Argh! Tax Exempt Status For 9 Massachusetts Colleges With Billion Dollar Endowments
The dirty little secret is out: private foundations, which receive a tax exemption, are required to spend 5% of their endowment yearly, but 9 Massachusetts colleges with endowments that exceed one BILLION dollars face no such requirement. They are: Amherst, BC, BU, Harvard, MIT, Smith, Tufts, Wellesley, and Williams.
With these huge fortunes just sitting there earning vast amounts of interest daily, these are colleges which, on a student's appeal for more financial aid, will respond by saying that there are "not enough funds available." When it comes to discussing finances, these colleges have no credibility as their public remarks boggle the mind.
Here's an example:
Boston College justified raising its tuition last year on the basis that their employee health care costs and energy costs were rising. To add insult to the injury of increasing tuition costs, a BC official was quoted in a Boston Globe article: "Excellence is an expensive proposition." Not to be outdone in the elitism department, when the president of BC, Rev. William Leahy, was asked about the school's BILLION dollar endowment, and if it would mean rising tuitions would stop at BC, his response was: "A billion dollars is a great deal of money, but it by no means eliminates all the pressure."
Pressure? The Boston Globe reported that BC was able to outbid for a purchase of real estate near its campus for nearly 100 million dollars "with cash up front." That's how BC defines pressure - having to bid with 100 million dollars in cash up front. I'm probably naive for suggesting this, but maybe their tax exemption is helping to relieve some of that pressure. Do you think?
Derek Bok, former president of Harvard, said in a recent book: "Universities share one characteristic with compulsive gamblers and exiled royalty: there is never enough money to satisfy their desires."
Members of the Massachusetts legislature are now considering eliminating the tax exemption. They're looking to impose a paltry 2.5% tax, half of what private foundations are required to pay. But my guess is that these colleges are not worried. They won't even bother sending their lobbyists to protest the proposed tax. If it happens, the colleges will do what you can
already predict: raise tutions and fees.
With good intentions mixed with lots of pandering, Massachusetts politicians will likely enact this tax and parents who send their kids to these schools will pay more.
Now you know why such colleges as these don't care what you think about what they charge. As long as the demand to get into these schools far exceeds the supply of seats, colleges will continue to corner the market on arrogance, or, biting the hands that feed them.
AfterThought: Harvard is attempting to be the exception: students whose parents make less than $60,000 a year get free tuition. But how many exceptionally bright students who meet Harvard's requirements come from homes earning less than $60,000 a year? Not surprisingly Harvard doesn't say. Could it be that Harvard's own press releases want us all to think that it doesn't want any child left behind? My cynicism must be showing....
Article Title : Argh! Tax Exempt Status For 9 Massachusetts Colleges With Billion Dollar Endowments
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