Contributors
Daniel P. Egan: Privates colleges do their fair share for city
01:00 AM EDT on Monday, June 15, 2009
IN OUTLINING his latest legislative agenda, Providence Mayor David Cicilline argued on this page on May 27 (“A ‘fair-share’ future for Providence”) that “long-term economic recovery . . . will only be accomplished by remaining focused on the basics: creating jobs, maintaining safe communities, improving public education, nurturing arts and cultural opportunities, creating decent and affordable housing and developing a more attractive business climate.”
The mayor called upon independent higher education to be a part of this economic resurgence. What the mayor failed to articulate, however, are the many current contributions that colleges and universities already support and lead. Working with the city, state, the Greater Providence Chamber of Commerce, the Providence Foundation and many others, the members of the Association of Independent Colleges and Universities of Rhode Island (AICU Rhode Island) are taking a strong role in growing the state’s knowledge economy.
Creating jobs: In Rhode Island, education is one of only two sectors where recent job growth has occurred; the other is health care. According to Rhode Island Department of Labor and Training statistics, private higher education has gained jobs every year since 1997, increasing to roughly 23,600 employees (2008) from about 16,800 employees (1997). This growth is a bright spot in a state whose unemployment rate stands at 11.1 percent. A proposed tax on nonprofits threatens to slow this growth at a time when colleges and universities are already threatened by the current economic climate.
Maintaining safe communities: Colleges and universities and their considerable campus security networks improve the neighborhoods around campuses and augment the city’s police force as first responders in many instances. With rent-free leases on community policing sub-stations, colleges and universities have created yet another successful public-private partnership for the safety and good of the entire city.
Improving public education: Partnerships for Success is an ongoing effort to highlight and reproduce successful PK-12 programs across our state. These efforts best represent the education and community missions of our institutions. At Hope High School, in Providence, every institution — public and private — has a direct hand in partnership activities. The work at Brown University’s Annenberg Institute with many of our local school districts and Providence College’s extensive partnership with the mayor’s successful Providence After School Alliance are just the tip of the iceberg when it comes to our direct impact (staffing, students and financial support) on public education.
Nurturing arts and cultural opportunities: In an ongoing series “The 100 Summer Destinations,” the New York Post recently highlighted Providence as a summer destination for New Yorkers. In doing so, the newspaper identified the vibrant art scene around the Rhode Island School of Design (RISD), Brown University and beyond. RISD’s impact on art, along with all institutions’ theater, lectures, conferences and symposiums, are just a sampling of the activities that make colleges and universities the foundation of our state’s creative arts and culture; add to these the culinary influence throughout the Rhode Island hospitality industry by Johnson & Wales University graduates and the cultural impact is deep and widespread.
Developing a more attractive business climate: AICU Rhode Island is working with its many partners to host an October 2009 forum aimed at retaining our best product — our students. This forum will focus on entrepreneurship, mentoring, experiential learning and internships, and connectivity between businesses and the academy. These entrepreneurs are the next economic engine for our state, and we are confident activities such as these will create a framework on how to retain these knowledge workers and the opportunities they represent.
The mayor stated, and we agree, that “we share values based in accountability and fairness, as well as a longstanding, common interest in advancing the well-being of this city.” However, that accountability is now in question. Six years ago, with the city facing a similar deficit (nearly $60 million), colleges and universities agreed to pay our fair share to the city though a memorandum of understanding (MOU). We have now — under a 20-year agreement at the urging of the mayor — voluntarily paid the city more than $15 million during the past five years. Other than the economic crisis affecting all of us, nothing has changed with relation to the city and colleges and universities from 2004 when these voluntary payments began. Changing midstream would be considered by colleges and universities unfair and unjustifiable.
When considering the assessed value of all tax-exempt property, colleges and universities make up 9.6 percent of the assessed property in the city. In 2008 colleges and universities voluntarily paid nearly $5 million in MOU payments, taxes paid on property not used for educational purposes and reimbursement for police, fire and rescue services. Institutions are shouldering their fair share and paying for many, if not all, of the services used by our students — all while honoring the MOU as recognition of our commitment to the city despite our tax-exempt status.
It is also important to note that the economic climate has affected everyone — not only the city. As institutions, we have laid off employees, slashed budgets and pursued cost-cutting measures to keep our focus on lowered costs for students. For students and their families, unemployment and loss of income have hampered many families’ ability to pay. This has resulted in additional financial-aid requests, thereby requiring infusions of dollars to keep students in school. These and many other economic realities (declining endowment earnings, increased federal data-collection costs, increased federal direction on lowering costs, etc.) prevent our ability to give more.
The mayor asserts that colleges and universities currently have no obligation to contribute, yet we contend that we already more than fulfill what we consider to be our moral community obligation. The above sampling of how we contribute supports the current and appropriate payment as defined in the MOU. The mayor’s proposed tax is unjustified and unfair given that higher-education partners pay already and more than adequately embrace the identified steps to economic recovery. Taxing nonprofits runs counter to the goals of promoting sound economic development practices like the knowledge economy initiative. We support building on our partnership activities, rather than creating obstacles to such.
Daniel P. Egan is president of the Association of Independent Colleges and Universities of Rhode Island.
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