Higher college payments to city sought
Councilor says fees don’t cover cost of services
Councilor Stephen J. Murphy is asking the city to boost the payments that local private colleges and universities make to Boston in lieu of taxes, saying the institutions are paying too little for the municipal services their students use.
His legislation, set for a public hearing in the fall, would require the city’s nonprofit colleges to pay $100 per semester for each of their students without a permanent Boston residence. The estimated $16 million to $20 million collected from the fee would help the city finance police, fire, and other public services, as the city finds itself strapped for cash, Murphy said in a phone interview yesterday.
The fee “is not something we want to take out of the pockets of students; it’s something we want to see coming from the universities,’’ Murphy said. “Universities can take [the cost] out of their endowment funds. The financial statements of these institutions show they all have healthy bank accounts. Their endowments are growing.’’
Currently, local colleges and other nonprofits do not pay property taxes but make voluntary payments to their host city to offset their use of municipal services, under what are known as payments in lieu of taxes. In one recent year, for example, Boston received $1.8 million from Harvard, $261,000 from Boston College, and $141,000 from Northeastern.
Colleges and universities have resisted paying taxes, saying the institutions play a crucial role as engines for economic growth. Some universities’ endowments have fallen by as the much as 30 percent since the subprime mortgage meltdown, making the proposed fee a tall order.
“Student and colleges are already shouldering the burden of the downturn in the economy,’’ said Richard J. Doherty, president of the Association of Independent Colleges and Universities in Massachusetts.
To think that the fee would not be passed on to students already saddled by student loans and hit by job cutbacks, is silly, said Doherty, who called Murphy’s legislation “well intentioned but unfortunate.’’
Dot Joyce, a spokeswoman for Mayor Thomas M. Menino, raised concern about Murphy’s idea, saying the city would not have the authority to impose the proposed new charge. . However, the mayor has established a city task force to recommend an equitable formula for the amount universities and colleges should pay for the city services students use, Joyce said.
City Council President Michael P. Ross said he is aware of the contributions students make to the city, but said he supports the effort to determine the cost of resources the city provides to students and what their institutions should pay.
