On Thursday, Apr. 7, a coalition of activists, students and Providence elected officials signaled support for three key pieces of legislation. The three bills highlighted in Thursday’s press conference were H 7956, H 7813 and S 2600. All three of these bills are intended to let municipalities hold its private colleges and universities financially accountable.
The list of schools include Brown University, Johnson & Wales University, Providence College and the Rhode Island School of Design. Currently all of these colleges are tax-exempt.
State Representative David Morales (D-Dist. 7) is leading the efforts to pass H 7956 and H 7813.
“Across Providence, we are struggling with a gap in quality education. While our private higher-education institutions hold huge fortunes in both income-generating property and endowments, our city lacks the resources to properly support our K-12 students in public schools. Ironically, one reason our city lacks funding is the fact that 40 percent of our land is tax-exempt, largely due to the property ownership of private higher education institutions who have the privilege of being exempt from taxation,” said Morales.
“Given that our thriving higher education institutions are generating enormous amounts of income and have vast wealth and property holdings, they should be fully supporting our community through tax contributions, the same as working people and small businesses. Now is the time we establish standards of accountability and finally require fair investments into our communities.”
Providence Ward 1 City Councilman John Goncalves signaled his support for both pieces of legislation.
“While universities contribute to our municipalities in innumerable ways and we appreciate their local impact, their simultaneous harm is seemingly never quantified: their challenging impacts on quality of life, their strains and demands on limited city services, demolition of historic housing stock, their impact on rising rents and property taxes, and their historical displacement of people who once lived in vibrant long-standing communities, such as Fox Point,” said Goncalves.
On the Senate side, State Senators Tiara Mack (D-Dist. 6) and Sam Bell (D-Dist. 5) are introducing S 2600. S 2600 is the Senate version of what H 7956 will do if it becomes law.
Each of the House bills will do different things if enacted into law. H 7956 would allow Providence to tax all the property owned by these colleges, regardless of if it's used to support the school’s mission. If all the private higher education institutions paid property taxes, it would generate around $89.6 million a year in revenue.
The figure itself is that high since approximately 40 percent of the city’s land is owned by those schools. Currently, Brown University pays Providence $4.4 million a year through a payment in lieu of taxes (PILOT) agreement – $44.6 million less than it could. That PILOT agreement expires in 2023. H 7956 could create a situation in court for Brown University’s case. The university has a charter that dates back to before the founding of the United States.
H 7813 targets Brown University’s endowment that is at almost $7 billion. The bill would let the municipality tax up to 2% of that money, and the revenue is earmarked for supporting their public school district. This legislation in specific has bipartisan support. House Minority Leader Blake Filippi (R-Dist. 36) is a co-sponsor of the bill.
Several candidates seeking office and elected officials, while not speaking, were in attendance to showcase their support for these bills:
Providence Mayoral candidate Gonzalo Cuervo.
Providence Ward 3 candidate Corey Jones.
Providence Ward 4 candidate Justin Roias.
Providence Ward 6 candidate Miguel Sanchez.
And Providence School Board Member Ty’Relle Stephens.
The coalition of support for the bills went beyond elected officials. Direct Action for Rights and Equality, Students for Educational Equity at Brown University and Housing Opportunities for People Everywhere at Brown University joined the legislators.
These bills’ next step are their committees. H 7956 and 7813 head to the House Municipal Government & Housing Committee. S 2600 heads to the Senate Finance Committee. In Rhode Island politics, the House and Senate leadership can essentially shelve pieces of legislation they don’t like. Morales described the conversations with leadership as “ongoing.”
Currently, House Speaker Joseph Shekarchi and Senate President Dominick Ruggerio haven’t given any prejudgements.
“The two bills will have House committee hearings in the near future. In consultation with the sponsor and the committee members, I will review the public testimony that we receive and keep an open mind on both bills as our session moves forward,” said Shekarchi.
“The Senate President would not want to [prejudge] a bill prior to the public hearing process. He will listen to the testimony and consult with the committee chairman once the bill is heard,” said Senate spokesperson Gregg Paré.