Paul L. Caron

Tuesday, June 29, 2010

Town Wants Princeton to Increase Payments in Lieu of Taxes

Princeton Bloomberg, Princeton as ‘Hedge Fund’ Foiling Residents Seeking Tax Share:

Princeton University, the fourth- richest institution of higher education in the U.S., paid more than $10 million last year to its prosperous New Jersey community. Municipal officials and residents say the college should do more.

The university would pay about $28 million in additional property taxes if all of its land were taxed, said Princeton Borough Councilman Kevin Wilkes. The college owns 43% of the borough’s assessed land value and 13% of adjoining Princeton Township’s, Wilkes said. ... 

It’s the latest round in the town-gown faceoff, as U.S. municipalities still reeling from the economic crisis turn to their local universities, whose land holdings are mostly tax-exempt, to close budget shortfalls. Those institutions say they aren’t in a position to help: They are also scrimping to save money through program and job cuts after record endowment declines. Princeton University’s investments lost 24% in the year ended June 30, 2009. The total value of the endowment fell 23% to $12.6 billion, from $16.3 billion the previous year. ...

Just one third of 30 top research universities made regular voluntary payments in lieu of taxes to their cities or towns, according to a Chronicle of Higher Education survey in January.

Tensions in Princeton have been mounting since a standing- room-only meeting in April 2009, called “Why Princeton University Should Pay Its Fair Share of Property Taxes.” About a dozen people booed Kristen Appelget, the university’s director of community and regional affairs, as she spoke about all the college had done for its neighbors, directly or indirectly, said David Goldfarb, a Princeton Borough councilman. ...

“Taxpayers are subsidizing the university,” said Sue Nemeth, a Princeton Township committee member. “The intangible benefits the university offers are lovely but we can’t pave the streets with them.”  Nemeth cites what she calls the generosity of other wealthy Ivy League colleges. Harvard University, which has the largest university endowment in the U.S., made $4.14 million in voluntary payments in lieu of taxes in 2009 to Cambridge and Boston, the two cities where its campuses are located. Yale University, which has the second-largest endowment in higher education in the U.S., increased its annual voluntary payment in lieu of taxes to its hometown, New Haven, Connecticut, to more than $7.5 million in 2009 from $5 million. Princeton University’s financial contributions to the town significantly exceed those of peer institutions when measured as a percentage of the municipal budget. ...

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Cut their garbage service to two cans and once a week.

Posted by: Woody | Jun 29, 2010 5:39:57 PM