Yale decries tax bill as unconstitutional

A bill before the Connecticut General Assembly that would tax Yale’s academic buildings is unconstitutional, say Yale officials.

“Yale is urging the General Assembly to reject SB 414,” said Rich Jacob, associate vice president for federal and state relations. “Yale is also making clear that SB 414 violates the U.S. and the Connecticut Constitution, and Yale is prepared to defend its constitutional right of non-taxation.”

The bill — which specifically targets Yale — seeks to extend property taxes to academic properties, such as the Center for Genome Analysis, Payne Whitney Gymnasium, the Yale Repertory Theatre, and other buildings used daily by students and faculty.

“Most worrisome, proponents of SB 414 wish to tax the research buildings that house the faculty whose discoveries help launch biotech companies that grow beyond campus and generate jobs and taxes for New Haven,” said Jacob.

Yale currently pays  $4.5 million in property taxes annually on its commercial, nonacademic properties, such as the stores on Broadway — making it one of the biggest taxpayers in New Haven. The university also makes voluntary payments to the city, currently $8.5 million annually, a number that has been increasing as the student body and workforce grow. In addition, Yale has invested more than $28 million to date in the Yale Home Buyer Program, and co-founded and funds the Promise scholarship program for New Haven public high school graduates, among many other investments in the well being of the city, noted Jacob.

“In Yale’s view, this bill misses the point,” said Jacob. “Connecticut needs to grow its economy, and the partnership between New Haven and Yale shows that investing in education, neighborhoods, and research creates jobs. Taxing Yale won’t create jobs.”

In addition, “the bill would make Connecticut the first state in the country to tax academic property of a nonprofit university,” Jacob said. “Furthermore, while the bill targets just Yale, its proponents have said other cities would also like to begin taxing academic property of other non-profit universities in Connecticut.” Three leading associations representing all of the nation’s nonprofit universities have expressed serious concern about this departure from bedrock policy toward charities.

Other nonprofit organizations — including Trinity College, Fairfield University, the Chamber of Commerce, United Way, the Association of American Universities, the American Council on Education, and the National Association of Independent Colleges and Universities — have joined in opposition “as they recognize these bills threaten independent higher education generally and pose a threat to Connecticut’s ability to attract partners for economic growth,” said Jacob.

Those who share these concerns should reach out to their state representative and senator, said Jacob. Those who are unsure of their state legislators can search for them here.

A proposed bill that would have taxed Yale’s endowment was not voted out of the General Assembly’s finance committee.