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Blue Civil War: Broke Cities Turn to Colleges for Cash


As the money runs low, life in the blue model box is becoming Darwinian: cash-strapped governments are attempting to squeeze traditionally tax-exempt enterprises for revenue. The WSJ reports that Rhode Island Governor Lincoln Chafee signed a bill allowing the town of Smithfield to bill Bryan University for public safety services:

Most states, including Rhode Island, exempt colleges, churches and other federally designated nonprofits from property taxes. But in recent years, communities—most of them in the college-dense Northeast—have increasingly pressured schools to contribute to the public till. After tense negotiations, Providence last year secured millions in additional voluntary payments from Brown University and other colleges. The majority of Ivy League schools now make similar payments to host communities. […]

The legislation allows the town to bill Bryant $250,000 to $350,000 that the town estimates the university uses in police, fire and rescue services annually if the two sides don’t come to an agreement by March.

The law’s supporters claim it is “about fundamental fairness” and is meant to “strike a balanced and fair relationship,” but it’s pretty clear what’s really driving this push for revenue. As pension crises and health care inflation worsen and these states struggle to find the cash to pay for exorbitant costs, local governments are turning to educational, religious, and charitable organizations, whose tax-exempt status suddenly doesn’t seem “fair.”

[Image of Bryant University courtesy of Shutterstock]

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  • rheddles

    It has never seemed fair to me.

    • Corlyss

      Change. Nobody likes it. Esp. if it means more money out the pocket.

  • Philopoemen

    I am confident the university will not increase tuition rates to compensate.

    • Jim__L

      Thanks, I needed a laugh. =)

  • bpuharic

    Perhaps if Wall Street sappers hadn’t blown up our economy, we wouldn’t be facing these choices. Funny how WRM things that, with MILLIONS tossed out of work by Wall Street greed it’s all the fault of the unions.

    The right is rushing so fast and hard to rewrite history I’m worried they may fall and hurt themselves.

    • Corlyss

      “Perhaps if Wall Street sappers hadn’t blown up our economy,”

      More OWS nonsense. And to think . . . you vote. Where were you in 1995 when the MSM began covering the unfunded liabily crisis as if it were the first landing on the moon? Of course, since it was a Republican find, the MSM dropped it almost as soon as they discovered it. But for one brief shining moment, they covered the issue responsibly and in depth.

      • bpuharic

        As I said, the right is RUSHING to rewrite history. Notice he’s now denying the credit squeeze caused by the market meltdown? Notice how the right is now so hysterical about protecting Wall Street they’re denying there WAS a meltdown?

        The recession did not happen in 1995. It happened in 2007.

        • Nick Bidler

          >The recession did not happen in 1995. It happened in 2007.

          Correct! However, the policies that acted as a precursor had been in place for two decades before 2007, and were expanded by a significant margin over the course of the Clinton and Bush years.

          I could also point out that Texas had next to nothing happen during the 2007 credit crunch, because the state did not force banks to loan to unqualified borrowers.

          • bpuharic

            Wrong as usual. TX banks were subject to more regulation than was common in other states. Ironic, isn’t it?

            And bad mortgages had little to do with the banking crisis no matter what Rush (PBUH) says about all those horrible black people who got loans

            It was white Wall Street bankers who ran credit default swaps up by


            that’s correct. That’s not a typo. In 10 years, Wall Street ramped up CDS’s by twenty THOUSAND percent

            But the right worships Wall Street and thinks if you can blame it on blacks, go for it.

          • Nick Bidler

            These things are not mutually exclusive. Texas banks were more heavily regulated than the national average… and did not loan money to people who could not pay it back.

            Also, I don’t blame blacks for trying to defraud banks any more than I blame the banks for trying to bilk totally innocent poor people out of their cash.

            If you think either side of this conflict is innocent of wrongdoing, I’ve got some student debt I’d like to sell you.

          • bpuharic

            Not paying back the mortgages was not the problem. Credit default swaps..Wall Street greed….was.

            You blame blacks because that’s what the right does

            I blame Wall Street because that’s what the evidence shows.

          • Nick Bidler

            Well my previous post was meant to smear both sides, but I guess people can’t read satire on the internet.

            And since this is getting nowhere fast, let us start from square one and define terms: define ‘credit default swaps,’ and let us see if our definitions match.

      • f1b0nacc1

        Don’t feed the trolls…this one is way past rational argument…

        • Corlyss

          I know. My eye accidentally fell on his silliness and I haven’t had my breakfast yet. I need better discipline . . .

        • Pete


        • Fred

          I agree, but b. leads with the chin so obviously and obnoxiously, it’s hard not to punch him in it.

          • f1b0nacc1

            I understand your point, but after a while, it is simply pointless. This one wastes way too much time, and simply isn’t worth it. Regurgitating talking points isn’t debate, it is simply splenetics, and tends to clog up the works.

          • bpuharic

            The right wing has been regurgitating supply side economics for 30 years. And for 30 years it’s failed.

            You were saying.

  • Corlyss

    Brown University
    Berkeley East. It figures.

  • Jim__L

    Once MOOCs catch on, this will be trying to get blood from a stone.

    Tax exemptions are an admission on the part of government that there are some transactions that they have no business participating in. A person’s income is, first and foremost, the property of that person, and not simply allowed to that person on sufferance.

    Apparently Blue wants to make it a crime to think that the first share of first fruits belongs to God, not government.

    I wonder how many people are going to turn against Blue as it becomes clear that Blue zealously believes that all the money in the country rightly belongs to the government?

    • Pete

      The parasites, of which we have an abundance, won’t turn against Blue as Blue is the trough they feed from.

      • bpuharic

        Perhaps we should just continue to let the right bail out the rich with TARP, push through programs like the recent farm bill, with subsidies for billionaires while slashing programs for the poor.

        That’s what America’s all about, right?

  • Fat_Man

    I think we need to revisit the whole idea of tax exempt entities as a matter of public policy. We need to ask if any institution is so worthy that it ought to be exempt from the burdens that all citizens must share. Does Harvard really need a $30 Billion endowment that earns 15% tax free year after year while they charge students a small fortune for tuition? Do we need to have hospitals using their substantial tax free profits to take over the entire health care system in this country?

    The recent hullabaloo about the IRS serves only to underscore how fraught with complication and possibilities of abuse the current system of tax exemptions is.

    I recall a meeting of the tax department of a Wall Street law firm, I was in as a young lawyer almost 40 years ago. One of the lawyers in the meeting laid out a very complicated scheme to create a tax exempt entity to promote a client’s business. The chairman of the Department a perspicacious lawyer looked at him and said: “Fred: one of two things is true. Either it will make money, in which case it cannot be a non profit, or it it will not make money, in which case it won’t pay taxes.” The meeting then moved on to the next topic.

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