At $25.6 billion, Yale University’s endowment ranks second only to its rival in Cambridge, Massachusetts and Connecticut lawmakers are considering a bill that would tax unspent earnings of a university endowment greater than $10 billion.
“Yale, of course, is unique in Connecticut in terms of the resources it has,” State Senator Martin Looney (D-New Haven) said. “It is a major taxpayer, but it also owns a lot of tax-exempt property and has seen huge gains in its endowment over the years.”
While Yale is the only school in Connecticut that would qualify, Sen. Looney said the goal is to encourage Yale to do more to stimulate the state’s economy.
“We’d be pleased if the bill didn’t even result in an additional penny of tax revenue,” he said. “If it did spur that additional spending in investment out of that very large endowment.”
A Wall Street Journal opinion piece argued that if passed, this legislation would set a terrible precedent.
“The state is in a deficit and I feel they need to tax this business as well,” Brelin Patterson ,of New Haven, said.
Patterson said he thinks Yale should pay more taxes like small businesses, but the money shouldn’t come from its endowment.
“If they’re not going to tax community businesses and churches for any donations, I don’t feel that they should tax Yale for their donations,” Patterson said.
NBC Connecticut reached out several times to Yale’s Public Affairs Office, but did not receive a response.
Part of the school’s endowment does fund financial aid that allows students from families earning less than $65,000 to attend the school for free.
Just yesterday, Florida Governor Rick Scott, a Republican, invited Yale to move to the Sunshine State because of this proposal.
State lawmakers are considering a second bill to re-write regulations for taxing university properties. http://www.nbcconnecticut.com/news/local/New-Haven-Officials-Back-Bill-to-Update-Tax-Law-for-Universities-372173022.html.
Gov. Dannel Malloy, a Democrat, has pledged no new taxes as the state deals with the budget deficit.