Jay Gonzalez, the Democratic nominee for governor of Massachusetts, has proposed levying taxes on major universities’ endowments—including that of Boston College—in order to raise the revenue for improvements to transportation and education, according to The Boston Globe.
The plan would impose a 1.6 percent tax on endowments of any private, nonprofit college or university in Massachusetts that has a fund of more than $1 billion according to the Globe. The list of schools that fit this criteria include Harvard University, the Massachusetts Institute of Technology, Boston College, Wellesley College, Smith College, Boston University, Amherst College, Tufts University, and Williams College.
“Donations from alumni and parents, coupled with excellent fiscal governance at Boston College, has enabled the University to build an endowment that supports our financial aid offerings for students and the academic and formational programs and services that make the BC educational experience so meaningful,” University Spokesman Jack Dunn said in an email to The Heights. “The proposal to tax endowments would hurt all of these efforts, and would put Massachusetts colleges and universities at a competitive disadvantage with peer institutions in other states.”
Gonzalez has said he believes it is a fair way to raise the funds for transportation facilities requiring repair, following a report released by the MBTA that said 57 percent of stations and parking facilities require repairs. Additionally, Gonzalez said the money collected from increased taxes could be funneled into early childhood, K-12, and public higher education.
Many university officials across Massachusetts, however, have rejected the proposal. Nearly 50 officials from colleges across the state contributed to a joint article sent to top congressional officials, expressing that endowments support critical operations for universities, according to the Globe.
“The Association of Independent Colleges and Universities in Massachusetts (AICUM) is fundamentally opposed to the notion of taxing non-profit private college and university endowments to raise revenue,” Richard Doherty, ACIUM president, said in a press release. “Taxing endowments is bad for students, bad for our economy, and bad for Massachusetts.”
The release went into detail about how much money is created within the state’s economy by its universities. Close to 150,000 residents are educated, with more than $608 million given in aid to students. The AICUM claims most of that money is coming from endowment funds. 100,000 Mass. residents are employed by colleges that pay $9 billion in salaries, according to the release. In terms of research funds, $2.5 billion in federal funding sponsored university research is awarded each year, according to the release.
The major colleges and universities, all nonprofits, “have accumulated huge wealth as a result of exemption from taxation,” Gonzalez said. “We need them to step up and help out and help make sure we’ve got an economy that’s working for everyone.”
Featured Image by Jonathan Ye / Heights Staff
Update (9/18/18, 3:30 p.m.): This article has been updated to include the press release, alongside quotes and featured statistics from it.