It seems nowadays that Americans have something of a penchant (or, perhaps more descriptively, an insatiable desire) for populist-style villainization of anything successful. Tea Party or Occupy, Republican or Democrat, such polarities appear to be en vogue today to dole out emotional rhetoric attacking those in power as by nature immoral, undesirable, or inequitable in comparison to the “average, hard-working American,” regardless of possible merits for their individual success. Of course, always the critical conspiracy theorists, Brown students have a soft spot for these politically charged and often baseless accusations. However, in an ironic twist of fate, Brown has recently found itself as the receiver rather than giver of populist, class-warfare-style attack — specifically due to its tax-exempt status as a not-for-profit institution of Providence.
Of course, even the anti-populist must not disregard a criticism simply because it is populist in nature. Sometimes — some would argue even oftentimes — a populist argument may ultimately prove to have its merits in attacking an unfair practice of our society’s status quo. And so we owe it to those attacking Brown to look at their claims as we should any other political issue: analytically and as objectively as possible. Here’s the argument: In Providence’s current economic crisis, Brown, as much a part of Providence as much as its home-owning citizens or local fire department employees, should increase its monetary contributions to the city, especially considering the real estate tax breaks it receives. This appears to be a benign request, at least on its face.
Unfortunately, this request is oftentimes muddled by emotionally charged political rhetoric — claims by Providence Firefighters Local 799 Vice President Philip Fiore that Brown’s tax-exempt status is “disgusting” and an “injustice” or insistence by Brown Tara Kane Prendergast ‘12.5 that Brown should “pay its fair share.” Brown is not spared biased criticism from Mayor Angel Taveras either, who claimed that taxpayers “subsidize” Brown — connoting that taxpayer money goes to the institution when, of course, this is not the situation. What has gained national controversy is not simply Providence’s near-bankruptcy, but the singling out of Brown as its culprit. By its very nature, political rhetoric such as that mentioned above is subjective and, as is often the case, a mere opinion.
And so, here are some facts about our disgusting, unfair, selfish institution:
FACT: Brown pays $2.5 million in voluntary payments annually to Providence.
FACT: Brown pays $1.5 million in property taxes annually to Providence.
FACT: Brown pays $2.1 million in fees annually to Providence.
FACT: Brown provides Rhode Island with 8,200 jobs.
FACT: Brown contributes nearly $600 million to Rhode Island’s economic output.
FACT: Brown has recently contributed $250,000 in grants to Providence public schools.
FACT: Brown grants over $4.1 million in scholarships and financial aid to Rhode Island students.
Of course, these figures do not capture the entire picture of Brown’s contributions to its city because it neglects priceless intangibles. Add to these figures worldwide recognition, immeasurable economic activity, infrastructure investments, community engagement and activism, and human capital. We must also include specifics like the employment and economic activity created by alumni living in the city, students who volunteer in Rhode Island schools and food banks, or research and expertise spurred by the Knowledge District.
A few other facts should be noted. For one, Brown holds an infinitesimal portion of Providence’s tax-exempt land, which is spread between various nonprofits like private schools and hospitals. Yet the national attention (and accompanying resentment) has been targeted nearly exclusively at Brown. Of course, it is not very difficult to reason why Brown has been singled out, given the lens of populist anger.
Yet there is another, more nuanced defense for Brown’s hesitation to provide voluntary funding, one that failed to reach the media hype of other explanations. It all comes down to the fundamental reason why there exist certain institutions that are tax-exempt. These not-for-profit institutions exist solely for the benefit of the community or even, in Brown’s case, society in general. They exist to serve their central mission statement and do notmake a profit from which taxes can easily be extracted. Any funds that are funneled away from Brown will work towards the University’s detriment and limit its ability to reach its upmost potential in its noble goal of academic enrichment. This is especially true given the context of the budget deficit debate. Because Brown is a nonprofit, it puts every cent it receives towards upholding its mission statement. On the contrary, any dollar that goes towards the city can be used for any purpose, even if this purpose contradicts Brown’s mission statement.
Specifically, reports have recently brought attention towards the inordinate amount of pensions paid to public workers, many of which funnel away the city’s funds towards retirement in the Sunshine State. Reports have even indicated that Providence pays $1 million to out-of-state pension recipients every single month. Last year alone, reports indicate that the almost $14 million left the state in pension money, which does not even include health benefits. According to other reports, pension recipients have received double or even triple the amount of money per year in pension plans than they actually made on the job.
Not only are these statistics mind-bogglingly ridiculous, but it flies in the face of logic that a nonprofit with a mission of academic enrichment should dole out precious funds towards out of state pension plans. Is that “fair,” to borrow some political rhetoric?
A solution that I endorse is that Brown would contribute funds to the city but on the condition that Brown has a say in how it is used and applied. This arrangement would allow Brown to expand its mission statement by contributing toward policies it supports, such as Providence’s flailing public education system. Assuming this proposal gains any traction, we will see how Providence and Brown’s opponents deal with this apparent loophole to their requests.
In a statement on the issue, Mayor Taveras said the following: “I do not believe that Brown should solve our problems, but I do believe that Brown should be part of the solution.” I support this position wholeheartedly. However, a blank check signed by the University is not a part of the solution — it is simply a Band-Aid on the budget and a bow to the unsubstantiated criticisms of Brown. Being part of the solution means being an active, appreciated member of the city, upholding true standards of fairness and responsibility.