Housing Complex

Universities Run Preemptive Defense Against Cash-Strapped D.C. Government

George Washington's new Science and Engineering Complex, which won't generate property taxes.

If you're a university sitting on lots of land in the District that isn't taxed by virtue of your status as a non-profit institution, you'd be right to get worried: The Council is on the prowl for more revenue sources, and with the federal government not about to start paying property taxes anytime soon, higher education has a target on its head. In fact, Councilmember Mary Cheh is already threatening to make D.C.'s universities pay up, following in the footsteps of cities like Chicago and Boston.

On Thursday, the Consortium of Universities of the Washington Metropolitan Area will hit back with a study by our old friend Stephen Fuller that documents how many dollars and jobs the region's educational institutions funnel into the region's economy. According to the advance release, the Consortium's 14 members—11 of which are located in D.C.—employ 200,000 people who earn $3 billion collectively every year, and bring down $21 billion in federal funding for research and development. Their students, 63 percent of whom moved to the Washington area to attend school, apparently contribute 600,000 hours of community service every year as well.

I don't think anyone doubts that universities are a positive influence on the District's fiscal health, base of employment, intellectual life, and cultural vibrance. But should that be enough to keep them off the tax rolls? If it prevents them from outsourcing operations to surrounding jurisdictions, as they've already been doing—and which is also tempting because of the advantage of having voting representatives in Congress—then perhaps the answer is yes. But you do have to ask whether they're inherently more worthy than a small business that also provides jobs and may help communities as much if not more.

Comments

  1. #1

    Lydia,

    The Comprehensive Plan, which OP and GU's neighbors cited at one of the campus plan hearings, pretty much explicitly states that DC universities are supposed to create satellite campuses outside of DC, because land inside the District is too valuable to be taken up by non-taxable entities. So the purpose of tax-exempt status can't be to keep them from doing so...

    There are two basic questions.

    1. Should non-profits be exempt from (some or all) taxes? 2. If yes, are non-profit universities really non-profits of the sort that we want to exempt, or are they materially different from other non-profits?

    We tax lots of "beneficial" and "productive" things - that's not the argument. It is whether education is, like charity, advocacy, and other non-profit status fields, something that we want to especially privilege.

  2. #2

    My ideal scenario would be to tax them at the same rate as private businesses (or at least as close to it as you can get), but rather than doing it as a revenue-generating measure, I'd like to see the extra revenue raised used to lower property taxes across the board. Mainstream libertarians/Republicans have had a lot of really shitty ideas, but the idea of "broad base, low rates" taxation is a very good one.

  3. #3

    Isn't this basically a dead issue at this point? The Council just passed the budget, and revenues will likely start climbing upward from this point on -- without a tax on universities.

  4. #4

    I don't think anyone doubts that universities are a positive influence on the District's fiscal health, base of employment, intellectual life, and cultural vibrance.

    I dunno, I feel like you could find a few people in the AU/CUA/GWU/GU "anti" camps who would say that the schools are nothing but a nuisance, and provide nothing positive. Some of them seem that nutty.

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