fb-pixel Skip to main content

Even with the break they get, top schools still lag on payments in lieu of taxes

In the commentary “Soaring endowments offer colleges a respite” (Page A1, Oct. 19), Larry Edelman highlights the excessive wealth and profits made by the endowments of Harvard, MIT, Boston University, and Boston College. It would have been good had he called for greater accountability.

Under Boston’s payment in lieu of taxes (PILOT) program, colleges and universities and other nonprofit institutions with property valued at more than $15 million are asked to pay 25 percent of what their property tax assessment would be if they were for-profit, of which half is credited for reported community benefits. This formula, developed by a task force under then-Mayor Thomas Menino, is based on the estimated costs of the services these institutions receive.

Advertisement



At the same time the pandemic continually exposed structural racism and economic inequities, Harvard, Boston College, Northeastern, and other schools continue to fall short of the PILOT formula. While Boston University makes most of its requested payment, Harvard, Northeastern, and BC lag far behind.

Boston College, whose endowment climbed $1.2 billion in the past year, did not even bother to report community benefits to Boston and paid only $365,000 of a requested $4.4 million to the city in fiscal 2020. Harvard’s total endowment this past year jumped $11.3 billion to $53.2 billion. In fiscal 2020, Harvard received full community benefit credit but fell nearly $2.8 million short of its requested $6.5 million cash payment.

Clearly, the money is there. So is the need. It’s time to make PILOT work for Boston. This will be an important agenda item for the incoming mayor.

Enid Eckstein

Jamaica Plain

The author is active in the PILOT Action Group, a grass-roots organization advocating for a stronger PILOT program.


State lawmakers’ bill targets billion-dollar endowments to address cost of education, child care

Larry Edelman (“Soaring endowments offer colleges a respite”) highlighted tax-free endowment growth and greater wealth in a “standout investment year for universities,” while many Commonwealth residents are struggling deeply. Public higher education is increasingly out of reach, with 67 percent of student loan borrowers worried about repaying debt, and there is an unprecedented need for affordable child care.

Advertisement



To invest in a more equitable and accessible public education system, we jointly filed a measure that proposes a 2.5 percent tax on private university endowments over $1 billion. The projected revenue, estimated at $1.6 billion, would fund public colleges and universities and early childhood education.

The pandemic disproportionately harmed people of color and low-income residents, including through job losses and a significant decrease in higher-education enrollment. Both higher education and child care access are critical to an equitable recovery for the Massachusetts workforce. Private institutions continue to profit off of tax-free holdings, but a small portion of this wealth could provide opportunities for generations of residents across the Commonwealth.

Representative Christine Barber

Somerville

Representative Natalie Higgins

Leominster

Barber represents the 34th Middlesex District and Higgins the Fourth Worcester District.


Oh, if only Harvard had done better . . .

Larry Summers has taken the Harvard endowment’s investors to task for underperformance (“Harvard advised to examine endowment,” Business, Oct. 16), as well the former Harvard president should. The university barely eked out a 34 percent return on its investments in fiscal 2021, which pales in comparison with, say, Brown, whose endowment grew more than 50 percent. If Harvard had even grown so much as 40 or 45 percent, think of the additional billions of dollars it would now have to fulfill its mission.

Advertisement



Why, just off the top of my head, I can suggest a few ways they could have made strides with the extra cash:

▪ Upgrade meats served in the cafeteria to strictly organic, wild grass-fed beef and free-range chicken.

▪ Build a dome over Harvard Yard so that students can mill about without the annoyance of rain or snow falling on their heads.

▪ Purchase the few remaining properties in Allston the school doesn’t already own for expansion plans.

▪ And, finally, declare that, yes, it is obscene that humongous university endowments are exempt from taxes, and offer to pay appropriate taxes on this year’s apparently meager $11.1 billion gain. Harvard might even hire a high-priced lobbying group to push for this to become policy for all such institutions. As a former treasury secretary, Summers would, I’m sure, approve.

Rick Blum

Bedford