Providence
Providence to study getting revenue from tax-exempt institutions
07:06 AM EDT on Friday, July 3, 2009
PROVIDENCE — As state lawmakers consider legislation that would give cities and towns the power to tax private colleges and hospitals, the City Council is stepping up its focus on the city’s largest nonprofit institutions.
The City Council on Thursday agreed to establish a commission to study tax-exempt institutions. Councilman John J. Lombardi, D-Ward 13, who sponsored the resolution, says the goal is to come up with a uniform plan for collecting compensation for city services.
Lombardi says the new panel is modeled on a 2003 council commission to study tax-exempt institutions. Shortly after the formation of that commission, Mayor David N. Cicilline signed a landmark compensation agreement with the city’s four private universities that gives the city $48 million over 20 years. Local hospitals were not parties to the agreement.
“2003 may not have been the proper time for this, but I think we have a stronger base of support today because of what’s happening at the Assembly,” said Lombardi. “There is a willingness and a wherewithal to adopt these things now and it’s very important to be proactive.”
A proposal to assess a “student impact fee” on private colleges and universities is currently before the House of Representatives, and another proposal is pending before a House committee.
The impact-fee legislation, sponsored by House Majority Leader Gordon D. Fox, a Providence Democrat, was approved by the House Finance Committee last week, but never made it to a full House vote, as the legislature broke for an indefinite recess early Saturday morning.
Another bill would authorize municipalities to collect a fee in lieu of taxes from nonprofit entities that own properties assessed at $20 million or more. That proposed fee has not yet been voted on by the House Finance Committee.
The Providence commission also follows close on the heels of Boston Mayor Thomas M. Menino’s formation of a commission focusing his city’s numerous tax-exempt institutions. Many nonprofit entities there already have agreed to make payments in lieu of taxes, but the size of those annual payments vary greatly.
Much like the Menino’s commission, the council commission will include members from the business community, tax-exempt institutions, community organizations, labor unions, as well as two council members and a mayoral appointee.
It’s an effort to generate some consensus on the issue, said Lombardi. “Everybody has a stake in this. I believe nonprofits are willing to be a part of the process. You can’t just have things imposed unilaterally. That’s not how you negotiate,” he said.
A member of the business community will chair the commission, which will have a 180-day timeline in which to make recommendations to the council.
The commission joins a growing list of council study commissions of late, including ones now looking to the city dog pound, the Providence External Review Authority, and the city’s archives.
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