David Cicilline's Student Tax and Nonprofit Tax Will Fail
Just when I thought my opinion of David Cicilline couldn't get any lower, it manages to fall further. House Majority leader Gordon Fox and Senator Maryellen Goodwin will be sponsoring two bills to raise revenue from nonprofit organizations. The first is a plan to impose a $150 tax on student who attend private colleges or universities. The second bill would require nonprofit organizations with property valued at more than $20 million dollars to pay 25% percent of the taxes they would have paid if the property weren't exempt.
The student tax has changed a bit. It started out as a tax on students, but now it appears it will be paid by the schools, which can then pass it on to the students through their tuition. It's rather obvious that colleges and universities will just add this into the tuition bill, but David Cicilline doesn't care, he just wants more money under his control.
The second bill would require private colleges, universities and hospitals to pay up to 25% of the taxes they would pay if they weren't exempt. The article specifically mentions schools and hospitals, but I would think that religious organizations would also be affected since the bill was written for nonprofits. I'm sure the Diocese's downtown real estate alone is worth more than $20 million. Are they also included? Who knows. All we do know is that David Cicilline's latest legislative caper could result in an additional $16 million for him to squander.
David Cicilline likes to talk about the services used by the colleges and universities, and when he does, he makes it seem like they sponge off the city. This is an ignorant way of thinking. If you don't believe me, just look at the East Side, which is one of the nicest neighborhoods in the region. The East Side probably generates a lot of tax revenue, since the residential and commercial real estate is so valuable. Why is it so valuable? Could it be because of all the students and employees from Brown University and the Rhode Island School of Design who live in the area, shop in the stores, and eat in the restaurants? What about students and professors from other schools who frequent the area? Don't Miriam Hospital and Butler also contribute to the neighborhood?
Now, let's think of the East SIde a little differently. Let's pretend that Brown, RISD, Miriam, and Butler moved out of Providence. Businesses wouldn't have as many customers and many would close, reducing commercial real estate values. There would be a huge number of empty apartments and houses, which would drive down rents and home values. What kind of impact do you think that would have on Providence's tax base? It would be decimated! The schools and hospitals don't pay property taxes directly, but they certainly help the tax base in other ways.
Fortunately, neither of these bills will pass. First, I don't see enough representatives and senators supporting Cicilline's plan. Second, if it does pass, it will likely be vetoed by Don Carcieri who had this to say:
"The cost of higher education is already out of reach for many families, and assessing them a $300 yearly fee only exacerbates the burden. This is an ill-conceived move to try to fix the city's budget shortfall by taxing college families.
"There are significant issues of fairness in singling out the private higher education institutions," he continued. "These institutions bring in thousands of out-of-state students to the capital city, and are a major economic generator. To effectively impose a city tax on them is bad policy. As governor, I cannot support such an initiative."
I hope David Cicilline has a back-up plan, because these two bills aren't going anywhere. By the way, has anyone ever told him that he can actually cut spending, rather than just raising taxes?




Comments