Essential Facts and Numbers that need to be commonly known and understood by us all
Institutions like Cornell currently have no legal obligation to pay anything to their home communities. Many institutions, and more every day, believe that they have a social obligation to pay their fair share and that their privileged tax-exempt status needs to be updated, and adjusted for the realities of the times.
There is a movement afoot around this issue. Communities with large tax-exempt footprints are rising up against the burden they create. It’s happening in college towns all over the US.
The burden and the movement are not myths. Big universities have enjoyed their tax-free status for more than 50 years. The 1969 Tax Reform Act created universities' tax-exempt status by developing Section 501(c)3 of the Internal Revenue Service (IRS) Code: to support public goods such as education and philanthropy. But when educational institutions activities are in fact for-profit under the umbrella of non-profit it's time for change. And change is coming.
If you’re going to look at facts and numbers, these are worth looking at.
- Cornell owns $2.7 billion worth of city property. Almost all of it is tax free.
- Cornell pays $96,307 in city taxes on the few parcels that aren’t tax-exempt which means we are collecting 0.3% what would be $33M in property taxes.
- Cornell’s total tax bill is $2.8M – some goes to Cayuga Heights, Town of Ithaca and Tompkins County.
60% of the city’s property is tax exempt. We fund services with property taxes.
Cornell’s $2.7B worth = 46% of it.
Cornell gave the Ithaca City School District $650,000 this year.
Cornell is spending $715,000 on Slope Day in May 2024.
Property taxes are also how we fund education. The gap in the school budget based on property pulled out of the equation being tax exempt is $46M this year.
The school tax is the biggest chunk of our taxes.
I encourage you to let the Superintendent and School Board know that settling for $650,000 is not acceptable. Cornell cannot recruit the faculty they want without a top-notch school system. UPenn recently pledged $100M to the Philadelphia school system.
Cornell’s offer on the table is currently $4M annually for 21 years.
Two of Cornell’s top earners had a 2022 combined salary of $3.8M
Cornell’s endowment equals $10.5B.
The combined Ivy League endowment is projected to top $1TRILLION in 25 years.
Cornell’s endowment grew from $7.2B to 10B in 2021. Zero taxes were paid on the gains.
Yes, endowment funds are largely restricted in their use but not all of them.
Cornell’s operating budget is $5.5B.
The city budget is $90M.
The city budget = 1.6% of Cornell’s operating budget.
Cornell posted a $37.7M profit from royalties in 2022. $117M revenue over 5 years.
And is engaged in billions of dollars worth of activity. Their start-ups raised $1.9B, they own hundreds of licenses and options. Technology innovation is bringing them millions of dollars. It’s about commercialization, innovation, bringing new advances to the marketplace, etc.
The commercialization of technology that research institutions are engaged in is what the Princeton lawsuit was based on and what is making these institutions vulnerable to losing a privileged tax exemption status.
https://paw.princeton.edu/
https://www.princeton.edu/
Margherita Fabrizio Fair Share Campaign |
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