Public Interests, Private Institutions? Public Policy Challenges to Tax-Free Universities

21 Pages Posted: 2 Oct 2019

Date Written: June 2, 2017

Abstract

As the increasing concentration of wealth and property in private universities draws attention and criticism, legislators across political parties and jurisdictions are questioning the scope of broad university tax exemptions. Universities have responded by asserting that state and federal constitutional provisions offer their assets perpetual protection from taxation — assets that not only include classrooms and dormitories, but also golf courses, power plants, travel agencies, and health clinics.

In response to these arguments, this Essay proposes ways in which states and localities could clarify or challenge sweeping property tax exemptions for private universities, with a special focus on Yale University’s charter and Connecticut state law. The Essay argues that by either clarifying the boundaries of Yale’s property tax exemption or freezing it in place, the Connecticut legislature could — and should — reclaim the state’s fundamental power of taxation and gain leverage for negotiations with Yale, without running afoul of constitutional requirements. The Essay closes with a brief discussion of other universities and communities that could utilize an analogous approach.

Suggested Citation

Hilke, Wally and Jain, Amit, Public Interests, Private Institutions? Public Policy Challenges to Tax-Free Universities (June 2, 2017). Yale Law Journal, Vol. 127, No. Forum, 2017, Available at SSRN: https://ssrn.com/abstract=3457831

Wally Hilke

Independent ( email )

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