generate $6,000 or more in annual income. The bill affects private Connecticut universities and colleges with real estate valued at $2 billion or more, effectively singling out Yale.
President of the Greater New Haven Chamber of Commerce Anthony Rescigno cited on Wednesday the recent relocation of General Electric from Fairfield to Boston as “the tip of the iceberg,” suggesting the state legislature could drive Yale and economic growth away from Connecticut in a similar fashion.
That same analogy to GE’s departure was made by state Rep. Laura Devlin, R-Fairfield, in a March 22 public hearing, where the state’s finance committee heard arguments on both S.B. 414 and the accompanying S.B. 413, a bill which sought to tax Yale’s $25.6 billion endowment that later died in committee.
Raised in the midst of a state budget crisis, S.B. 413 would have yielded $78 million in income to the state, according state Rep. Toni Walker, D-New Haven. Neither Yale nor the state have ascertained the total fiscal impact of S.B. 414.
While the bills’ proponents — including New Haven’s state delegation, the Board of Alders and national union coalition UNITE HERE — said at the March 22 hearing that the bills would encourage Yale to invest more in the state’s technology sector and higher education, Associate Vice President for Federal Relations Richard Jacob cautioned the finance committee against what he described as “unprecedented, ambiguous and sweeping” bills in his written testimony.
At the hearing, Jacob pointed to the irony of support for the two tax bills and testimony heard that day for S.B. 1, proposed legislation aimed at spurring entrepreneurship and growing jobs across the state — as if replicating what Yale has done in New Haven, Jacob said.
The University has argued that S.B. 414 would allow for the taxation of academic buildings such as the Yale Center for Genome Analysis and Ingalls Rink, as well as Payne Whitney Gymnasium and possibly the laboratories of faculty members who have launched successful startups.
A number of representatives from local startups and tech companies, many of which began from University research or initiatives, stood on Yale’s side Wednesday at the press conference, including Alexion, Achillion and Ancera.
Salovey cited the tax-exempt status of other schools who pioneer similar tech initiatives, such as the Massachusetts Institute of Technology and Harvard University, as another reason against why Yale should not be subject to the bill.
Tim Shannon, a general partner at Canaan Partners and former startup CEO of Alexion, said that a “clear breakpoint” exists between academic research and biotechnology or pharmaceutical research, rebutting a point proponents have made that the bill would clarify the hazy zone between the two.
New Haven acting city assessor Alex Pullen told the News that the University informs the assessor’s office each year of which of its properties Yale considers taxable and which should be tax-exempt. Pullen added that his office is usually in agreement with Yale’s tax judgements on its properties. He said that there was “truly no way to know” what the fiscal effect of S.B. 414 would be, as the proposed clarifying statute would still be open to interpretation by municipal tax assessors.
Alexander also noted that legislators were working to add an amendment to the bill that exclude athletic centers and performance venues like Woolsey Hall from being taxed.
State Senate President Martin Looney, D-New Haven, said in a statement that he was “surprised at the continued level of alarm that Yale would raise on Senate Bill 414 given that the amendment to be adopted that would replace the original bill should allay Yale’s concerns.”
“The purpose of the bill is to update for current times an exemption that was created long before the world of technology transfer of academic research to commercial purposes was ever contemplated,” Looney said. “This bill would establish, in Connecticut, the same standard under which major research universities like Stanford in California and MIT in Massachusetts already operate.”
Lemar, who has previously defended the bill and referred to Yale’s objections as “scare tactics,” declined to comment on the bill until it is up for debate in the state House of Representatives.
Earlier this week, a group of 11 law professors, several of whom teach at or are otherwise affiliated with Yale, signed a letter to Looney and state House Speaker Brendan Sharkey, D-Hamden, saying the bill was indeed constitutional.
Yale paid $4.5 million in property taxes to the city this fiscal year, alongside a voluntary payment of $8.2 million.