Yale’s OId Campus at dusk
Listening to some of the speakers at the Martin Luther King Day memorial service in New Haven last week, anyone might have thought that Yale University is why the city has so many poor people. Connecticut State Treasurer Shawn T. Wooden was especially overwrought. According to the New Haven Independent, Wooden asked: "Is it fair for a city as poor as New Haven to give a $146 million tax break to institutions as wealthy as Yale University and Yale New Haven Hospital?"
But New Haven doesn't provide that tax break. It's state law that exempts charitable, religious and nonprofit educational institutions such as Yale and its hospital from municipal property taxes. If Wooden, a Democrat, ever dares do more than preach to the choir, he could raise this issue with the governor, also a Democrat, and the General Assembly, which has a comfortable Democratic majority. Yale may be the biggest nonprofit in Connecticut but it's not the only one, and they all enjoy the exemption.
Yes, with an endowment of $30 billion, Yale is a filthy rich nonprofit. The joke is that Yale is a hedge fund masquerading as a university. But Yale is not why New Haven has so many poor people. The university and its hospital provide most of the better-paying private-sector jobs in the city and most of its commerce, cultural life, and appeal to the rest of the world. Without the university New Haven might blow away or be indistinguishable from Bridgeport, which might kill for a "problem" like Yale.
No, New Haven has so many poor people for the same reasons Connecticut's other cities do. The cities have much cheap housing, state welfare policy produces generational dependence instead of self-sufficiency, and state education policy fails to educate the unmotivated, instead keeping them unmotivated with social promotion.
But Yale does pose a special problem for New Haven, just as being the seat of state government poses a special problem for Hartford. Along with ordinary tax-exempt property like churches, university property in New Haven and state government property in Hartford are so extensive as to remove from the tax rolls half the land area of the cities.
While both cities are heavily subsidized by state government, Hartford gets far more. It gets not only the many state government jobs located there but also state payments in lieu of taxes as well as the benefit of state government's outrageous recent assumption of $500 million of the city's bonded debt, whereby state government essentially reimbursed the city for the $80 million baseball stadium it couldn't afford but built anyway as it neared bankruptcy.
By comparison Yale's annual $12 million voluntary payment to New Haven in lieu of taxes is pitifully small.
Speaking in New Haven last week, Treasurer Wooden, the former leader of Hartford's City Council, a stadium advocate, and a perpetrator of the city's insolvency, failed to acknowledge this unfairness.
With $30 billion in its accounts, Yale could afford to make a much larger annual payment to New Haven, which was a pillar of the platform of the city's new mayor, Justin Elicker, in his campaign last year. Indeed, the General Assembly should consider reducing the property tax exemption of any institution that controls such a disproportionate amount of a municipality's land area.
Not that this would improve New Haven much. For unless Elicker can change things, most of the extra money would be used only to increase compensation for employees of the city's incompetent and sometimes corrupt government
Chris Powell is a columnist for the Journal Inquirer, in Manchester, Conn.
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