In 2017, the University undertook a massive fundraising campaign to remove financial barriers to accessing a Brown education. The Brown Promise initiative raised enough money to eliminate loans from undergraduate financial aid packages starting in the 2018-2019 school year. This is a fantastic step toward ensuring that students from middle-income homes can graduate without being saddled with student debt.
As our campus community reflects on the importance of access to education, it would serve us well to look outside of the bounds of College Hill. Earlier this year, members of the board of the Providence Public School District raised concerns about looming budget shortfalls. State funding increases will begin to level off over the next five years, and board members are not optimistic about the prospect of funding increases from the city due to budget constraints. PPSD is looking for ways to tighten its belt, attempting to slash expenditures in order to avoid a $3.7 million deficit in 2019 that is projected to balloon to $37 million by 2023. The cuts will hurt, but right now they seem inevitable.
As PPSD works to decrease their spending, we ought to consider ways to increase their funding.
The University is a 501(c)(3) nonprofit — a status that confers substantial financial advantages. A 2015 report by Providence’s Internal Auditor showed that in 2015, the University owned over 150 tax-exempt buildings. Taken together, their valuation was a little over a billion dollars. Commercial property in Providence is taxed at 3.67 percent of its valuation. Based on these figures, it seems that Brown avoids paying roughly $37.8 million to the city of Providence each year due to its tax-exempt status. This number will increase yearly as Brown’s new property purchases are slowly removed from the tax rolls over a 15-year phase-out period. (It is worth emphasizing that not all of Brown’s properties are tax-exempt. In 2015, 23 of Brown’s 193 buildings were 100 percent on the tax rolls.)
Instead of paying property taxes on exempt buildings, Brown makes payments to the city of Providence through a PILOT — payment in lieu of taxes — program. In a 2003 agreement, Brown agreed to pay a total of $24.6 million to the city of Providence over a 20-year period. This number has grown over the years, with Brown making several additional agreements with the city. Between 2004 and 2007, Brown paid the city an additional $1.3 million. And when Providence faced bankruptcy in 2012, Brown agreed to pay the city an extra $31.5 million over 11 years.
All told, this still means that Brown pays a fraction of what its taxes would be if it weren’t a nonprofit.
The University certainly benefits financially from its nonprofit status. And so it should — Brown is a cutting-edge research institution that adds substantially to the Providence landscape. But at the same time, Brown is a member of the Providence community, and this means that we have responsibilities. The University is a tremendously wealthy institution that sits on valuable land in Providence’s East Side. We benefit from policies that allow us to avoid paying property taxes on the majority of University buildings. We occupy land that would otherwise be a valuable stream of tax revenue for the city of Providence.
Brown swiftly raised $30 million from alums for the Brown Promise initiative. Perhaps it’s time for another promise — one that demonstrates a commitment to quality education access for young people in Providence. As an institution dedicated to higher learning, Brown has a role to play in making sure that every student in Providence, regardless of means, can access a quality public school education. As PPSD stares down a budget shortfall, we should seriously consider the ways Brown might wield its financial power for the good of our neighbors. Brown increasing its payments to Providence won’t solve all of PPSD’s budget problems, but we can and should be part of the solution.
It might seem appealing to assert the claim that Brown isn’t obligated to do any of this. After all, we’re a 501(c)(3) with tax exemptions, we already make PILOTs and we’ve contributed to the character of the city since 1764. But we’re part of the fabric of Providence, which means that Providence’s interests are, to a large extent, our interests. Students across the nation deserve to attend adequately funded schools, but it would be especially egregious for students in the city to go without resources while the University up the hill works toward completing its $120 million financial aid fundraising project. As we renew our commitment to the accessibility of quality education, it’s our job to make sure we’re also looking beyond our gates.
Ruth Foster ’19 can be reached at ruth_foster@brown.edu. Please send responses to this opinion to letters@browndailyherald.com and op-eds to opinions@browndailyherald.com.
