RI City Vs. Brown In Latest Town-Gown Money Clash

Ann McClure's picture

When Providence Mayor Angel Taveras recently warned that Rhode Island's capital could run out of cash by June and face bankruptcy, he singled out the city's largest employer and one of its most prestigious institutions -- Brown University -- for what he called a failure to sacrifice.

The Ivy League school, which as a nonprofit enjoys tax-exempt status, makes voluntary payments of a few million dollars a year to the city under an earlier agreement. But Taveras maintains the university should give more at a time when city taxes have gone up, services have been cut, schools have been closed -- and he trimmed his own salary by 10 percent.

"Our taxpayers already subsidize the tax-exempt institutions in this city," Taveras declared at a news conference at City Hall, noting that some residents saw their taxes hiked nearly 13 percent last year. "It takes the revenue collected from 19,000 taxpayers like the one I just mentioned to account for the $38 million in property taxes not paid by Brown University."

Struggling U.S. cities are increasingly looking to private universities and other tax-exempts for cash to cover what they would otherwise fork over in property taxes on valuable parcels. That has sometimes created strained relations with those institutions, which defend their special status by saying they bring jobs, generate economic activity and offer critical services in education and health care.

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