Bill seeks more financial data from private colleges
Massachusetts private colleges and universities would have to file more in-depth financial reports and disclosures under a bill scheduled to be filed today by two state legislators.
The legislation, sponsored by Senator Patricia D. Jehlen of Somerville and Representative Michael J. Moran of Brighton, both Democrats, would require schools with investments or property valued at more than $10 million to list and disclose the value of those assets. They also would be required to calculate and report annually the benefits they receive from tax exemptions.
The legislators said the bill is meant to promote transparency, following endowment losses at Harvard University and most other schools during the financial crisis. While investment portfolios rebounded in the past year, a poor showing in 2009 at Harvard led to layoffs and a halt to a massive campus expansion in Allston.
Moran, whose district includes the Allston area where Harvard has stopped building, said he’s not convinced that the nation’s wealthiest university should be exempt from property taxes in the same way that a small charity might be treated. “I don’t think they should live by the same rules,’’ he said. Harvard’s endowment currently has about $27.4 billion in assets.
Colleges and universities already make annual disclosures in federal tax filings and with the Massachusetts attorney general’s office regarding their finances and highest-paid employees and vendors. The new law would make it mandatory for them to list all employees earning over $250,000 a year and any contracts larger than $150,000. The institutions also would have to provide greater disclosure on potential conflicts of interest on their boards.
The bill was based in part on a report last year that criticized Harvard, Dartmouth College, and other schools for taking on what it called too much investment risk. The resulting losses hurt their communities, according to the report issued by the Center for Social Philanthropy in Boston and partially paid for by the Service Employees International Union. The union lobbied for the proposed new law.
At the time of the report, schools defended their investment practices. Harvard yesterday said it was waiting to review the bill.
Beth Healy can be reached at email@example.com.