Dive Transient:
- New York lawmakers unveiled a legislative proposal Tuesday that would finish a property tax exemption for personal nonprofit universities that had greater than $100 million written off within the prior fiscal 12 months.
- Simply two universities can be affected — New York College and Columbia College. Columbia is the most important personal land-holder in New York Metropolis and would have paid $179 million in property taxes final 12 months with out the exemption, in response to the invoice’s sponsors. NYU would have paid $142 million.
- Beneath the plan, the ensuing property tax income would go to the Metropolis College of New York, town’s public larger schooling system that has confronted budgetary challenges.
Dive Perception:
Columbia and NYU have lengthy been two of the nation’s wealthiest universities. However their tax standing drew public consideration in September, when The Hechinger Report printed an in-depth evaluation of the centuries-old regulation granting them property tax immunity.
The brand new proposal — launched by state Sen. John Liu and Meeting Member Zohran Mamdani — would rescind that exemption.
Nonetheless, the Democratic lawmakers would wish to achieve and preserve constant assist for his or her proposal, because the tax exemption is enshrined in New York’s state structure.
To take away the exemption, the lawmakers must go a invoice amending the state’s structure in two consecutive legislative classes. The state would then maintain a referendum on the change.
If the referendum handed, lawmakers may vote on a second invoice to institute the $100 million yearly cutoff for the exemption and redirect the ensuing property tax income to CUNY.
The exemption was initially established to assist small nonprofits, Liu mentioned in a press release Tuesday. However he argued the carveout should be reconsidered, as giant universities that would simply pay property taxes at the moment are benefiting from it.
“It makes excellent sense to direct these subsidies as an alternative to public schooling right here in New York,” he mentioned.
The pair’s proposal comes as “CUNY faces finances lower after finances lower and is in a relentless state of disrepair,” Mamdani mentioned in a press release Tuesday. Solely 8% of CUNY buildings are thought-about to be in good restore, in response to his workplace.
Within the 2023 fiscal 12 months, town of New York lowered CUNY’s funding by $155 million, costing 235 school and workers positions, in response to a Might evaluation from town comptroller’s workplace. Inconsistent authorities funding, compounded with unstable tuition income and elevated inflation, have put the system’s funds at critical threat, it discovered.
The evaluation suggested town to reinstate CUNY’s funding to assist the system “stay the world class academic, analysis, and workforce improvement establishment that New Yorkers want and deserve.”
Comptroller Brad Lander voiced assist for CUNY and the laws Tuesday.
The system is “going through repeated patterns of disinvestment and critical monetary challenges whereas a few of the Metropolis’s wealthiest personal establishments broaden their campuses’ tax-free footprints,” Lander mentioned in a press release. Liu and Mamdani’s proposal would steadiness these inequities and create a extra democratic larger schooling atmosphere for town, he mentioned.
In emailed statements Tuesday, each Columbia and NYU emphasised their contributions to New York Metropolis’s financial and philanthropic improvement.
“We’re reviewing the laws however will underscore that we’re a world-class analysis college and, past the monetary assets we offer to our local people,” mentioned Samantha Slater, a Columbia spokesperson. She added that Columbia has lengthy served as one of many main financial drivers of town.
NYU didn’t hunt down the property tax exemption, which was enacted previous to its founding, mentioned John Beckman, a college spokesperson.
“To decide on two charitable, non-profit organizations out of the 1000’s within the state and compel them to be handled like for-profit entities definitely strikes us as misguided and unfair,” Beckman mentioned.
NYU already pays round $15 million yearly in metropolis property taxes, the spokesperson mentioned. This consists of on areas it owns and leases out separate from its tutorial mission, in addition to property taxes related to areas it leases.
“Had been NYU immediately taxed on its property, it will be terribly disruptive, not solely to our intensive operations, however to the now well-established mechanisms of assist that NYU offers to each stage of New York authorities,” Beckman mentioned.
