In response to the bill in the Connecticut legislature that would require Yale to spend more of its massive $25 billion endowment on actual education or give some portion of it up to the state, Florida Governor Rick Scott has invited the school to come on down to the Sunshine State where they would agree not to tax its endowment. On the other hand, Connecticut’s Governor Dannel P. Malloy says he is not enthusiastic about the tax proposal anyway, and Yale says it will probably just stay put in New Haven.
For some reason, Governor Scott appears fixated on having Connecticut institutions move south. He spent two summer days in 2015 trying to get businesses to switch states. But, again, these taxation proposals are part of a larger push—mostly by municipalities but also by some states—to revisit property and sales tax exemptions among other things, not exclusively but particularly with regard to large nonprofit institutions.
Adding to the pile-on, in recent months, the Congressional Research Service has been exploring the possibility of taxing the endowments of universities, some of which have been growing to epic proportions. Among the 832 schools that participate in the annual survey performed by the National Association of College and University Business Officers, scrutiny has largely fallen on the 11 percent of schools that hold almost 75 percent of the endowment wealth.
These endowments can be provocative in the face of both local budget concerns and an active national conversation on the cost of higher education…never mind that some of them are heavily invested in such stuff as fossil fuels.—Ruth McCambridge