Rhode Island news
Providence seeks student tax at private colleges
01:00 AM EDT on Sunday, May 3, 2009
PROVIDENCE — Students attending the city’s four private colleges and universities may have to pay a $300-a-year tax, under a proposal floated by Mayor David N. Cicilline to generate revenue for the cash-strapped capital city.
Cicilline has been quietly meeting with student-government representatives and university presidents from Brown University, the Rhode Island School of Design, Johnson & Wales University and Providence College to garner support for the proposal, which has generated considerable debate on college campuses.
At Brown University, graduate school students have been discussing the issue on a university online bulletin board so rabidly that network administrators –– not to mention some frustrated users who rely on the board to post notices for mundane things like yard sales and rooms for rent –– have asked for the debate to move elsewhere.
“The overwhelming response is that graduate students are feeling financially stressed. Money is tight everywhere and so this does not come at a good time,” says Heather Lee, president of the Graduate Student Council. “Still others feel that education is a privilege and we can and should take some financial responsibility for what’s going on with the city. But that’s a minority.”
Three of the four institutions have made their opposition known to Cicilline. Brown University has not yet met with the mayor but intends to do so. Student-government representatives from all the universities said they hoped to come to a unified position on the issue.
Cicilline, meanwhile, has support from the City Council, which has long pushed for greater contributions from the city’s universities, colleges and hospitals. “I’m glad the mayor is trying something. The city needs the help so much,” said City Council President Peter S. Mancini.
Providence faces the worst financial crisis since Cicilline took office six years ago, thanks to the double blow of dramatically reduced financing from the state and a steep drop in city revenue as the local economy has slumped.
Now the city must close a $17-million deficit in the fiscal year that ends in June, and city officials estimate that next year’s budget deficit will approach $50 million.
Cicilline, in his two-hour meeting with students in City Hall on April 24, appealed to the “moral obligation” of students, as citizens who benefit from municipal services, to help in the city’s time of need, say students.
While that idea may resonate with some, other university officials and students argue that the tax could be inequitable, and may be unconstitutional.
For graduate students who might own property in the city, or undergraduates whose families reside in the city, it can be a form of double tax since they already pay for city services through their property tax. And students living off campus, it can be argued, are already paying into the property tax through their monthly rent.
Plus not all students have the same ability to pay. Johnson & Wales University spokeswoman Lisa Pelosi notes that 85 percent of the 10,000 students that attend the university are on financial aid.
Students also provide a jolt to the local economy, bolstering the city workforce and spending money in city restaurants and shops.
“Given the city’s financial predicament, I can understand that the mayor is looking for revenue under every rock, but students should be the last people to go to,” says the Rev. Brian J. Shanley, president of Providence College.
The details of Cicilline’s proposal are fuzzy. But students from the four colleges who met with the mayor again on Friday said that the fee would be part of their tuition bill. They also said he will introduce a measure in the General Assembly this week.
Students and university officials say that the tax, which the administration is calling a “student municipal impact fee,” would potentially be a $150 flat tax per semester per student, both graduate and undergraduate alike, at the private institutions.
Cicilline spokeswoman Karen Southern would not comment on the proposal last week. “The mayor is not prepared to discuss his private meeting with students,” said Southern. “The city is dealing with a financial emergency and the mayor is exploring every avenue to identify ways to reduce spending and identify savings.”
It is unclear how the $300-a -year figure was arrived at. Students and university officials say Cicilline did not elaborate on whether there would be exemptions for students with legitimate financial hardships. What the mayor did say was that the proposed tax on the nearly 20,000 full-time students in the city could generate $6 million in revenue a year.
But it would be a major leap if the city imposed the tax: no American city has so far done so, though the idea has been floated elsewhere, including Boston and Chicago, according to Daniel P. Egan, president of the Association of Independent Colleges and Universities.
In Rhode Island, the state legislature considered a bill in 2005 to impose a $200-a-year-tax on full-time college students in all Rhode Island’s public and private institutions.
That proposal, by then-Senate Finance Committee Chairman Stephen Alves, D-West Warwick, was also met with strong opposition from university officials and students, and never became law.
“If this passes, this reverses 100 years of city policy toward universities,” said Lee, the graduate student council president at Brown. “This is monumental and it needs to be researched quite seriously.”
What is clear is that the proposal has stirred up the long-running debate about the responsibilities institutions of higher learning have to their municipalities.
University administrators argue that in a time of soaring costs for higher education and a reeling national economy, raising the expenses for students to attain a college degree is “counterintuitive.” They point to shrinking endowments and cost-cutting measures as reasons against placing an added burden on their infrastructure.
They say that a student tax would have a “chilling” effect on student recruitment, which in turn deprives the city and the state of the students it needs to build a strong knowledge-based economy around. “Three hundred dollars,” says Pelosi, of Johnson & Wales, “can be the difference between coming to Providence and going somewhere else. And that makes everyone worse off.”
The private institutions, which have tax-exempt status in Providence, point to a landmark agreement reached with Cicilline’s administration in 2003 that guarantees $48 million in cash payments to the city over 20 years.
That translates to roughly $2.4 million a year in total revenue for a city that has an operating budget of $641 million this year.
“They say they are paying their fair share, but it’s not fair,” says Mancini, who represents the ward where Providence College is located. “We were really happy to get anything from them then. But they own quite a bit of property in the city that is tax exempt.”
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