FATAL $UBTRACTION:
How State-Mandated Property Tax Exemptions
Subsidize New York City Private Education at the
Expense of Public Schools and CUNY
By
Bonnie Brower
Rachel Hays
A City Project Policy Paper
April 2006
www.cityproject.org • (718) 442-4490 • (347) 689-3241 • bbrower@si.rr.com
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CREDITS
This report was researched and written by Bonnie Brower, Executive Director of City Project, and
Rachel Hays, Associate Director. The bulk of the data pertaining to the Fiscal Year 2005 status of
properties owned by not-for-profit educational institutions was obtained and provided by the New
York City Independent Budget Office (IBO) at City Project’s request. This report would not have
been possible without this data, or without the generous additional assistance given by George
Sweeting, IBO Deputy Director. We are also indebted to the efforts of the staff of State Senator
Liz Krueger, particularly Chief of Staff Brad Usher, for their work in accessing and providing to us
all manner of relevant state legislative and gubernatorial archival material. Staff of the New York
City Department of Finance was also helpful in providing answers to specific questions about the
department’s record keeping.
Funding support for this report was generously provided by the Valentine Perry Snyder Fund, the
North Star Fund, the Fund for the City of New York, and the New York Community Trust, as well
as many organizational and individual supporters of City Project.
City Project alone is fully responsible for the analyses, conclusions and recommendations
contained in this report.
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Contents
Executive Summary
i
Introduction
Property Tax Burdens
Unfunded Mandates and Non-Discretionary Expenses
The Special Need to Re-Evaluate Private Educational Property Tax Exemptions
PART I: The New York City Property Tax and Tax Exemptions
Real Estate Taxes: New York City’s Fiscal Lifeblood
The Thriving Underworld of New York City Property Tax Exemptions
Tax Expenditures: A Fiscal Oxymoron
An Out-of-Date, Out-of-Control State Property Tax Exemption System
Sidebar: The Missing Road Map to New York City Tax Expenditures
Property Tax Exemptions for Whom?
PART II: Tax Exemptions for Private Universities
The Why and What of Special Tax Protections for Educational Properties
Scrutinizing Public Subsidies for Private Education
New York CIty: A College Town on Steroids
Tax-Exempt University Properties
City Subsidies for Non Residents
Sidebar: Pied a Terre for Foreign Universities
Educators or Real Estate Empire Builders?
Other Subsidies for Private Universities
PART III: Higher Education in Context
The Growing Importance of Higher Education to New York City
Declining Public Support for and Access to Higher Education
Higher Education as Big Business
The Case for Greater Aid to Public Higher Education
CUNY and the Future of Public Higher Education: American Dream Machine
or Harvard-on-the-Hudson?
Sidebar: CUNY: The Free Academy that is No More
The State of Need-Based Student Financial Aid
Workforce Development Initiatives
Whither Goes CUNY?
PART IV: Profiles in Profit: NYC’s Top Property-Owning Universities
Cooper Union and the Chrysler Building: Blind Benevolence
Columbia University: "Who Owns New York?"
King of Real Estate
Columbia’s Manifest Destiny
Sidebar: Sunspots and Subsidies
NYU: The Wannabe Empire
Sidebar: Unfreedom of Speech? NYU’s Labor Battle
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Contents, continued
PART V: Primary and Secondary Education
New York City’s Public School System
Sidebar: Good News/Bad News: Private Funding for Public Schools
A World of Privilege and Prayer: Private Elementary & Secondary Schools in NYC
The Historical Role of Private Schools and Religion
The Costs of Contemporary Private Education
Sample Tuitions at New York City Private Schools
Property Tax Exemptions for Private Education
Other Public Subsidies for Private Education
A Special Case for Special Ed
Does Money Make a Difference?
PART VI: A Public Agenda for Reform
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City Project's Recommendations
Tables and Appendices
Table 1 Sources of Revenue from NYC's Major Taxes, FY 2005
Table 2 Higher Education Enrollment in NYC Private and Public Institutions, 2004
Table 3 Value & Tax Expenditures of NYC Higher Education Properties by Borough,
FY 2005
Table 4 Top 10 NYC College and University Tax Losses, FY 2005
Chart 1 City Resident Enrollment & Total Tax Expenditures for Top 10
NYC Colleges & Universities, 2004
Table 5 Student Enrollment by Ethnicity at NYU, Columbia and CUNY
Table 6 CUNY Sources of Support FY 1991- FY 2005
Table 7 Funding Levels & Types of Recipients of NYS College Aid Programs,
FY 2003 – FY 2004
Table 8 Columbia and NYU Comparison of Properties & Tax Expenditures,
FY 1992 and FY 2005
Table 9 Top 20 Private Elementary and High School Tax Expenditures, FY 2005
Appendix A City Resident Enrollment at Property-Owning Private Institutions
Compared to Public Institutions, 2004
Appendix B Private College and University Property Tax Expenditures, 2005
Appendix C How City Project Recreated the [Property Tax Exemption] Universe
Appendix D Select Agency Expenses for Proposed Fee for Service
Appendix E Sample of Proposed Service Charges for Universities Compared to
Current Tax Expenditures
Appendix F Property Holdings of Columbia University and Affiliates, FY 2005
Appendix G Property Holdings of NYU, FY 2005
Endnotes
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INTRODUCTION
This is City Project’s second report to examine aspects of the scope, nature and impacts of real
property tax exemptions on New York City’s property tax base and fiscal health, as well as the
intersection of tax exemptions with a wide range of public policy issues.* This report analyzes
property tax expenditures for all levels of private education, both secular and religious, from prekindergarten through graduate and professional schools; reviews the underlying rationales for
such exemptions and evaluates their current validity and viability; and examines the policy and
practical implications for public education and the city’s overall fiscal stability of continuing to
confer unlimited property tax exemptions for properties owned by private educational institutions.
It concludes with various recommendations for reform. To our knowledge, this report is the first
contemporary quantitative and qualitative examination of these critical public policy issues.
Although we do not suggest that reforming New York State’s unwieldy system of property tax
exemptions alone will solve the constant revenue squeeze on New York City and other
municipalities, we believe that this report (along with our prior one) makes a compelling case for
the need for a full public review of that system , for the following reasons:
1. Cumulatively, property tax exemptions cost New York City over $7 billion in lost revenues in
Fiscal Year 2005, with the amount escalating annually and no limitation in sight;
2. Property tax exemptions represent invisible, unfunded mandates that constitute public
subsidies, which are implemented outside of democratic public budget processes;
3. The existence, scope and value of current property tax exemptions unfairly redistribute and
increase property and other tax burdens for other taxpayers; and
4. Many exemptions were originally granted on the basis that the exempted institutions provided
revenue-neutral “public benefits,” which may no longer be the case.
In short, no matter how sizzling the city’s real estate market, property tax exemptions rob the
city’s treasury of revenue it can neither afford nor fairly replace, and do so covertly and
unaccountably. While property taxes remain New York City’s single largest source of revenues,
the array and volume of tax exemptions are taking a heavy toll. In Fiscal Year 2005, the
percentage of New York City properties liable for the payment of full real estate taxes
___________________________________________________________________________________________
*The first paper in the series, “State of Distress: How New York State’s Property Tax Exemptions are Starving New
York City’s Treasury,” cast a spotlight on the city’s $1.5-billion annual loss of property tax revenues from properties
owned by the State of New York and five state-controlled public authorities in the city.
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plummeted to just above 42% of total properties--a 16% decline from just one year ago.
The billable assessed value of these fully taxable properties now represents only 40.2% of
the total billable assessed value of all city real estate.
Excluding exemptions for properties owned by different levels of government and quasigovernmental entities, there are hundreds of categories of property tax exemptions conferring full
or partial tax exemptions on literally hundreds of thousands of private properties in New York City.
The vast majority of such private exemptions are mandated by New York State, but their costs are
wholly absorbed by the city. In general, the city has no authority over or input into their existence,
scope, duration or amount. These fiscal and local control issues are replicated to greater or lesser
degrees in localities around New York State.
Property Tax Burdens
Property taxes are by nature regressive: they are not pegged to a property owner’s ability to pay,
and the lower a property owner’s income, the larger the proportion of income (s)he will have to
devote to paying them. The disconnect between income and tax levels becomes especially acute
during periods of “exuberantly irrational” real estate markets, when the values of all types of
property (and the property taxes that reflect the increased book value) may rise to levels
completely divorced from any intrinsic value or an owner’s ability to pay.
Although virtually all New Yorkers are affected by rising property taxes, political debates on the
effect of property tax burdens tend to focus exclusively on traditional homeowners (and,
increasingly, condo and co-op owners), while others who are directly affected, including
residential and commercial renters, are left out of the equation. In New York City, for example, the
recent 18.5% property tax increase was followed a year later by annual property tax rebates for
homeowners, which in fact cancelled out their tax-rate increase,1 while no relief at all was
provided to residential and commercial renters. The question of unaffordable property taxes was
once confined to suburban areas, but is now becoming a hot urban issue as well and should, but
hasn’t yet, cast a spotlight on the growing revenue--and tax--impact of properties that are
excluded from the base of taxable property because of their tax-exempt status.
Unfunded Mandates and “Non-Discretionary” Expenses
The terms “unfunded mandates” and “non-discretionary” expenses have become the latest
buzzwords in state and local government circles here and throughout the country. In New York
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City, an ever-growing portion of the annual expense budget is required to be spent on unfunded
(or badly underfunded) state and federal mandates, including Medicaid and the Bush
Administration’s No Child Left Behind Act, among many others. The city must also pay for other
rapidly escalating “non-discretionary” expenses, including debt service and municipal workforce
benefits, over which it exercises less than full control.
Out of a mix of necessity and frustration (perhaps leavened with a little ideology), New York City
and other localities have begun to focus on these runaway costs and their limited control over
them. The Bloomberg Administration has particularly zeroed in on pension and health costs for
municipal workers, as well as skyrocketing Medicaid costs. But while municipal workers and poor
people are the often the first to be targeted when it comes to government cost-saving measures
and service cuts, tax expenditures from property tax exemptions--which are also unfunded stateimposed mandates--receive little attention from local policy makers, politicians and the public.
Property tax exemptions: 1) shrink the city’s property tax base; 2) shift heavier tax burdens to
other taxpayers and residents; 3) impede the city’s ability to develop and implement critical public
policies; and 4) contribute significantly to the city’s chronic structural gap between recurring
revenues and expenses for public services and infrastructure needs. Tax expenditures play an
important, if unnoticed, role in the city’s annual budget balancing act of choosing between cutting
services and deferring infrastructure work, or seeking additional revenues from smaller tax bases
through (usually) regressive taxes, fines and fees.
And property tax exemptions are more than lost city revenues. They also represent an enormous,
undemocratic transfer of public resources to private institutions and individuals, a flourishing
system of public assistance to the private sector. They occur “off-budget,” beyond the control of
local democratic budget processes and largely invisible to both budget makers and the public.
The Special Need to Re-Evaluate Private Educational Property Tax Exemptions
The specific focus of this report is property tax exemptions conferred on private, not-for-profit
educational institutions in New York City. It touches on the following fiscal and policy issues:
- Lost property tax revenues from exempt private educational institutions are both substantial and
increasing, as are the number and value of their exempt properties. At the same time, the nature
and use of a growing portion of these properties increasingly extends beyond educational uses,
which constitute the underlying justification for the exemptions;
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- The state and federally mandated civil right of all children in New York City and State to a
quality, free public education requires adequate public funding that is increasingly difficult to raise;
- New York City’s evolving role in the global economy calls for new public assessments about the
levels and types of education that are adequate and necessary to meet the needs of city
residents, businesses and local government, and how to best ensure that such education will be
affordable and accessible for all New Yorkers;
- The changing nature and role of private educational institutions, particularly at the college level,
raise questions about the extent to which these institutions continue to provide the “public
benefits” on which their property tax exemptions are based, as well as the extent to which they
remain distinguishable from private for-profit businesses.
Many (though not all) of the recommendations contained in this paper also apply to other statemandated categories of property tax exemptions, especially religious and charitable exemptions,
which, like education, are afforded particular protection by the New York State Constitution.
Finally, most of the issues examined here affect not only New York City, but most other
municipalities and localities throughout New York State. As you read this report, we urge that you
consider the following broad policy questions that apply to property tax exemptions generally:
- Whether the existing property tax exemption structure should be maintained, and if so, for how
long, under what conditions, and for which activities, properties, entities and individuals;
- What role should local governments play in determining the nature, duration and scope of
property tax exemptions, as well as the uses of such properties;
- Which level(s) of government should bear the costs of property tax exemptions;
- What alternative mechanisms to property tax exemptions might be implemented and funded to
provide better-targeted, more cost-effective subsidies for public-benefit activities;
- Whether service or user charges should be imposed on institutional owners of exempt
properties to compensate localities for the institutions’ consumption of local services and use of
public infrastructure, and if so, in what form(s) and in what amounts.
At any particular moment, whether New York City’s revenue flow is healthy or anemic, annual
revenue losses in the billions from tax-exempt properties have a profound but unperceived impact
on the city and all of its residents and institutions. Given the uncontrolled growth of property tax
exemptions and their fiscal and other policy impacts on local governments, the time is ripe for a
comprehensive re-examination of all private tax-exempt properties in New York City and
throughout the state. It is our intention and hope that this report (together with our previous report
“State of Distress”) will launch an open public debate about these issues, starting with exemptions
for properties of private educational institutions.
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PART I: THE NEW YORK CITY PROPERTY TAX AND TAX EXEMPTIONS
Real Estate Taxes: New York City’s Fiscal Lifeblood
Since 1980, when federal aid to states and cities began a precipitous 25-year decline and New
York State’s aid to the New York City likewise shrank,2 New York City has increasingly had to
raise its own revenues to fund essential local services and crucial infrastructure.
Over time, the city has developed a diverse tax structure that goes well beyond the property tax,
which tends to be the only or major revenue source available to other localities. In addition to the
property tax, New York City’s tax roster now includes: two other real estate-related taxes; a
personal income tax; three major business income taxes; a general sales tax; and an array of
other sales, excise and use taxes, along with a smorgasbord of fines, service charges and fees.
The result is a diversified revenue base and freedom from over-reliance on any one tax,
especially the property tax. Although this multiplicity of revenue streams has raised charges of
over-taxation, in general, it has enabled New York City to meet its service needs and maintain its
infrastructure during economic downturns, while keeping its property taxes significantly lower than
elsewhere in region.
But even with the city’s broad mix of taxes, the property tax has been and remains its single
largest source of income, bringing in much higher revenues than any other source. In FY 2005,
the property tax generated $11.6 billion in revenue, representing over 37% of all city tax
revenues. If the city’s two other real estate-related taxes (the property transfer tax and mortgage
recording tax, both of which were at all-time highs in FY 2005) are included, the total take from
real estate-related taxes climbs to $13.9 billion, or fully 45% of all local tax revenues. Because of
statutory phase-in restrictions and ceilings on property tax increases, the property tax is also the
most stable and predictable city tax.
As Table 1 (below) shows, there is a sharp disparity in the amount of city revenues raised by real
property-related taxes on one hand and all other major local taxes on the other. The city’s second
largest source of tax revenue, the personal income tax (PIT), generated almost $6.7 billion,
representing 21% of locally raised tax revenues--certainly a rich haul (and an all-time high for this
tax), but still less than half the funds generated by real-estate-related taxes. Clearly, New York
City’s real estate gold significantly trumps revenue from Wall Street salaries and bonuses.
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Table 1
Sources of Revenue from NYC's Major Taxes
FY 2005
NYC TAX
Revenue
Percent of
(in billions $)
Total City Tax Revenue*
REAL ESTATE TAXES
11.62
1.25
1.06
13.93
37.6
4.0
3.4
45.0
6.66
4.38
21.5
14.1
2.40
0.65
1.16
4.21
7.7
2.1
3.7
15.5
$29.18
94.1%
a. PROPERTY TAX
b. MORTGAGE RECORDING TAX
c. PROPERTY TRANSFER TAX
SUBTOTAL REAL ESTATE TAXES
PERSONAL INCOME TAX
GENERAL SALES TAX
BUSINESS INCOME TAXES
a. GENERAL CORPORATION TAX
b. FINANCIAL CORPORATION TAX
c. UNINCORPORATED BUSINESS TAX
SUBTOTAL BUSINESS INCOME TAXES
TOTAL
* Total tax revenue from all NYC taxes in FY05 = $30.87 billion.
Source: Comprehensive Annual Financial Report, FY 2005, NYC Comptroller,
as analyzed by City Project.
In FY 2005, revenue from the city’s three real estate taxes exceeded federal categorical aid to the
city by $7.3 billion and state aid to the city by $5.1 billion. In fact, the city’s real estate-related
taxes brought in just $1.5 billion less than state and federal categorical aid combined.
In addition to being the largest source of city revenues, the property tax is unique in that, unlike all
other city taxes, it is a zero-sum game. The city establishes its annual property tax levy, which is
the actual amount of revenue it must raise from the property tax, and then apportions this sum
among all taxable properties within its tax base at the different rates set for each of the four
classes of property. Tax-exempt properties are excluded from this base, which means their share
of the tax burden is shifted to the remaining universe of taxable properties, a base that is
shrinking every year. With all other taxes, exemptions, cuts, or waivers of taxes for some
taxpayers reduce the amount of revenue the government collects from that particular tax, but do
not increase the amount of taxes paid by others subject to the tax.
In short, owners and occupants of taxable residential or commercial properties in New York City
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effectively subsidize the tax-breaks granted to exempt properties. Businesses, primarily small
ones, that rent commercial space pay a pro-rated share of their building’s property taxes and all
tax increases under universal property tax “pass-through” provisions contained in their leases.
And residential tenants likewise share the increased tax burden, either through market-driven rent
increases, or annual rent increases set for the city’s declining stock of regulated rental housing,
both of which reflect property tax increases.
The Thriving Underworld of New York City Property Tax Exemptions
In FY 2005, New York City lost at least $7.3 billion in property tax revenues as a result of a
bulging array of full and partial property tax exemptions, the vast majority of which the city
has no control over.3
To place the city’s $7.3 billion exemption-caused tax loss in context, it represents more money
than was generated by either the personal income tax or the general sales tax. It is more than the
amount money brought in by the three major business income taxes combined, and more than all
of the city’s fees, fines and user charges combined. (See Table 1, above.) It is exactly the same
amount of funds that the city received in federal categorical aid. The amount of money lost to
property tax exemptions represents almost 24% of total local tax revenue and slightly less
than 14% of the city’s total expense budget for FY 2005.4
And the figures pertaining to these lost revenues are almost certainly significantly understated.
Their validity depends on the accuracy and frequency of the New York City Department of
Finance’s (DOF’s) property tax assessments. DOF is charged with annually assessing all of the
nearly one million properties in the city--unlike other jurisdictions in the state that do not even
attempt to reassess tax-exempt properties. But with finite resources and a small assessment staff,
logic and good management would dictate that DOF concentrate its assessment activities on the
city’s many thousands of taxable properties, which obviously will bring in the most revenue.5 In
fact, a DOF source informally acknowledged that given the huge inventory of properties in the city
and the relatively small property tax assessor staff, exempt properties do not receive comparable
attention to taxable ones, and that the total tax expenditure figure is underestimated.
In FY 2005, according to DOF, there were 988,561 properties located throughout the five
boroughs, which together were worth over $181.6 billion in total billable assessed value.6
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But because of hundreds of categories of tax exemptions, only 416,532 properties, or
42.1%, were fully taxable, down from just over 50% in FY 2004.7 This marked a 16% decline
from just one year before.8 What’s more, the fully taxable properties were worth only 40.2%
(or $73 billion) of the total billable assessed value of all city properties, a small decline in
value from FY 2004.9
By comparison, in FY 2005, only 3.62% of all properties in the city (a total of 35,610) were fully
tax exempt. But this relatively small number of properties accounted for a staggering $68.7 billion
in total billable assessed value, or just $3.3 billion less than the total value of hundreds of
thousands of fully taxable properties. And while the number of fully exempt properties increased
by just over 1% from the previous year, their value rose by 2.84%.10
Completing the exemption picture, the city had 536,210 partially taxable properties in FY 2005,
representing a one-year increase of 17.55%; their total billable assessed value climbed by almost
17% to $38.9 billion. Together, the city’s 572,029 fully and partially tax-exempt properties
represent less than 58% of all city properties and a staggering 59.7% of the total billable
assessed value of all real estate in the city.
In other words, just over 40% of the total billable assessed value of the city’s real estate is
being fully captured by the property tax.
Tax Expenditures: A Fiscal Oxymoron
In budgeting parlance, the term used for revenues that are not collected because of tax
exemptions is "tax expenditures." The New York City Department of Finance defines tax
expenditures as “deviations from the basic tax structure that reduce taxes for specific taxpayers or
groups of taxpayers. Traditionally, tax expenditures have been used to alter the distribution of the
tax burden and to create incentives for taxpayers to change economic behavior. Tax expenditures
provide economic benefits and are often used as alternatives to direct governmental
allocations.”11
But a more apt description of “tax expenditures” is “fiscal oxymoron.” The term sounds as though
it entails the active spending of tax dollars, when, in fact, it refers to tax dollars that are not
collected. Unlike the annual budget process through which collected tax revenues are spent for
public services and other public needs, tax expenditures occur "off-budget.” They do not appear
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anywhere in the city's budget as expense items and are therefore not subject to the public
scrutiny or accountability of the formal budget process.
An Out-of-Date, Out-of-Control State Property Tax Exemption System
The last official joint state legislative committee that examined New York State’s system of
property tax exemptions, over 35 years ago, characterized it as “a complex mixture of some
reasonable subsidies interwoven with anachronisms, patent gifts, statutory ambiguities
…entrenched inequities and fair incentives which are misdirected in whole or in part.”12
This same committee also predicted that, absent major reform, by 1985, 50% of property
throughout the state would be tax exempt.13 This prediction turned out to be depressingly on the
mark. Less than three decades ago, in 1967, tax-exempt properties in New York City comprised
just over 33% of the total assessed value of city real estate.14 Today, almost 60% of the city’s
properties are fully or partially tax exempt.
The number, categories and value of exempt properties, and, above all, the amount of lost
revenue, continue to grow at an alarming rate, like mushrooms in dark spaces hidden from
sunlight. Tax-exempt properties present a problem that is literally open-ended, without any legal,
practical or political limitation or end in sight.
Because property tax exemptions are in fact public subsidies and are proliferating rapidly, they
should be subject to close ongoing public scrutiny and periodic re-evaluation. Unfortunately, this
is not the case. As far as City Project could discover, there is no official state or city agency
keeping count of the exact number of categories and subcategories of tax exemptions on the
books (at last official count, there were over 180 statutory exemptions for individuals and
institutions, and that was nearly 15 years ago 15), or publicly reporting on cumulative revenue
losses from the entire universe of property tax exemptions.
The New York City Department of Finance produces two city Charter-mandated annual reports-the Annual Report on Tax Expenditures and the Annual Report on the New York City Property
Tax--each of which contains partial information, but with significant holes.
DOF’s Annual Report on Tax Expenditures (ARTE) restricts its analysis to a small portion of the
properties receiving full or partial property tax exemptions in New York City. The report only
covers tax-expenditure (and abatement) programs related to “city-administered real estate,”
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housing and economic development programs, as well as a number of city-administered business
income and tax excise expenditure programs. The most glaring omission is its failure to report on
any tax expenditures granted to non-profit institutions by virtue of their tax-exempt status, as
opposed to pursuant to any city or state tax-exemption program, which excludes the vast majority
of expenditures from educational, religious and charitable organizations, among others. On the
other hand, the Annual Report on the New York City Property Tax (ARPT) now provides, among
other information, comprehensive and detailed data about all exempt properties in New York City
--except the value and cost of their tax expenditures.16 (See below, The Missing Roadmap to
New York City Tax Expenditures.)
The Missing Roadmap to New York City Tax Expenditures
While the New York City Department of Finance (DOF) claims that “improved
reporting on tax expenditures has been a nation-wide trend in recent years,” its
own practices fall short. Neither of its two Charter-mandated reports on property
taxes--the Annual Report on Tax Expenditures (ARTE) and the Annual Report on
the New York City Property Tax (ARPT)--read individually or together reports fully
or comprehensively on New York City property tax expenditures.
Although DOF acknowledges that “some proponents of tax expenditure reporting
recommend that tax expenditure lists be as inclusive as possible, identifying all
deductions or credits that reduce the taxable base from 100 percent,” it chooses to
limit its own reporting to taxes that: 1) are administered by the city; 2) targeted to a
narrow class of transactions or taxpayers; and 3) constitute a “clear exception” to a
general provision of the tax laws. As justification for this self-limitation, DOF cites
the practices of the federal Office of Management and Budget and the specific
terms of the 1989 Charter referendum that first required the city to report on annual
tax expenditures.
However, though the Charter may have established minimum reporting
requirements, it certainly does not preclude more comprehensive
reporting. Especially in light of the greatly expanded universe of tax expenditures
that has arisen since the first Charter-mandated report in 1990, DOF should opt for
more providing more information, not less.
Quotes are from ARTE Fiscal Year 2005, p.3.
The city’s narrow tax expenditure reporting practices deny both policymakers and the public
complete and accurate information about critical revenue losses and effectively preclude public
debate about the validity and viability of continuing to grant current tax expenditures.
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Property Tax Exemptions for Whom?
In FY 2005, DOF’s ARPT reported that 680,938 property tax exemptions were taken by 572,029
properties in New York City,17 with the number of exemptions actually exceeding the number of
properties receiving them because a portion of these properties received multiple exemptions.
Together, these properties had an exempt tax value of $79.25 billion.18
According to DOF, exempt public properties--properties in New York City owned by the city, state,
federal and foreign governments, and by various state and city public authorities--account for
nearly 70% of the total exempt value of exempt properties, although the total number of
exemptions for these properties amounts to just over 20,150, or less than 3% of the total number
of exemptions. Various governmental properties alone account for almost 45% of the total value
of exempt properties in New York City, with the properties of state and city public authorities
accounting for just under 24%.19 These properties tend to be larger in size and concentrated in
high-value neighborhoods, leading to a relatively small number costing the city a king’s ransom in
lost property tax revenues. (See City Project’s report “State of Distress” for analysis of $1.5 billion
in annual tax losses from properties owned by the state and five public authorities.)
In direct contrast to public properties, where a relatively small number of exemptions account for a
huge portion of the total exempt value, private properties received more than 660,700 exemptions
(or 97% of the total number of exemptions), but together, they accounted for a total exempt value
of $24.6 billion, or 31.1% of the total value of exempt properties.20
DOF tracks four main categories (each with many subcategories) of tax-exempt private
properties: 1) those owned by “institutional” not-for-profit organizations, which include but are not
limited to the three state constitutional categories of religious, educational and charitable entities;
2) various categories of residential property, owned by both non-profit and for-profit entities; 3)
categories of commercial and industrial properties; and 4) residential properties owned by specific
classes of individuals.21
As a rule of thumb, tax exemptions granted to private properties in categories 2, 3, and 4 tend to
be restricted in duration and eligibility and may be subject to governmental approval or oversight.
Many tend to be partial rather than full exemptions (or abatements), and some may allow for or
require Payments In Lieu Of Taxes (PILOTs). Some of these exemptions actually enable localities
to opt out. They derive from state (or, to a far lesser degree, local) laws, rather than the state
15
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Constitution, and may be amended or repealed at the discretion of the legislature that created
them, usually the state’s.
Tax exemptions granted to education, religious and charitable properties in category 1 stand in
stark contrast to this general rule. They are constitutionally conferred and are mandatory, full (for
the most part) and permanent. In FY 2005, all category 1 institutional non-profit properties were
worth almost $11.9 billion in exempt value (or 15% of the citywide total private exempt value of
$24.62 billion) and receive over 15,300 exemptions (or 2.25% of the number of private
exemptions).22
PART II: TAX EXEMPTIONS FOR PRIVATE UNIVERSITIES
The Why and What of Special Tax Protections for Educational Properties
Any discussion of educational property tax expenditures must begin with an
acknowledgement of their special exempt status and what it does--and does not--mean in
terms of potential reforms.
In 1938, the New York State Constitution was amended to codify the state’s existing crazy
quilt of property tax exemptions that had developed in an ad hoc fashion over time. The
amendment established that, in general, property tax exemptions could be created,
changed or repealed by state law, rather than requiring subsequent constitutional
amendments. However, one provision carved out an exception to this rule for properties
owned by not-for-profit religious, educational and charitable institutions:
“Exemptions from taxation may be granted only by general laws. Exemptions may be
altered or repealed except those exempting real or personal property used exclusively for
religious, educational or charitable purposes as defined by law and owned by any
corporation or association organized or conducted exclusively for one or more of such
purposes and not operating for profit.”23
The state legislative committee that drafted this language described its rationale for
making educational properties one of three protected classes in its report to the State
Constitutional Convention:
“[E]ducational institutions render a service which, in great measure, would otherwise have
to be rendered by the State itself, and each institution lessens the burden which would
have to be borne entirely by the community at large and discharged by taxation. … It can
readily be demonstrated that the…cost and value of the services rendered to the public by
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the private…institutions, and the saving thereby effected to the budget or taxpayers of
states and cities, greatly exceed the aggregate of all exemptions granted or other
allowances and payments made to them.”24
The exception of educational institutions to the main thrust of the amendment was premised on
the claim “that private property necessary to the essential support of government ought not to be
the subject of taxation.”25 This early formulation of a public cost-public benefit analysis was
asserted without reference to or support from any research or data that actually measured the
relative public benefits of private education or the public costs of their tax-exempt properties.
Furthermore, however powerfully expressed and widely believed this notion may have been in
1938, the decision to include the particular protection in the amendment was arrived at with little
legislative or public discussion about and no consensus as to the concrete meaning of the “public
benefit” principle or the contemplated covered usages of the exempt properties. This is why the
amendment contains language specifically authorizing the state Legislature to define the
types of properties to be covered by the exemption. (A more pungent, wide-ranging and
ideological rationale was expressed by Nicholas Murray Butler, the president of Columbia
University, who declared that property tax exemptions for private universities were essential to
preserve “the fundamental and far-reaching” principle of the “distinction between the field of
Government and the field of Liberty,” against the “most subtle form of [social, economic and
political] revolution which confronts American democracy today … which is easily and silently
possible thorough taxation.”26)
Three points must be made here. The first is that what seems to be a blanket constitutional
exemption does not confer absolute or permanent tax exemption on properties owned by
educational, charitable or religious institutions. Rather, it requires that any alteration or repeal of
such exemptions be accomplished through constitutional amendment rather than by state law, in
contrast to all other categories of institutional or individual exemptions, which permit alteration or
repeal by state statute. Second, it does not grant wholesale exemption to any and all properties
owned by these groups. In fact, it restricts the mandatory exemption to properties “used
exclusively” for one or more of the three exempt purposes. Finally, through the phrase “as
defined by law,” the amendment not only authorizes, but, we would argue, mandates that the
state Legislature enact language to define and restrict the allowable uses of such properties,
which the Legislature has failed to do. Lacking any such qualifying legislation, judicial
interpretations of this clause have established that properties owned by these three types of
exempt institutions that are used wholly for commercial revenue-generating purposes are required
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to pay full local property taxes; those that are put to mixed use (exempt and non-exempt
purposed) are required to pay taxes calculated on a pro-rated basis for the non-exempt portion.
We will return to these qualified conditions later.
While it may have been true, even as late as 1938, that private educational institutions provided a
service at little or no cost to the public coffers, this has long since ceased to be the case.
As this report documents, the public costs of exempting properties owned by private educational
institutions, far from lightening public tax burdens, actually impose heavy and spiraling costs on
the public treasury over and above the legally mandated costs of providing free public education
at the primary and secondary levels, and subsidized public higher education.
Scrutinizing Public Subsidies for Private Education
Currently, of “institutional” non-profits, under which DOF includes charitable, religious,
educational, cultural, medical, and “special interest” organizations, educational institutions have
the third highest exempt property value at $2.31 billion, after religious properties (with $3.83
billion) and medical facilities (with $3.39 billion). Charitable properties trail in fourth place, with a
value of $1.12 billion, a significant amount, but less than half the value of educational properties
and one-third that of religious and medical properties.27
While they do not represent either the highest value of exempt properties or the largest tax
expenditures, all levels of private educational properties together cost New York City at
least $385,826,261 in lost property taxes in FY 2005--money that would otherwise have flowed
into the city’s coffers for spending on public education or other public services and needs. For this
reason alone, educational tax exemptions merit scrutiny.
(For a description of how City Project created a reliable property tax exemption of educational
properties for this report, see Appendix C, How City Project Recreated the [Property Tax
Exemption] Universe, p. 101.)
But just as Congress is now calling for closer scrutiny of the federal income tax exemption of
private non-profit hospitals because of questions about the extent to which they provide charity
care and other concrete public benefits,28 City Project believes that property tax exemptions of
private educational institutions, particularly colleges and universities, deserve special scrutiny
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because of the nature of their “public benefits” and the ways in which they differ from many other
types of non-profit institutions. These issues include:
- Their major public benefits--their educational services--are not open or available to the general
public and they have no obligation or substantial incentive to educate local residents;
- The majority of individuals who benefit from educational services at private universities are, in
fact, not residents of New York City (Appendix A, City Resident Enrollment at Property-Owning
Private Institutions Compared to Public Institutions, p 95), and the fruits of their research and
other non-teaching activities likewise extend well beyond the city’s borders to the state, the nation
and even internationally, while their costs are borne by local taxpayers;
- Instead of providing a unique public benefit that would otherwise either go unmet or fall to
government, they duplicate (and compete for public funding with) public primary and secondary
education, a constitutionally mandated and public obligation, and with public higher education,
which is substantially funded through the city and state public university systems, at far lower
costs and with far greater public accessibility;
- They collectively own a large, valuable and growing inventory of property (and are actively
acquiring more), an increasing portion of which are used for purposes other than their exempt
educational purpose;
- Many are increasingly engaged in commercial revenue-generating activities in collaboration or
competition with for-profit enterprises and are adopting other indicia of the corporate world that
blur the distinctions between them and certain segments of the for-profit private sector, which
diminishes or may negate the rationale for their property tax exemptions;
- They deliver educational services to large numbers of students in highly concentrated
geographic areas, which places a heavy burden on city-funded public services (police, fire,
sanitation, transportation, etc.) and infrastructure, which the institutions use and consume without
paying any compensation to the city.
If the historic, theoretic and practical foundations of the wholesale, permanent tax exemption of
properties owned by private non-profit educational institutions are no longer applicable, and if, as
we believe, New York City’s public interest is greater than the sum of the interests of individual
educational institutions, then a full inquiry into continuing such exemptions in their current scope
and form is, itself, very much in the public interest.
New York City: A College Town on Steroids
New York City hardly fits the stereotype of the typical American college town: a small city, suburb
or rural area, with one or at most two large educational institutions that by size and impact
resemble the proverbial 900-pound gorilla, dominating the local economy and shaping day-to-day
life in ways that tend to produce sharp “town-gown” tensions. Harvard and MIT and Cambridge/
Boston, Yale and New Haven, or Cornell University and Ithaca, NY, all come to mind.
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But New York City nonetheless is a college town–on steroids. It is home to at least 52 private
non-profit colleges and universities, which together serve almost 214,000 full- and part-time
degree-seeking students and employ tens of thousands of people. (Recent years have seen a
burgeoning industry of private for-profit higher education institutions in the city, many of which
receive various state-funded higher education subsidies, but their properties, if they own any, are
not tax-exempt, and therefore they are outside the scope of this report.)
While no single private university dominates the city’s economy or other major aspects of local life
(although a small number do have disproportionate impacts), by virtue of the cumulative number
of institutions, their geographic locations and concentrations, private higher education as an
industry has a significant impact on the city’s economic and cultural life, as well as on its fiscal
bottom line. And in terms of strained community relations with host neighborhoods, a handful of
private universities unfortunately have functioned in ways that are highly reminiscent of the
traditional town-gown model.
Higher education in the city also encompasses the City University of New York (CUNY) and four
city-sited institutions of the State University of New York (SUNY), which together have an
enrollment nearly 232,000 students. (See Table 2, below.)
Table 2
Higher Education Enrollment in NYC
Private and Public Institutions, 2004
Public*
Private
No. of
Institutions
Enrollment Percent
No. of
Institutions
Enrollment
Percent
Total
Bronx
Brooklyn
Manhattan
Queens
Staten Island
3
8
35
4
2
19,046
24,882
130,319
21,799
2,358
44.1
33.6
57.6
30.4
15.9
4
5
8
5
1
24,189
49,252
95,856
49,976
12,442
55.9
66.4
42.4
69.6
84.1
43,235
74,134
226,175
71,775
14,800
Citywide
52
198,404
46.1
23
231,715
53.9
430,119
*Public institutions include both CUNY and four NYC-based SUNY institutions.
Source: NYSED Office of Research and Information Systems. Enrollment figures are for 2004 and include
full-time and part-time students.
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Altogether, more than 430,000 students are enrolled in degree-granting programs at New York
City higher educational institutions, including two- and four-year colleges and graduate and
professional schools. Students enrolled in public higher institutions slightly outnumber those in
private ones (by 33,311) and constitute slightly less than 54% of all degree-enrolled students in
the city. These figures do not include at least an additional quarter-million New Yorkers who are
taking non-degree courses at colleges and universities in the city.
Tax-Exempt University Properties
Of the city’s private non-profit higher education universe, 40 institutions own property (38, if
Barnard and Teachers College, as affiliates, are folded into Columbia University’s totals).
Citywide, in FY 2005, these institutions cumulatively owned at least 706 individual tax-exempt
properties, the assessed value of which was $2.63 billion, with their exempt value amounting to
$2.21 billion, indicating that the overwhelming majority of educational properties receive full tax
exemption. Together, these properties cost New York City at least $266,795,568 in foregone
property taxes in 2005 alone. (See Appendix B, Private College and University Property Tax
Expenditures, FY 2005, p 98.) These figures and Table 3 (below) do not include eight properties
owned by non-NYC-based institutions or four higher education properties that, like the
International House, are not owned by an individual university.
It is important to view this data in its historical context. As recently as FY 1992, the total assessed
value of properties owned by higher educational institutions in New York City amounted to
$934,795,421, with an exempt value at slightly over $858,925,000. Most significantly, in 1992,
they cost New York City $90,859,046 in foregone property taxes.29
In other words, the city’s lost tax revenues from tax-exempt college and university
properties almost tripled in just 13 years. And remember, the current $266+ million in tax
expenditures is a conservatively estimated, recurring loss that continues to rise year after year.
As Table 3, below, illustrates, Manhattan is the epicenter of private higher education in the city
and, given the extraordinary value of its real estate, the unrivalled seat of lost city revenues.
The loss of revenues from higher educational properties is considerable, but the bulk is
attributable to a relatively small number of colleges and universities that own a disproportionate
number and value of properties.
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Table 3
Value and Tax Expenditures of NYC Higher Education Properties by Borough
FY 2005
Total
Properties
Total
Assessed Value
Total
Exempt Value
Total
Tax Expenditures
Borough
Manhattan
Bronx
Brooklyn
Queens*
Staten Island
584
44
45
23
10
1,928,817,095
245,412,567
163,886,819
227,312,897
47,903,080
1,677,824,721
243,794,817
162,862,143
223,866,475
47,903,080
190,440,603
27,396,141
18,457,721
25,119,156
5,381,949
Citywide total
706
2,613,332,458
2,356,251,236
266,795,570
This chart includes all categories of properties.
Source: IBO Exemption Analysis, August 2005, as analyzed by City Project.
*The number of properties located in Queens may be misleading since the entire campus of St.
John's University is listed as just four separate properties, an anomaly in DOF records further
described in Appendix C, p. 100 of this report.
As Table 4, below, demonstrates, ten universities account for almost 83% of higher
education property tax expenditures. But most striking is the size of the real estate
footprint and tax consequences of just two of them: Columbia University (including
Teachers College and Barnard) and New York University.30 Together, they are responsible for
fully 45% of the total revenue loss from all higher education properties, and own 381 properties,
or 54% of the number of properties owned by private colleges and universities in the city.
Columbia alone owns 261 tax-exempt properties, with NYU in second place with 105 properties.
But the numbers of both universities (as well as several others) are increasing almost daily as
they expand beyond current campuses into new neighborhoods. (See profiles of Columbia and
NYU, p. 50 and p.60, below.)
The remaining top ten universities own relatively few properties, but they tend to be of high
assessed and exempt value and hence account for significant tax expenditures. Yeshiva
University, the only real exception to this general rule, owns at least 123 properties, but the vast
majority of them are individual condos or other single housing units.
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Table 4
Top 10 NYC College and University
Tax Losses, FY 2005
Institution
COLUMBIA UNIVERSITY
BARNARD COLLEGE
TEACHERS COLLEGE
subtotal Columbia & affiliates
NEW YORK UNIVERSITY
ST. JOHN'S UNIVERSITY*
FORDHAM UNIVERSITY
COOPER UNION
YESHIVA UNIVERSITY
ROCKEFELLER UNIVERSITY
PRATT INSTITUTE
MANHATTAN COLLEGE
PACE UNIVERSITY
No. of
Total
Percent
Total
Percent
Properties Assessed Value of Total AAVT Tax Expenditure of Total Expnd
261
623,558,768
23.9
61,217,801
22.9
7
51,156,000
2.0
4,770,821
1.8
8
116,982,450
4.5
13,038,990
4.9
276
791,697,218
30.3
79,027,612
29.6
105
502,303,875
19.2
42,133,034
15.8
11
215,788,045
8.3
23,815,960
8.9
17
207,222,295
7.9
23,054,439
8.6
8
174,857,400
6.7
19,619,389
7.4
123
106,241,885
4.1
11,611,007
4.4
5
56,398,500
2.2
6,587,031
2.5
15
49,359,552
1.9
5,610,859
2.1
11
45,700,500
1.8
5,140,813
1.9
3
42,840,000
1.6
4,479,439
1.7
Top 10 Subtotal
574
2,192,409,270
83.9
221,079,583
82.9
Citywide University total
706
2,613,332,458
100.00
266,795,568
100.00
Source: IBO Exemption Analysis, August 2005, as analyzed by City Project.
* As noted in Appendix C, p.100, the number of properties attributed to St. John's is low, since its entire campus
is listed as just four separate properties, an anomaly in DOF records.
City Subsidies for Non-Residents
Since the historic justification for property tax subsidies for private colleges and universities are
the public benefits they allegedly provide, one concrete way to measure these benefits to the city
and its residents is to determine who actually receives and directly benefits from their services.
To do this, City Project obtained and analyzed data relating to the recorded residences of enrolled
higher education students, and then compared the number and proportion of city residents
attending private property-owning colleges and universities to those attending CUNY and SUNY’s
four campuses located in New York City.
Our findings were stark: overall, only 38.2% (79,505) of a total of 208,012 students enrolled in
private property-owning colleges and universities in New York City in 2004 were city
23
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residents. By comparison, 83.3% or 181,696 of CUNY’s total student body were city residents.
Rounding out the picture, 49% (6,662 of 13,579) of the students attending the four city-sited State
University of New York (SUNY) institutions were residents of New York City. (For comprehensive
student residency information for all private and public colleges and universities in New York City,
see Appendix A, City Resident Enrollment at Property-Owning Private Institutions Compared to
Public Institutions, 2004, p. 95.)
The city residency rate for students among the top ten property-owning universities drops even
lower than the overall rate for all private institutions. These ten universities, which together
account for over $221 million or almost 83% of all higher education property tax expenditures,
enroll a total of 132,619 students. Of this number, only 38,800 or 29.2% are city residents.
Pied a Terre for “Foreign” Universities
In reviewing hundreds of individual tax-exempt properties owned by colleges and universities
in New York City, City Project discovered a small but potentially open-ended phenomenon that
underlines the irrationality of blindly continuing the current system of across-the-board tax
exemptions for properties owned by any and all non-profit higher educational institutions.
We happened upon six U.S. universities with no campus or teaching facilities in New York
City, which nonetheless own at least eight tax-exempt properties here, most of which are
residential. Together, these properties are subsidized by New York City taxpayers to the tune
of over $762,600 a year.
These “foreign” institutions include Appalachian State University, American University, Bard,
Brandeis, Ohio Wesleyan and Syracuse University. Some of their properties, which DOF has
coded under the category of “colleges/universities”, are, in fact, residential condos or
condops. Others are coded as “student dorms” and “faculty/student housing,” which seems
questionable, given their lack of academic presence in the city. Not surprisingly, all the
properties we found are located in Manhattan.
Pied a terre on city taxpayers, anyone?
With a few exceptions, as Chart 1 (below) depicts, it appears that the higher the profile and
reputation a university has, the greater the value of its properties and its tax expenditures, and the
more likely it is to attract out-of-town students, while providing substantially fewer city residents
with the benefits of its publicly-subsidized private education.
Besides Columbia and NYU, the two real estate giants, it’s instructive to compare Fordham
University and St John’s University, two facially similar top-ten institutions, each of which costs
24
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the city over $23 million a year in foregone property taxes. Both are Catholic institutions (Fordham
is Jesuit; St John’s is Vincentian); both have multiple campuses, with the main campus for each
located outside of Manhattan (Fordham’s is in the Bronx, St John’s’ is in Queens); and both offer
undergraduate, graduate and law degrees, among other programs. St John’s is larger by almost
6,000 students, as well as less expensive, although tuition for both is well above $20,000. Both
market themselves nationally and internationally. But beyond the city limits, Fordham is better
known and more competitive than St John’s. As a result, Fordham attracts a far more
geographically diverse student body: only 12.4% of its students are from the city, compared to
61.4% at St John’s. Fordham’s entering students also have substantially higher paper credentials,
Chart 1
City Resident Enrollment and Total Tax Expenditures for Top 10 NYC Colleges and Universities
90
79
80
City Residents as % of
Total Enrollment, 2004
70
61.4
60
Tax Expenditures
(millions $), 2005
47.4
50
42.1
41.1
37.4
40
29.7
30
23.8
23.1
23.3
19.6
20
15.6
14.9
12.5
11.6
8.3
10
6.6
5.7
5.1
4.5
0
Columbia
(30,555)
NYU
(39,408)
St. John's
(19,813)
Fordham
Cooper Yeshiva U. Rockefeller
(14,060) Union (955) (6,124)
(193)
Pratt
(4,540)
Manhatt.
Coll.
(3,301)
Pace
(13,670)
Numbers in parentheses = total institutional enrollment, 2004.
Source: Enrollment figures from NYSED; tax expenditure figures from IBO Exemption Analysis, August 2005, as calculated by
City Project.
with 72% of entering full-time freshmen in the top quarter of their high school class, and 34% in
the top 10%, compared to 51% of those entering St John’s ranking in the top 25% of their high
school class, and 23% in the top 10%. Similar differences exist between the two schools with
respect to entering freshmen SAT scores and grade point averages.31
While the benefits to New York City from private higher education are not confined to the city
residents who actually attend the schools, the public subsidies are not restricted to city residents
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either. With the rising cost of public higher education and shrinking public funding, it seems
appropriate to ask whether indiscriminate, permanent property tax exemptions are the best and
most cost-effective way to finance higher education for New Yorkers.
Educators or Real Estate Empire Builders?
Not all tax-exempt educational properties are equal. They vary widely in terms of their type, usage
and degree of connection to an institution’s fundamental educational mission, which is, after all,
the rationale for granting them property tax exemptions in the first place.
As discussed above, DOF implicitly recognizes the different nature and uses of such
properties in the manner in which it classifies them in its property tax exemption rolls. It
uses three major categories or exemption codes to record these properties:
“college/university” (Exemption Code 1601); “student dorm” (Exemption Code 1603); and
“faculty & student housing” (Exemption Code1604).32
When it comes to college and university properties in New York City, there is a distinct but largely
unacknowledged difference between two general types of properties and real estate activities.
First, there is the majority of properties that are specifically educational in nature. Classified for
the most part under DOF’s code for “college/university,” these properties tend to be learning
facilities (classrooms, libraries, laboratories, etc.), along with support facilities, including faculty
and administrative offices. With some exceptions, they tend to have been originally constructed to
serve the educational purposes they actually perform: to provide space for students to learn, for
faculty to research and write, and for administrators to keep the institution functioning.
On the other hand, there is a second category of real estate activities and properties,
currently in the minority but growing apace, which City Project is calling “real estate empire
building,” which generally refers to tax-exempt educational properties that are not directly
educational in nature. This category usually involves a university’s acquisition of existing,
privately owned non-educational properties, frequently entire residential apartment
buildings, for use as permanent housing by university faculty, staff and, occasionally,
graduate students. It may also entail the purchase of existing commercial properties for
university use as commercial, mixed-use, or administrative buildings. “Empire building”
also includes the less frequent but growing practice of purchasing and demolishing various
existing properties and replacing them with newly constructed buildings for use by the
university for residential, mixed-use, or educational purposes.
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Under City Project’s definition, real estate activities are considered empire building when the
number and tax expenditures from non-educational (or extra-educational) properties either
exceed those of educational facilities or constitute a significant portion of an institution’s total
property portfolio. (In this definition we would also include institutions whose general real estate
development activities constitute a significant portion of their capital expenditures, but this report
does not analyze this factor.)
As illustrated in Appendix B, a significant number (and value) of properties acquired or developed
by universities and colleges are permanent, full-year apartment buildings, which DOF records
under its category of “faculty & student housing,” more to distinguish them from instructional and
other educational facilities than to differentiate them from regular rental housing, which the vast
majority of them are. As of FY 2005, such properties represented more than $34 million in tax
expenditures, with Columbia University’s housing stock alone worth almost $16 million in tax
expenditures ($16.26 million if the “faculty & student” non-dormitory residential properties of its
two affiliated institutions are included).
Several universities and colleges other than Columbia and NYU are also engaged in actively
adding non-educational properties to their real estate portfolios. For example, Yeshiva University
currently owns 86 non-educational properties, which tend to be individual condo or co-op units;
Marymount Manhattan College owns nine non-educational properties and one educational
property; Teachers College, affiliated with Columbia, now owns five extra- or non-educational
properties compared to three educational ones; and Jewish Theological Seminary owns thre noneducational properties compared to four educational ones.
Many of these properties were privately-owned, pre-existing residential buildings that were
purchased by colleges and universities, taken off the tax rolls, removed from the general
housing stock of the city, and repurposed for use as below-market rate faculty and other
institutionally restricted housing. Such tax-exempt activities drain the city treasury of
much-needed revenues and may have the additional effect of artificially inflating housing
values and reducing housing affordability for the residents of the neighborhoods where
these buildings are located.
Another activity that may be occurring more broadly is the purchase by educational
institutions of individual units of housing, primarily condos, for use by faculty and
administrators. Yeshiva University seems to have the lead in this area of residential
27
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housing. This type of housing purchase has similar impacts to the purchase of entire
residential buildings, but on a smaller, more scattered scale.
Above all, both types of permanent housing purchases have one fundamental
characteristic in common: they bear no intrinsic relationship to the exempt educational
mission of their institutional owners and can by no stretch of either imagination or
definition be classified as being used “exclusively for educational purposes,” as required
by the state Constitution.
However important--or necessary--the incentive such below-market rate housing may be
for recruiting and retaining valued faculty and other staff, it is absurd to claim that such
benefits should be subsidized by all city taxpayers. In a city where the term “affordable
housing” has become a true oxymoron, the development and allocation of rare housing
subsidies should be determined by publicly established city housing policies, not by the
unreviewable, unilateral and self-interested actions of private educational institutions.
And then there is the issue of student dorms and other types of unique student housing
facilities. Such properties (categorized by DOF as “Student Dorms”) accounted for an
additional $26.9 million in tax expenditures in 2005. We have not included such properties
as non-educational empire-building, although it could credibly be argued that dormitories
also constitute an extra-educational use of property. Student dorms are, however, at least
more closely related to the basic educational mission of colleges and universities than
providing publicly-subsidized permanent housing for faculty and other university
personnel, or displacing taxpaying for-profit businesses. In addition, most dormitories are
uniquely and exclusively of use in housing students and could not be used to house the
general population, since individual units tend to lack bathroom and/or kitchen facilities
and do not conform to New York City’s legal definition of self-contained general housing
(Class A) units. In addition, dorms tend to be fully occupied and used on an academicrather than calendar-year basis.
But while providing student housing may be more closely related to the exempt purpose of
educational institutions, it too merits closer review and at least some recalibration because
it represents an expanding public subsidy to non-city residents and may also cause the
direct or indirect displacement of long-time neighborhood residents where they are being
developed.
28
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Increasing numbers of New York City-based universities (e.g., NYU, St John’s, etc.) are evolving
from “commuter schools,” where student bodies were overwhelmingly comprised of city residents
who lived at home or elsewhere off-campus, to “campus schools,” attracting many more of out-oftown students. As Appendix A illustrates, of the city’s 40 private property-owning colleges
and universities, in 2004, only 12 had student bodies containing a majority of city
residents. This shift is creating a greatly expanded need for additional residential student space.
The result is an ironic and untenable situation in which private universities are developing more
properties as student dorms and other forms of less-than-permanent housing for their growing
number of non-city-resident students, while receiving greater city-subsidized property tax
exemptions for them. With the exception of new construction on vacant land, the development of
student housing almost always entails a university’s purchase of a taxable property and its
removal from the city’s property rolls.
These activities also transform properties previously available to segments of the city’s residential
or commercial publics to uses accessible only to a restricted class of individuals or activities
affiliated with the educational institution. Finally, in many cases the institution may upgrade the
purchased property, yet no portion of the property’s increased value benefits the city.
Empire building is still a distinctly minority practice in terms of the number of educational
institutions engaged in it, but it is on the rise in importance, numbers, impact and value--especially
in terms of lost city tax revenues--and there are no current legal limits to its restrain its expansion.
The threshold question is whether the nature or use of a property by a private university or college
should determine its eligibility for an education-based tax-exemption? The straightforward answer
is absolutely. Even under the existing 1938 constitutional amendment, tax-exempt properties
must be used “exclusively for” educational purposes “as defined by law” to be protected from
legislative change, which certainly seems to exclude at least faculty housing from classification as
an “educational purpose.”
Other Subsidies for Private Universities
Property tax exemptions are not the only type of public subsidies that private colleges and
universities receive from New York City and State. Many receive substantial amounts of
tax-exempt bond financing for the purchase, improvement or construction of tax-exempt
facilities. (This issue is beyond the scope of this report).
29
FATAL SUBTRACTION
There are also a number of education-specific subsidies, including the state’s Bundy Aid program,
which provides an annual cash payment to all private universities that apply, based on the
number of degrees granted each year. The exact amount of the payments is governed by state
law, which establishes a sliding scale that varies by the type of degrees awarded. Bundy Aid is a
source of totally unrestricted aid, with no requirements as to usage, which makes these funds
highly coveted by all private colleges and universities.
For FY 2004, $42 million in Bundy Aid was disbursed to 103 institutions statewide.33 This is
substantially lower than the maximum amount allowable under state law, which the state
Legislature routinely circumvents through language in its annual appropriations bills. The last year
of full statutory funding was FY 1990, when the state provided $107 million in Bundy Aid
payments to private colleges and universities.34 Though the program has not been immune to the
budget cuts of the 1990s, nevertheless, some of the wealthiest universities in the city and state
are receiving taxpayer money to do precisely what their property tax-exempt purpose requires
them to do: confer academic degrees. For example, in FY 2004, NYU received $4.5 million in
Bundy Aid, Columbia University received $2.9 million, Cornell University received $1.8 million,
and Fordham University received $1.4 million.
PART III: HIGHER EDUCATION IN CONTEXT
The Growing Importance of Higher Education to New York City
Historically, education has been fundamental to the city’s ability to successfully integrate waves of
new immigrants and provide a pathway to the middle class for many other New Yorkers. As
information- and technology-based jobs replace the manufacturing jobs that once formed the
backbone of the American economy and provided entry into the broad middle class, there is a
growing consensus among educators, business leaders and public policy makers that most
American workers need a college degree or some level of post-secondary training to qualify for
and retain well-paying employment.
Private business isn’t the only sector to benefit from a college-educated workforce. For
local government, higher education is an extremely cost-effective investment. College
educated residents earn more, which translates into increased public revenues from
personal income and sales taxes; they make fewer demands on public social services and
more informed health and lifestyle choices, which produce public savings; and engage in
30
FATAL SUBTRACTION
more prudent decision-making about personal finance, retirement and health, likewise
reducing government responsibility and expense in these areas.35 They also tend to be
more active participants in the civic, political and cultural life of the city, further enriching
our collective social environment.
Declining Public Support for and Access to Higher Education
Despite overwhelming evidence of the enormous benefits of enabling the American workforce to
obtain higher education or other post-secondary training, public funding for higher education has
been on a significant decline here and throughout the country in recent years. Economic and
education experts continue to raise dire warnings that public underfunding of higher and
continuing education is creating an impassable bottleneck in the availability and affordability of
higher education, which threatens to undermine American businesses’ ability to effectively
compete in the global economy and to create even wider income disparities in our increasingly
diverse workforce.
One report by a mainstream national commission dramatically characterized the impact from this
growing gap between societal and individual educational needs for higher education and its
availability as “a time bomb ticking under the nation’s social and economic foundations.”36 The prescription for bridging the gap and preventing this scenario is the immediate and
substantial increase in public funding for both secondary and higher education.37
Experts have pointed to a number of explanations for the decline in state funding and involvement
in higher education, including: 1) decreased funding for public higher education from rising public
demand for other public services, including health care and public schools, coupled with pressure
to reduce state and local taxes and decentralize and privatize state services; 2) shifting the
burden of the costs of higher education away from public funding through subsidies to institutions
and need-based aid, to individual students and their families through increased tuition and fees;
and 3) the expansion of new modes of providing higher education, including for-profit and
distance-based institutions, and their growing alliance with traditional non-profit institutions in
support of shifting public financial support from institutions to individual students. In response to
these and other political and fiscal pressures, most state legislatures and governors have
“refocused the state role away from institutional oversight and regulation in favor of greater
campus autonomy and market adaptability, and are encouraging institutions to be entrepreneurial
to best compete in the markets they deem most appropriate.”38
31
FATAL SUBTRACTION
Although such changes may have benefited some individual institutions, “some key functions that
serve the public do not flourish in a market-defined climate: affordable college access, particularly
for low-income students; addressing achievement gaps between racial and economic subgroups;
retaining students to a degree or other objective; assuring learning results…assuring adequate
programs and student places in areas of public need and high costs; and responsiveness to high
priority needs of employers and communities.”39
The situation in New York State is particularly disheartening. In its annual 50-state “report card on
higher education,” the National Center for Public Policy and Higher Education gave New York
State an “F” for affordability of public higher education. The report found that New York
required low- and middle-income families to pay a higher share of their incomes (nearly 50%)
toward the cost of a public 4-year college (and almost the same amount for 2-year colleges)
compared to other states, even after factoring in financial aid. The authors deemed New York’s
system of public higher education “one of the least affordable systems in the country for students
and families,” one that “does not offer low-priced college opportunities.”40
New York State also received only a C+ in “participation,” which measures the opportunities that
residents have to enroll in higher education, noting that “over the past decade, [New York] has
made no notable progress in enrolling students in higher education,” with the chance for doing so
by age 19 actually declining by 23%. The authors also noted that “the percentage of working-age
adults who enrolled part-time in college-level education or training had likewise declined, by 19%
compared to a national decline of 11%.”41
At the city level, one educator summarized the situation thus: “[T]here is a quiet crisis in
higher education in New York City. It is … the permanent recession.”42 His prognostication
for additional public disinvestment was as glum as it was colorful: “The recession in higher
education in New York us like a chronic cough; there may be an occasional respite, but,
given current conditions, it is sure to persist.”43
Higher Education as Big Business
There is no question that private colleges and universities bring multiple benefits to New York
City. In addition to educating students, they create jobs, buy local goods and services, and
contribute to the city’s cultural and intellectual life. While the importance to the city’s economy of
the so-called FIRE sector (finance, insurance and real estate) has always been highly touted,
32
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some observers claim the ICE sector (intellectual, cultural, educational and spiritual institutions) is
key to the city’s remaining a global mega-center.44
In terms of employment, Crain’s New York Business ranks NYU as the sixth largest private
employer in the city in 2003, with 13,216 employees, and Columbia University as the eighth
largest, with 12,525 employees. The number of employees at NYU and Columbia has grown by
2% and 3.3%, respectively, since 2002. Overall, the so-called “education supersector” (which
includes primary and secondary education) constitutes the 12th largest employment supersector
in the city, with a total of 122,100 employees in 2004.45
Ironically, as education grows in economic importance, its cultural impacts may be diminishing.
Historian Thomas Bender writes of the “academicization of intellectual and artistic life” in New
York City, as growing numbers of writers, artists and other intellectuals, who in the past would
have been “deeply involved” in city affairs, have instead become employed by universities and are
focused on “increasingly insular campus concerns.” He notes, “If cities need universities, so the
academy, if it is to avoid the fate of the dinosaur, desperately needs the intellectual, artistic and
political provocations of a vibrant metropolitan culture.46 Others claim that New York City is
experiencing a decline in its “creative class” as a result of the lack of affordable housing, an
imbalance of payments between it and the federal government, federal cuts in critical urban
programs, and inadequate state and local support for arts, culture and education.47
In fact, in many respects, colleges and universities increasingly operate like big business.
According to Crain’s, in 2003, NYU’s revenues were a staggering $2.005 billion, while Columbia’s
were $2.074 billion, having grown by 7.4% and 3.3% over their respective 2002 revenues.48
Moreover, each was recently the recipient of individual private donations of $200 million.49
And CEO compensation at colleges and universities is also beginning to rival the corporate world.
The highest paid education CEO in New York State is Theresa Bischoff of NYU Hospital Center,
one of nine college presidents nationally who were paid more than $900,000 in 2003-04. She
received over $945,900 that year. NYU’s president, John Sexton, trailed not far behind with just
over $897,000, and Syracuse University’s president received almost $802,000. More surprisingly,
in the world of public higher education, CUNY Chancellor Matthew Goldstein was paid $444,800
(including a generous housing allowance) in the same period, while the president of SUNY at
Albany ranked second with a salary of $371,000, and the president of SUNY overall received
$340,000.50
33
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At the same time, universities have increasingly begun to seek and succeed in generating
substantial revenues from fees for-services, the production and/or sale of goods, and commercial
research. Some of the research activities involve fierce competition with the for-profit private
sector, but a growing segment, particularly in higher education and healthcare, entails close
collaborations.
One study found that between 1980-81 and 1987-88, “private-industry support for university
research more than doubled in real terms,” with “virtually every major U.S. university” joining
“forces in some manner with large multi-national firms, especially pharmaceutical and chemical
firms,”51 and in the area of life sciences. Such private corporate support is naturally targeted to
universities’ applied or commercial profit-oriented research, rather than basic or “pure” research.
Similar patterns exist for relations between major private universities and various levels of
government, especially at the federal level.
But the financial benefits from such market-oriented relationships may not turn out to be
an unmitigated blessing, since they raise the specter of profound conflicts “between a
nonprofit’s focus on raising revenues and its public-serving social mission.”52 As Bart
Giametti, former president of Yale University, characterized the conflict, “the academic
imperative…[is] to seek knowledge objectively and to share it openly and freely, while the
industrial imperative is to garner a profit, which frequently creates the incentive to treat
knowledge as private property.”53 The conflict is far from academic, as illustrated by a
growing number of examples of troublesome commercial partnerships involving major
American research universities and various corporate giants in which the academic
obligation to share information fully and freely has been squelched by the terms of
university-corporate partnership agreements.54
An equally threatening issue is “goal displacement, as the social mission [of the institution]
slips from sight in the drive for revenue…sometimes forcing organizations to choose
between ‘capitalist appetites and…integrity.” Experts have warned that “if
nonprofit…commercialism continues to increase in magnitude and scope, nonprofits will
become even more entwined with private enterprise and less distinct from it.”55 One closeto-home example of this is Columbia University’s proposed biotech/biohazard research
center and its collateral commercial development in the Manhattanville area of Harlem.
(See Columbia University: “Who Owns New York?,” p. 50.)
34
FATAL SUBTRACTION
The New York City Partnership, a leading trade association of the city’s most powerful
businesses, and the New York City Economic Development Corporation, the city’s
business and economic development public authority, have encouraged the increasing
commercialization of higher education as a potential stimulus to economic development in
New York City.56 But they have ignored the negative effects of blurring both practical and
legal distinctions between non-profit universities and the for-profit private sector, and on
higher education in New York City.
Partnerships between universities, private enterprise and government may indeed create
new businesses or revitalize existing ones, as well as generate much-needed jobs and
revenue for the city. If the products of such arrangements fall within the parameters of
other city tax-exemption and abatement programs designed to create or retain jobs and
facilitate economic development, universities should apply for these particular benefits just
as private businesses do and be subject to the public scrutiny (limited as it may be) and
other restrictive terms and conditions of such programs.
But however much the private sector and the city government itself might welcome such
partnerships, the economic value of non-profit educational institutions to the city is neither the
historic justification nor an adequate legal basis for their wholesale property tax exemptions as
non-profit institutions. If the economic importance of a particular for-profit sector or business were
a categorical reason for exempting properties from taxation, then Wall Street, Madison Avenue,
Century 21 and others would not be paying any property taxes and the city’s tax base would
shrink to almost nothing.
As a matter of public policy, we believe that the increasing commercial activities of universities
must be factored into a public review of whether and under what conditions university properties
should be accorded educational tax exemptions. In numerous ways, from increased revenues and
CEO compensation to growing competition and/or collaboration with for-profit companies, private
higher education in New York City has become increasingly indistinguishable from big business,
regardless of its non-profit ownership garb. If it looks and acts like a profit-making sector, it
should be treated like one, including paying taxes on its properties.
35
FATAL SUBTRACTION
The Case for Greater Aid to Public Higher Education
In light of the widely acknowledged need for more American workers to have access to a college
education or advanced training, and given the rapidly rising cost and unaffordability of private
higher education, we believe that city and state policy- and budget-makers must make hard
decisions now about the relative cost-effectiveness and reach of public and private higher
education in determining how to marshal and target scarce public resources for higher education.
At a time when theories favoring the “free market” and the privatization of virtually every
function and institution in society are increasingly in the ascendant, it might seem quaint to
suggest that increased public support for higher education is most effectively directed to
public, rather than private, universities, but we do so on the following grounds:
- Public universities can be held publicly accountable and responsive to meet
identified and prioritized public needs;
- Public universities have a deeper reach into underserved segments of the
population who are in greatest need of higher education and skills training;
- Public universities provide much greater educational bang for the buck,
educating larger numbers of students at significantly lower prices.
CUNY and the Future of Public Higher Education: “American Dream
Machine” or Harvard-on-the-Hudson?
No analysis of the importance, costs and problems of higher education in the city would be
complete without a portrait of the City University of New York (CUNY), the city’s own
public university system. Offering liberal education and employment skills to hundreds of
thousands of poor, working class, immigrant and female New Yorkers for almost 160
years, CUNY’s senior and community colleges have functioned as the city’s gateway to
the middle class and to full economic, civic and political participation in the city’s life.
While Columbia, NYU, Fordham and other top-ranked private universities in the city
compete to attract “the best and brightest”--and most well-heeled--students from across
the country, most poor or immigrant graduates of New York City high schools (as well as
growing numbers of moderate and middle income students) find their higher education
options more circumscribed by finances: for them, it often comes down to a spot in one of
CUNY’s senior or community colleges or no college at all.
36
FATAL SUBTRACTION
CUNY’s system currently includes 11 senior colleges, six two-year community colleges, a
graduate school, a medical college and a law school. It is the nation’s largest urban
university and the third largest university in the nation. In Fall, 2004, 218,000 full and parttime students were enrolled in CUNY’s various degree-granting institutions. Another
230,000 students were enrolled in adult, continuing and professional education courses
throughout the CUNY system.57 All told, CUNY serves approximately 450,000 students a
year, which, if it were a city, would rank it as the 35th largest in this country.58
Over 83% of CUNY full- and part-time degree students are New York City residents,
ranging from a high of 85.6% of the 188, 476 undergraduates, to a low of 54% of Law
School students.59 Both low and high extremes, however, are considerably higher than the
overall percentage of city residents enrolled in property-owning private colleges and
universities, which averages only 38.2%. (See Appendix A.)
Of equal importance in terms of CUNY’s long-term impact on New York City, ten years
after graduation, 80% of CUNY graduates continue to live and work in the city.60 As a
mirror of New York City’s remarkable ethnic and racial diversity, CUNY far surpasses the
city’s top private universities. (See Table 5, Student Enrollment by Ethnicity, NYU,
Columbia and CUNY, below.)
Table 5
STUDENT ENROLLMENT BY ETHNICITY
NYU, COLUMBIA, CUNY
NYU
COLUMBIA
Asian Black Hispanic White
CUNY
Asian Black Hispanic White Asian Black Hispanic White
Undergrad
14%
5%
7%
74%
17%
7%
7%
69%
15%
30%
26%
28%
Graduate
11%
6%
5%
78%
9%
6%
4%
81%
11%
16%
13%
60%
NYU and Columbia enrollment figures for Fall, 2004. Source: CICU
CUNY enrollment figures for Fall, 2005. Source: CUNY Office of Institutional Research and Information.
37
FATAL SUBTRACTION
As New York City rapidly transforms into a majority “minority,” multi-ethnic show place,
only CUNY--not the city’s leading private universities-- has kept pace with these seachanges, at least at the undergraduate level. The question is whether CUNY remains
committed to doing so.
Notwithstanding CUNY’s historically high enrollment, its enormous student diversity and a
century and a half of documented successes, public financial support for CUNY has
been on the decline for 30 years, dropping to its lowest per-student rate in its
history, while tuition continues to rise.
The three-part Table 6, below, depicts a distressing trend: over the last fifteen years,
there has been a downward spiral in state and local funding for the city’s only
public university, accompanied by substantial increases in tuition and fees, which
cause a parallel shift in relative burden-sharing among these three major revenue
sources.
Using CUNY’s own figures, between 1991 and 2005--a period that encompassed a
soaring economic boom in New York City--state and city aid (in inflation-adjusted dollars)
declined by more than one-third each, while revenue from student tuition rose 89% and
now constitutes almost 44% of CUNY’s total revenues. For senior colleges, state and city
aid has declined even more, with tuition supplying an even larger share of the costs.
Overall, CUNY experienced an inflation-adjusted net decline in funding of at least 7.4%
between 1991 and 2005.61 Some observers, using different models to adjust for inflation,
arrive at higher figures for the decline in state and city support, as well as total support.
The net effect on institutional affordability speaks volumes: in 1990, a student at one of
CUNY’s 4-year colleges paid less than $1,400 in tuition and fees, while New York State
contributed $7,023 per student; by 2003, tuition and fees had climbed to $4,000, while
state support had dropped to $5,846. As a result, tuition costs for New York City and
State public higher education are “among the highest in the country,” particularly in
their community colleges, which ranked third highest in 2003-04, and substantially
higher than the national average.62
38
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Table 6
CUNY Sources of Support FY 1991-FY 2005
A. University-Wide Funding by Source 1991-2005
$, millions
State Aid
City Support
Tuition & Other Revenue
Total
1,191.7
266.1
398.0
1,855.8
Change
1991-2005
2005
1991
Percent
64.2%
14.3%
21.4%
100.0%
$, millions
790.0
176.9
752.2
1,719.1
Percent
46.0%
10.3%
43.8%
100.0%
$ +/-401.7
-89.2
+354.2
-136.7
% +/-33.7%
-33.5%
+89.0%
-7.4%
B. Senior College Funding by Source 1991-2005
$, millions
State Aid
City Support
Tuition & Other Revenue
Total
1,025.8
70.8
298.8
1395.4
Change
1991-2005
2005
1991
Percent
73.5%
5.1%
21.4%
100.0%
$, millions
641.9
32.2
571.4
1,245.6
Percent
51.5%
2.6%
45.9%
100.0%
$ +/-383.9
-38.5
+272.6
-149.8
% +/-37.4%
-54.4%
+91.2%
-10.7%
C. Community College Funding by Source 1991-2005
$, millions
State Aid
City Support
Tuition & Other Revenue
Total
165.9
195.4
99.1
460.4
Change
1991-2005
2005
1991
Percent
36.0%
42.4%
21.6%
100.0%
$, millions
148.1
144.6
180.8
473.5
Percent
31.3%
30.5%
38.2%
100.0%
$ +/-17.8
-50.8
+81.7
+13.1
% +/-10.7%
-26.0%
+82.4%
+2.8%
Source: "Funding History for the City University of New York, Fiscal Year 1991 to Fiscal Year 2005,"
CUNY University Budget Office, October 2005
All tables reflect dollars adjusted for inflation using the HEPI index.
39
FATAL SUBTRACTION
The changes in CUNY’s funding reflect a dramatic realignment in the burden of public
higher education from the public treasury to individual students and their families, a trend
that began under Governor Mario Cuomo and accelerated dramatically under Governor
George Pataki. It represents a substantial decline in CUNY’s affordability and accessibility,
and may signal a serious departure from its historic role of integrating wave after wave of
new immigrants, poor and working class New Yorkers into the city’s middle class.
CUNY: The Free Academy That Is No More
The Free Academy, which later became The City College, was founded in 1847,
fifteen years before the federal government created public land grant colleges
throughout the country. Its founder, Townsend Harris, hoped the Academy would
“open the doors to all--let the children of the rich and poor take seats together and
know no distinction save that of industry, good conduct and intellect.”
For almost 150 years, the Free Academy/City College, sometimes called the “poor
man’s Harvard,” provided a first-rate, free college education to all who qualified,
regardless of wealth, status, or birthplace. It was funded primarily by New York City,
with some supplemental state aid. Over time, other senior colleges and a number of
2-year community colleges became part of the CUNY system, which grew into the
largest urban university system in the country, with free tuition at all its schools.
When New York City plunged into near-bankruptcy in the mid 1970s, city and state
officials scrambled to find drastic savings in virtually all areas of public services and
infrastructure. Among their biggest targets was city funding of CUNY’s 4-year
colleges, which began to be phased out in 1976. New York State took over major
funding responsibility for CUNY’s senior colleges, with the city continuing to provide
primary funding for the community colleges. With the state’s assumption of financial
responsibility, free education was terminated, and tuition was instituted at all CUNY
schools in 1976 and has been climbing ever since.
Chancellor Matthew Goldstein (himself a graduate of CUNY when it was still tuition-free)
has publicly complained about the loss of state support for CUNY schools and warned that
the state was “slipping mightily” in its ability to prepare workers. But he has been
remarkably quick to turn to tuition increases as a fix, most recently proposing tuition hikes
of between 10 and 13% over four years, that, amazingly, seek to equalize tuition for the
four-year and two-year colleges (by increasing the tuition for the latter), as part of a fouryear master plan to improve the quality of CUNY’s colleges and to ensure their financial
stability. 63
40
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The State of Need-Based Student Financial Aid
While no-string-attached institutional subsidies continue to flow to private colleges and
universities through the state’s Bundy program, public aid to individual students, especially
poor and working class students, has become far more restrictive at the same time it has
failed to keep pace with the cost of education.
The state’s flagship Tuition Assistance Program (TAP) is a case in point. Any New York
State resident with an eligible income attending college in the state, be it public or private,
non-profit and for-profit, can qualify for a grant, with the amount of the award varying by
both income level and educational costs.
When this program began in the 1970s, the maximum grant for poorest students covered
60% of the annual cost of a private four-year college. By 2001-02, the maximum grant had
shrunk to just 25% of the annual cost.64 Although the state Legislature increased the
minimum and maximum TAP awards (to a $500 minimum and $5,000 maximum awards)
and raised the income eligibility bracket from $50,000 to $80,000 in 2000, these changes
have not kept up with the soaring costs of higher education. According to the New York
Public Interest Group (NYPIRG), since academic year 1995-1996, TAP’s maximum grant
has increased by 21% while tuition costs have risen 64% and fees have skyrocketed
150%.65
Governor Pataki and the state Legislature have also placed new restrictions on the
number of semesters students are eligible to receive TAP awards and imposed a
minimum “C” average requirement for recipients. Only full-time students are eligible for
TAP, which significantly restricts its availability and usefulness to low-income and
community college students, who are more likely to have to work and attend school on a
part-time basis. Further hurting these students, the state grant program specifically
targeted to community college students, Aid to Part-Time Study (APTS), receives just a
fraction of the funds that TAP gets ($14.6 million in 2005 for APTS, as compared to $906
million that year for TAP) and still requires students to be enrolled at least half-time (more
than six units), a condition that can present an impossible hurdle to poor working students.
41
FATAL SUBTRACTION
The governor’s proposed budget for 2006-07 sought to cut $189.9 million from TAP and
raise minimum course-load eligibility from 12 to 15 credit hours per semester, with
students earning fewer than 15 credits receiving a 20% reduction in their tuition assistance
award. These restrictions on part-time working students fly in the face of modern
economic realities that require more students to work in order to attend college and to take
longer than the standard two or four years to complete their degrees. They are punitive to
precisely that segment of students who need and should receive the most assistance and
time. In addition, the governor’s budget again proposes to withhold half of the TAP award
each year until the student graduates, which would make it yet more difficult for poor and
working class students to finance the cost of higher education.
In light of reduced funding for student aid, it is ironic that one area in which restrictions are
only now being imposed and further discussed is the fast-growing and seriously underregulated “cottage industry” of commercial profit-making colleges, which target their heavy
advertising efforts at poorly educated students, promising them career training and jobs.
There are now 41 degree-granting for-profit colleges in New York and about 400 for-profit
“career schools” that do not award degrees. The New York State Board of Regents
recently imposed a moratorium on new commercial colleges, while Governor Pataki has
proposed denying state financial aid to college students who have not graduated from high
school, many of whom attend such schools. At a time when student enrollment in these
institutions is exploding, at least five of them have come under close scrutiny for problems
ranging from falsely certifying student eligibility for financial aid to failing to provide
adequate academic support to its students. These problems are magnified by the fact that
although enrollment in profit-making colleges is only 7% of statewide college enrollment,
their students are receiving 17% of state-funded financial aid.66
Also noteworthy is the lack of parity among the other state-funded student aid programs
that provide academic and mostly non-tuition financial support to disadvantaged students.
For 2003-2004, for example, the Higher Education Opportunity Program (HEOP), which
provides assistance to students at private colleges, received greater public funding and
served fewer students than either equivalent program available to students at the city and
state public university systems,67 revealing a strong bias in favor of aiding students who
attend private rather than public institutions. (See Table 7, below.)
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Table 7
Funding Levels & Types of Recipients of NYS Financial Aid Programs
FY 2003-2004
Program
Institution Type
State Budget
SEEK
CUNY Senior
College Discovery CUNY Community
Subtotal CUNY
EOP
EOP
Subtotal SUNY
SUNY Senior
SUNY Community
HEOP
Private Colleges
$14,600,000
$764,000
$15,364,000
(break down n/a)
(break down n/a)
$16,400,000
$22,000,000
# Students
7,820
2,450
10,270
7,509
2,850
10,359
5,175
Source: NYPIRG, NYSED, New York State Budgets, Division of Budget
SEEK (Search for Education, Elevation and Knowledge) and College Discovery provides
counseling, tutoring and non-tuition financial aid.
EOP (Educational Opportunity Program) provides special tutoring, academic, career, and
personal counseling, as well as financial aid to help with the cost of room, board, tuition,
books and personal expenses.
HEOP (Higher Education Opportunity Program) provides funds for special testing, counseling,
tutoring, remedial courses and financial assistance.
The decrease in per student aid available to poor and working class students and the
addition of onerous time restrictions and other stringent requirements for eligibility, along
with significantly reduced public funding for the state and city public university systems
and increased tuition and fees, add up to a short-sighted, self-defeating policy that will not
only disadvantage individual students in New York City and state, but restrict opportunities
for entire groups of New Yorkers, while shrinking the trained workforce necessary for
private business and participants in local government, politics and civic life.
Years of disinvestment in local public higher education have occurred at the same time
that many of the largest, best endowed, and most elite private universities in New York
City and elsewhere are clamoring for and receiving bigger shares of public subsidies and
funds, while raising their tuition and fees to stratospheric levels. Moreover, according to a
recent study of grants by 1,000 foundations, more and more private giving is going to
prestigious private universities: 14 of the top 20 grant recipients between 1992 and 2001
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were elite universities, with one of every four grant dollars awarded to top colleges and
universities, compared to one in ten dollars to non-profit human services organizations.68
Meantime, at CUNY, decreased public funding has resulted in a significant reduction in the
amount of funds it spends for instruction: down to only 13.4% on a student FTE basis,69
despite this being the university’s very purpose for existing. According to CUNY’s
chancellor, between 1989 and 2001, the percentage of full-time faculty at its community
colleges was reduced from 54% to 43%, resulting in an “excessive dependency on
adjuncts [which] negatively impacts the quality of the students’ educational experience,”
and remains painfully short of CUNY’s stated goal of having “at least 70% of instruction
provided by full-time faculty.”70 CUNY’s Professional Staff Congress (PSC), the union
representing 20,000 CUNY faculty and staff, has long criticized this trend, and continues
to try to reverse it.
Workforce Development Initiatives
One area in which CUNY is having a growing impact on the city is its expanding role in
workforce development in the city. Through a variety of programs based at individual
colleges or run through the central administration under the two-year old School of
Professional Studies, CUNY now provides an array of programs tailored to job training,
work skills improvement and career pathways. Such workforce development initiatives
focus on three basic areas: 1) adult education; 2) worker education/training for
government, unions, private companies and industries, and non-profits, frequently through
business- or public-sector contracts; and 3) welfare-to-work services.71 While some
programs have been in existence at different CUNY institutions for many years, they have
grown in number and importance recently.
According to Chancellor Goldstein, “workforce training is now a university-wide priority.”72
Many of these programs are funded either by private employers or government agencies,
with some foundation funding, and are becoming an important source of revenue for
CUNY. CUNY has been criticized, however, for its failure to integrate workforce programs
into its major educational mission by making them part of its credit-offering and degreegranting programs, as NYU’s School of Continuing and Professional Studies has
increasingly done.73
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Whither Goes CUNY?
Public funding cuts for public higher education have occurred during a period in which
New York City has experienced explosive growth in the number of new immigrants,
coupled with the weakening or decline of older, established institutions, including
Tammany Hall, trade and industrial unions and the Catholic Church, that city historians
have traditionally credited with providing pathways to the middle class for immigrants and
poor New Yorkers.74 If allowed to continue on its current course, this disconnect will not
only drastically restrict opportunities for hundreds of thousands of city residents, it will
have an enormous negative impact on the quality of New York City’s workforce and
economy, as well as its civic, political and social fabric.
The combination of reduced public funding and rising tuition and fees at CUNY may
represent two prongs of an overall strategy to transform CUNY from an institution
committed to educating “the children of the whole people,”75 to one that more closely
resembles the traditional private model of higher education: leaner, meaner and more
exclusive, a more highly competitive, corporate-oriented institution with a greater ability to
attract top students and top dollars from undertapped portions of the private sector.
This longer-term battle for the soul of CUNY reached a boiling point in the late 1990’s,
when Mayor Rudolph Giuliani engineered an abrupt end to the nearly 30-year-old
experiment of “open admissions,” under which every graduate of a city high school with an
80 (or higher) average was assured a place in one of CUNY’s senior colleges (and those
with lower averages, a place in a community college). Under Giuliani’s prodding, CUNY
also abolished remedial education in its four-year colleges and restricted its availability to
one year in community colleges, actions that epitomized the mayor’s (and others’) false
but convenient dichotomy between the paths of wider student access and academic
excellence for CUNY.
In 2001, CUNY began an Honors College program located on seven campuses and
serving over 1,000 students. Admission is highly competitive, with the program attracting
top graduates from the city’s premier high schools. This program has raised $20 million
in private funding, which CUNY claims covers much of its costs. While the Honors
College student body resembles the general CUNY student body in terms of gender (2/3
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are women) and immigrant status (3/4 are immigrants or children of immigrants), it is very
different in terms of race and ethnicity: 16% of Honors students this year were black or
Hispanic, compared to 44% of the students at the seven undergraduate schools where the
honors programs are located; likewise, a higher proportion of Honors College students are
white and Asian than their peers at the host schools. 76 The program has attracted strong
support, as well as serious criticisms for its insularity on the campuses where it is located
and its disproportionately large funding.
While a full analysis of open admissions and remediation policy is well beyond the scope
of this report, it bears noting that the transformation of CUNY from a free, open academy
to an institution that charges tuition, imposes more restrictive admissions standards, and
provides far less remediation and other support services occurred after more than 20
years of declining public financial support and a drastically increased reliance on
underpaid and non-career-track part-time and adjunct faculty.
Just as open admissions itself was the product of the mass political, social and economic
struggles of the 1960’s and ‘70’s, its termination and the imposition of restrictive new
directions are the result of triumphant political and economic forces that favor lower taxes,
smaller government and privatization. The decline in public funding for CUNY and rising
tuition at CUNY and SUNY, which were accompanied by an assortment of state and city
tax cuts primarily for wealthy individuals and corporations, have occurred at the very time
when New York State has achieved the dubious distinction of having the highest income
gap in the nation, with the average income of the top 20% of state families (at $130,431)
8.1 times higher than the average income of the lowest 20% (at $16,076).77 The income
gap in New York City is even larger and without public intervention will likely widen further.
Full funding for CUNY and fair and open admissions policies would provide one hedge
against this disastrous direction.
The CUNY administration’s apparent embrace of higher tuition and other policies that
place obstacles in the paths of low income, working, and head-of-family students has met
with strong opposition from CUNY students and the Professional Staff Congress, the
20,000- strong union that represents CUNY faculty and staff. As one of the architects and
chief defenders of open admissions put it during the battle to end open admissions: “For
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all its shortcomings, City University is the social engine of the city. The attempt to convert
it into Swarthmore or Harvard is ridiculous, and is not what people of New York need.”78
Just a few weeks before Chancellor Matthew Goldstein recently revealed his multi-year
plan to raise CUNY tuition annually on a consistent basis, City College announced that Dr.
Andrew Grove, a founder and retired chairman of the Intel Corporation, had made a $26
million gift to his alma mater, City College, the largest gift ever received by any CUNY
institution. Grove attended City College as a newly arrived immigrant from Hungary, when
it was still free, and graduated at the top of his engineering class. In an interview about
his donation, Dr. Grove called City College “an American dream machine” and observed
that without stronger support for it and places like it, the United States would lose its
middle class and become “a country of educational haves and have-nots.”79
The question begging an answer from CUNY’s current leadership--and state and
city budget-makers--is whether CUNY’s direction and public funding levels will
result in growing the number of educational haves--or have-nots?
PART IV PROFILES IN PROFIT: NYC’S TOP PROPERTY-OWNING UNIVERSITIES
Cooper Union and the Chrysler Building: Blind Benevolence
The next time you gaze with awe at the graceful profile of the Chrysler Building, especially after
dusk when its spectacular spire is magically back-lit, think about this: you might as well own it,
because you’re paying for it lock, stock and barrel. The reason for this is more bizarre than fiction,
known only to a small number of New York City history buffs and budget wonks.80
Since its completion in 1930, the magnificent, hugely valuable, wholly commercial Chrysler
Building has not paid one cent in property taxes to New York City. But that’s only half the
story. Every year, an amount equal to the real estate taxes the building would pay if it were on the
city’s tax rolls is collected from the commercial tenants and put into the coffers, not of New York
City, but of Cooper Union, a private non-profit university that owns the land beneath the building.
And this unique situation applies to two other completely commercial properties that Cooper
Union owns.
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How much tax revenue does the city lose, and Cooper Union gain, from the Chrysler Building? In
FY 2005, this bizarre and antiquated arrangement cost New York City exactly $17,410,972
in lost tax property revenues. 81 And the amount just keeps climbing. Just over a decade ago, in
1994, the Chrysler Building’s tax exemption cost New York City $8 million in revenues.
Peter Cooper, the self-educated industrialist and philanthropist, founded Cooper Union (full name:
The Cooper Union for the Advancement of Science and Art) as a tuition-free institution in 1859
under a charter given to him by the New York State Legislature. One section of the state charter
provided that property owned by the new institution would not be subject to taxation if it were used
for its chartered educational purposes, a situation that eventually became the general tax rule for
all non-profit education properties and was enshrined in the state Constitution in 1938.
But Cooper Union’s actual property tax situation is a far cry from this universal rule. The institution
is a private college uniquely authorized to charge, collect and keep property taxes from the
Chrysler Building and two other wholly commercial properties, all of which are used for purposes
totally unrelated to the institution’s core exempt educational mission. Cooper Union itself
sometimes calls these payments “tax-equivalency charges,” notwithstanding that the properties
are tax exempt. That one of them happens to be the iconic Chrysler Building makes this singular
arrangement all the more remarkable--and unfathomable.
Cooper Union has always been a small (fewer than 1,000 students), highly competitive private
college for architecture, engineering and art. It continues its historic tuition-free policy for all
students, currently worth over $26,000 per student per year, which is provided with no
consideration of financial need.
Currently, slightly over 47% of Cooper Union’s students are New York City residents, compared to
CUNY’s 83+%. The irony of this situation is stunning: New York City taxpayers are providing a
free education to 955 students without any regard to economic need at the privately owned
Cooper Union, while tens of thousands of students struggling financially at the city’s own public
university are being charged ever-increasing tuition and fees.
Shortly after the Chrysler Building’s completion, New York City in 1931 tried to impose property
taxes, but Cooper Union successfully mounted a legal challenge and the building remained off the
city’s tax rolls, even as its value continued soar.
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Despite the city’s chronic fiscal problems, it appears that no further action was taken to try to
reverse the Chrysler Building’s aberrant tax status until 1969, when Mayor John Lindsay pressed
the state Legislature to amend Cooper Union’s charter for the explicit purpose of eliminating the
Chrysler Building’s tax exemption. But in a series of classic Albany back-room maneuvers, the
Legislature passed and Governor Nelson Rockefeller signed a bill that left the unique tax-exempt
status of the Chrysler Building and two other Cooper Union commercial properties intact and
instead mandated normal exemption restrictions only on future commercial property purchases or
uses. Thus, despite the prevailing rule of New York property tax-exemption law that requires nonprofit owners of properties used for profit-making commercial purposes to be fully taxed at the
appropriate tax rate (or taxed on a pro rata basis for mixed purposes which include an exempt
use), the spectacular Chrysler Building and two other properties to this day continue to be taxexempt while generating enormous revenues for Cooper Union.
The legal basis for sustaining the 1859 charter-based tax status of Cooper Union’s three
commercial properties is shaky. It has, in fact, been attacked in written memoranda by at least
one New York State Attorney General (the legendary Louis J. Lefkowitz) and at least two
attorneys for New York State’s Division of Equalization and Assessment, the agency charged with
supervising property assessments throughout the state, once in 1980 and again in 1994. Despite
this, no legal or political challenge has been made to it since 1969.
Pouring salt on the wound from the Chrysler Building’s tax exemption is the continued exemption
and collection of “tax equivalency” charges for two of Cooper Union’s other current real estate
ventures. These involve two of the institution’s tax-exempt but revenue-generating commercial
properties located in the heart of the trendy East Village, both of which are now undergoing highend, large-scale market redevelopment by private developers for the specific purpose of
generating much higher revenues for Cooper Union, which will retain title to the properties and
collect both tax equivalency payments and rents from the new uses. The city will not capture one
red cent from the hugely increased value of these properties. No wonder that, in 2003, after the
Bloomberg Administration increased property taxes by 18.5%, Cooper Union’s Treasurer and
Vice President for business affairs endorsed the increase, saying “It’s the city’s system. We think
it’s good for us.”82
On its website, Cooper Union publicly bemoans the declining percent of support that “payments
from commercial buildings such as the Chrysler Building” are providing for institutional operations,
but details and touts its current plan to “maximize returns on other real estate assets, which
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represented significant untapped commercial potential.” This, despite its simultaneous
acknowledgement that it has “received record contributions during the last three years, averaging
$15 million in gifts annually.”
With the city facing recurring budget deficits, and with public elementary, secondary and higher
education costs rising without adequate revenues to fund them, we think it’s time for city residents
to demand answers to these questions:
1) why isn’t the city aggressively seeking--through legislation or litigation--to restore the
Chrysler Building and Cooper Union’s two other commercial, profit-making properties to the tax
rolls, so they receive the same tax treatment as all other revenue-generating properties owned by
higher educational institutions (and other non-profits);
2) would the state Legislature refuse to repeal the unique and aberrant tax status for the
Chrysler Building and two other Cooper Union properties that it re-affirmed in 1969 if the city so
requested;
3) why are New York City’s crusading media not reporting on and editorially demanding
reform of the astonishing tax-exempt status and tax collection privileges of Cooper Union?
Columbia University: “Who Owns New York?”
Columbia University is the oldest higher education institution in New York State and the fifth
oldest in the nation. Founded by royal charter from the King of England in 1754, it was originally
called King’s College and its original insignia was a small crown. Closed during the American
Revolution, it reopened in 1784 under the name Columbia, with the royal crown intact as its logo.
The crown remains its insignia.
From its beginning in Lower Manhattan next to Trinity Church, where its first classes were taught
by Samuel Johnson, there was nothing terribly modest about the institution. Its original selfproclaimed mission was to provide future colonial leaders with an education designed to “enlarge
the Mind, improve the Understanding, polish the whole Man, and qualify them to support the
brightest Characters in all elevated stations in life.” 83
Perhaps the vestiges of immodest goals mixed with its royal heritage accounts for Columbia’s
fight song, that goes:
Oh, who owns New York, oh who owns New York?
The people say,
Why we own New York, why we own New York,
C-O-L-U-M-B-I-A!
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Since its colonial beginnings, Columbia has had an intricate, significant and sometimes fractious
history with its host city and the neighborhoods it dominates. Columbia takes credit for “quite
literally … shap[ing] the city,” through, among other things, educating 15 men who went on to
become mayors of New York and, more recently, requiring its engineering, law and graduate
teaching students to provide pro bono services to various local public and non-profit institutions.
But at the same time, its current mission statement seems to emphasize its goal of being
recognized as a leading world university and of having a broad international impact. 84
According to Columbia, for Fiscal Year 2003-2004, its capital spending included $143.7 million in
new construction and an additional $145.5 million in property renovations. Its operating budget for
the fiscal year ending June, 2004 was just under $2.190 billion, while its revenues amounted to
over $2.198 billion.85 Its single largest source of revenues (published before its recent receipt of a
$200 million private donation) was government grants and contracts, which contributed 26%,
followed by tuition and fees (20%), “medical faculty practice plans” (16%), “other educational and
research activities” (13%), “private gifts, grants and contracts” (11%), which was matched by
“investment income and gains utilized” (also 11%), with 4% listed as “other” revenues.86 The
diversity of Columbia’s revenue sources reveals an institution with a strong and successful
entrepreneurial approach to revenue generation.
Tuition and fees for Columbia undergraduates during the 2005-06 academic year were $33,246,
excluding room and board; tuition and fees for its affiliate, Barnard College, are $30,676.
As the only Ivy League university in New York City, Columbia has always been a magnet for
attracting non-New Yorkers as students. Its undergraduate student body of just over 8,300
includes only 2,187 or 26.3% New York City residents, which is exactly the same ratio for its
various professional schools. The ratio of city to non-city residents improves with its larger body of
graduate students, of whom almost 35% are city residents. Overall, of Columbia’s total student
enrollment of 23,234 (not including its affiliates Barnard and Teachers College), 31% are New
York City residents, a proportion that is lower than the overall rate for private colleges and
universities in the city. (See Appendix A.)
In terms of racial/ethnic breakdown, 7% of undergraduates and 6% of graduate students are
African American, 17% of undergraduates and 9% of graduates students are Asian, and 7% of
undergraduates and 4% of graduate students are Hispanic/Latino.87 (The percentage of white
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students is not given, although it seems safe to assume that 69% of undergraduates and 81% of
graduate students are white.) (See Table 5.)
The King of Real Estate
Columbia University is the undisputed king of property empire builders, owning a far greater
number of properties than any other college or university in New York--over 2 1/2 times more than
NYU, its closest competitor, although this has not always been the case. (See Table 8, below.)
Together, the 276 Columbia-affiliated properties (including those of Teachers College and
Barnard) are worth more than $791.7 million and cost the New York City over $79 million in
lost property tax revenues in 2005 alone. (See Table 4; Appendix B; and Appendix F, Property
Holdings of Columbia University and Affiliates, p. 104.)
And, alone among all the private colleges and universities in the city, a significant majority of
Columbia’s properties are non-educational or extra-educational in nature and use. As of the FY
2005 property tax rolls, Columbia alone owned 261 properties (excluding those of its two
affiliates), only 31 of which are classified by DOF as educational properties. Of the balance,
143 or 55.4% were listed as “faculty & student housing,” which, as discussed above,
overwhelmingly denotes traditional apartment buildings and/or individual housing units (like
condos) that provide permanent, year-round housing to university-affiliated residents, most of
whom a re faculty members. The remaining 84 were classified as “student dorms.” And as many
New Yorkers and virtually all residents of Harlem know, Columbia’s overall property holdings,
including its housing inventory, are on the verge of exploding in a new neighborhood,
Manhattanville, which would be the third community it takes dominion over.
Just over a decade ago, in Fiscal Year 1992, Columbia’s exempt properties (excluding those of
Barnard and Teachers College) cost the city treasury $13,775,046, while by 2005, tax losses from
Columbia’s properties (also excluding Barnard and Teachers College) had soared to
$61,217,801.This represents an astonishing increase of more than 344% in tax
expenditures in less than 15 years.
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Table 8
COLUMBIA & NYU
COMPARISON OF PROPERTIES & TAX EXPENDITURES
FY 1992 AND FY 2005
COLUMBIA*
All Categories of Properties
FY 1992
NYU
FY 2005
FY 1992
FY 2005
Total No. of Properties [1]
n/a
261
n/a
105
% of Total UniversityOwned Properties
n/a
36.9%
n/a
14.8%
Total Assessed Value [2]
% of Total Assessed Value
of University-Owned Properties
Total Tax Losses [3]
% of Total Tax Losses from
University-Owned Properties
$153,896,940 $623,558,768 $177,864,252 $503,303,875
16.5%
23.9%
19.0%
19.2%
$13,775,046
$61,217,801
$17,204,507
$42,133,034
15.2%
22.9%
18.9%
15.8%
n/a
143
n/a
24
$62,542,044 $138,399,486
$45,403,689
$76,754, 746
Faculty & Student Housing
No. of Properties [4]
Assessed Value [5]
Tax Losses [6]
% of Total Tax Losses
$4,665,930
$15,973,945
$4,036,689
$8,735,312
44.0%
46.8%
38.1%
25.6%
* Figures do not include Columbia-affiliated universities.
[1] There were 706 properties owned by private higher education institutions based in NYC FY 2005
[2] Total assessed value of all university-owned properties in FY 1992 = $934,795,421; in FY 2005 =
$2,613,332,458
[3] Total tax losses from all university properties in FY 1992 = $90,859, 046; in FY 2005 =
$266,795,568
[4] There were a total of 211 such properties in FY 2005, including apartment buildings and
individual co-op units.
[5] Total assessed value of faculty and student housing properties in FY 1992 = $128, 473, 177; in
FY 2005 = $394,417,983.
[6] Total Tax Losses from university-owned faculty and student housing (excluding student dorms)
in FY 1992 = $10,597,758; in FY 2005 = $34,092,196.
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Columbia’s Manifest Destiny
Columbia moved uptown to what became its main campus in Morningside Heights in 1897 and
began to spread out from there. Columbia’s major existing property holdings are currently
Sunspots and Subsidies:
How New Yorkers Paid to Revitalize Columbia University’s Economics Department
A New York Magazine article* in the fall of 2005 provided a lively description of how Columbia
University jolted its weak, rusty economics department out of the doldrums and into a hot,
newly competitive status. It did this by hooking Professor Michael Woodford, the author of the
novel “sunspot” theory of economics, and using his hiring as a practical application of his theory
to the goal of revitalizing Columbia’s entire department.
Woodford’s sunspot theory posits that economies (or in this case, an academic department)
stuck in a rut require jumpstarting through a broad and fast change of mind that creates a
self-fulfilling expectation of improvement. The impetus for such a wide change of expectations
can be almost anything--including a spot on the sun--as long as it generates a big push, as
opposed to incremental change. In the case of Columbia’s economics department, the
precipitating event was the hiring of Woodford himself, which led to the quick, attraction of
seven outstanding young economists from major universities across the country.
Columbia’s application of an esoteric economic theory to the rebuilding of its own economics
department made for an instructive read. Particularly eye-opening--and relevant to this report-were the practical considerations that influenced Professor Woodford to serve as the magnet to
attract his colleagues, and that, in turn, solidified their decisions to join him at Columbia.
These factors included Columbia’s provision of prime, well-below-market-rate housing, its own
private prep school, high level jobs at Columbia and elsewhere in New York City
obtained through the university’s clout and substantial network of contacts, and the city’s
“energy.” For Prof. Woodford, the decisive consideration was reported to be Columbia’s offer of
a spacious penthouse within walking distance of the campus, a place described by a high-level
Columbia official as “one of the premier apartments at Columbia.” For his colleagues,
subsidized housing, an excellent subsidized private school and the other perks, in varying
degrees, provided ample impetus.
Although the article notes that “most of Columbia’s faculty receive a university-owned apartment
at a highly subsidized rate,” it fails to state exactly who is paying for those subsidies. That would
be the taxpayers of New York City, not Columbia University, primarily (though not exclusively)
through property tax exemptions for the Columbia-owned housing. And it is city taxpayers
who are also subsidizing Columbia’s private prep school for the children of its faculty living in
subsidized housing.
New York City’s high energy, another stated faculty enticement, is also provided by city
residents and taxpayers, though it’s harder to quantify.
* Noam Schreiber, “Freakonomizing,” New York Magazine, October 10, 2005.
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centralized in three neighborhoods: Morningside Heights/Harlem, the home of its main campus for
undergraduate, graduate and several professional schools; Washington Heights in northern
Manhattan, where its medical college, hospital center and related facilities are congregated, and
a neighborhood called Manhattanville. Its current property holdings and planned acquisitions are
graphically illustrated in a building-by-building, block-by-block fashion in three maps
corresponding to these neighborhoods that are posted on its website. (See also Appendix F.)
Despite its vast real estate holdings, Columbia has long complained about its shortage of space,
frequently using a chart that compares its alleged 326 square feet of space per student to the 800
or more square feet per student owned by its self-proclaimed rivals Yale, Princeton and
Stanford.88 Columbia acknowledges that its “space needs have necessitated the development of
approximately one million square feet every five years since 1994.89
Most of Columbia’s recurring town-gown problems center on its efforts to acquire new property to
fulfill its perceived needs for additional academic, research, housing and other facilities. The
university’s current Manhattanville expansion and development project targets an area of West
Harlem, which is bordered by 125th Street to the south, 133rd Street to the north, Broadway (and
part of Old Broadway) on the east and 12th Avenue/Riverside Drive on the west. Columbia is
estimated to now own about 60% of the properties in the area, but says it requires rezoning of the
entire area and acquisition of much of the rest of the area’s properties, including occupied
commercial and residential properties.90
Its Manhattanville project represents Columbia’s largest and most ambitious expansion in its 250year history and is likely to prove its most contentious. If fully implemented, it would literally and
permanently change the face of this area and probably the surrounding areas of Harlem.
According to the university, the entire project is slated to cost $5 billion and take 25 years to
complete. Components of the expansion include a new campus with a bio-tech research center,
additional classrooms and administrative offices, art and performance spaces, underground
parking and loading facilities, and student and faculty housing.
The project may include a bio-terror research facility for government-funded contracts, which
Columbia is already seeking in conjunction with a consortium of other institutions. A 2003 article
in The Scientist by Peg Bricken, subtitled “US universities competing for plum designations as
bio-terror research centers,” reported that Columbia University and the New York State
Department of Health’s Wadsworth Center are leading a large collaboration of universities and
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research institutes in a regional effort to gain bio-terror research funding on behalf of New York,
New Jersey and Connecticut.
Columbia touts the broad economic benefits of the project, claiming it will create thousands of
temporary construction jobs, and generate construction revenues of $122 million for the city and
$94 million for the state. It also says that it will create 14,500 permanent jobs in the area, many for
community residents, and that “operating expenses” will generate tax revenue of $33 million for
the city and $29 million for the state every year, from unspecified sources.91 Columbia neither
mentions nor quantifies the loss of current city property tax revenue if it succeeds in evicting the
hold-out commercial businesses and private housing, much less the permanent loss of property
taxes from all the property it has already acquired and plans to build and develop in the area, or
the many community impacts.
Organized community opposition centers on Columbia’s plan to acquire and evict existing
residential tenants and commercial businesses and demolish these buildings, possibly through
the use of eminent domain; safety concerns arising from the planned bio-tech/bio-hazard center;
as well as support for a competing community-initiated and -approved development plan for the
area. While university officials describe the area as blighted and undeveloped, its long-time
business owners, residential tenants and others regard Manhattanville as a viable mixed-use
community with affordable housing and a well-developed moving and storage industry that
depends for its existence on its proximity to the West Side Highway, all of which they believe
merit preservation and improvement, rather than demolition and displacement.
Four of the apartment buildings targeted by Columbia for demolition are owned by the city’s
Department of Housing Preservation and Development (HPD) and provide affordable housing for
low-income tenants, an increasing rarity in this city. After at least 18 months of largely secret
negotiations between representatives of Columbia and HPD, the agency has approved
Columbia’s takeover and demolition of all four buildings and issued detailed guidelines for how
the process of relocating tenants should proceed. The university has now publicly committed to
finding replacement housing for displaced residents, but tenants remain skeptical and anxious.
Other residents of the neighborhood and immediately surrounding areas fear their own ultimate
displacement from their homes as a more indirect, but nonetheless real, result of Columbia’s
expansion, which will add fuel to the fire of already blazing Harlem property values and escalating
rents. As the president of a nearby 1,200-apartment project that recently opted out of the
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subsidized Mitchell-Lama program put it, “All I can see is disruption of a community we worked
damn hard to build, to keep safe, clean and affordable.”92
You don’t have to be of “a certain age” to recall the 1968 mass student takeover of Columbia’s
main campus, but it helps. The underlying reasons for the protests of almost forty years ago bear
a striking resemblance to the causes of the growing community opposition to Columbia’s current
Manhattanville project.
The 1968 student sit-in, which temporarily shut down the university, was fueled by community and
student opposition to Columbia’s plans to expand deeper into Harlem and build a private
university gym in city-owned Morningside Park. Also at issue was Columbia’s involvement in
military research associated with the Viet Nam war, with students specifically demanding that the
university end its affiliation with a Pentagon think tank and terminate various defense-related
research contracts. Although--or perhaps because--the student takeover ended in the mass
arrests of hundreds of students (which were choreographed by Columbia’s President, Grayson
Kirk, and accompanied by significant police misconduct televised on national and local news), the
students ultimately succeeded in achieving their demands. Columbia renounced its plans for the
Morningside Park gym, ended certain classified research projects on campus, and the unpopular
university president resigned.
Today, even more than in 1968, Columbia’s physical expansion plan itself is unifying concerns
about community displacement with opposition to the university’s potential involvement with warand bio-hazard-related government research contracts.
In its early outreach and planning efforts around the Manhattanville project, Columbia made
efforts to distance itself from the bad old days of 1968 by creating a community advisory council
and frequently attending and participating in meetings of local Community Board 9. It also
maintains on its website a community-oriented component called simply
“neighbors.columbia.edu,” which presents a face of university transparency and community
concern.
Early in the process, Columbia’s new president, Lee C. Bollinger, declared, “I have done
everything I can to put the ghost of the gym behind us,” and “Columbia is a different neighbor
now.”93 But whatever the initial community reaction to the plan, this view is hardly shared now by
the diverse and growing opposition to both the plan and the way in which Columbia is seeking to
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implement it.
A series of missteps by Columbia since the public announcement of the plan has galvanized an
organized opposition that now includes area business owners (united into the West Harlem
Business Group), residents of the targeted area facing direct displacement by demolition of their
buildings, and other community residents and activists of nearby surrounding areas of Harlem
who fear secondary displacement through rising housing costs, as well as the loss of the diverse
nature and community feel of their neighborhood (the Coalition to Preserve Community),
Community Board 9, the local official planning board, a growing number students (the Student
Coalition on Expansion and Gentrification) and individual members of Columbia’s faculty. Despite
different priorities and emphases, these groups have begun to coalesce into a unified front,
increasingly engaging in joint events and community and press outreach.
Some of Columbia’s blunders include: contradictory public statements and private actions, an
inadequate Environmental Impact Statement that failed to address community safety concerns
about planned bio-tech and bio-hazard research in a densely populated area, as well as the
prevention of primary and secondary commercial and residential displacement.
Adding heat to the controversy, Columbia University’s application in late 2005 to the Dormitory
Authority of the State of New York (DASNY) for a $500 million tax-exempt bond issue to pay for a
large chunk of its acquisition, demolition and redevelopment costs for the Manhattanville project
also raised community ire that Columbia, an institution with a $2 billion operating budget, was
seeking even deeper public handouts. But topping all of these missteps was Columbia’s secret
expedition into the latest and hottest national political third rail: the use of the extraordinary public
power of eminent domain to benefit private development, which was recently and narrowly upheld
by a 5-4 vote in the U.S. Supreme Court decision Kelo v. New London.
Notwithstanding Columbia’s public claims that the university was committed to buying the private
properties it claimed to need through negotiating fair purchase prices with their owners, in July,
2004, the university secretly submitted an official written request to the Empire State
Development Corporation (ESDC) to consider using its power of eminent domain to engineer
Columbia’s Manhattanville expansion. Columbia paid ESDC, New York State’s most powerful and
aggressive development authority, $300,000 as a down payment toward any expenses it might
incur in the process and assumed full liability for any lawsuits that might be brought against ESDC
relating to Columbia’s project. Columbia’s letter described the purposes for which eminent domain
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might be used as assisting its development of “facilities to be used for academic, administrative,
student and faculty residences, retail, parking, on-site energy, open space, a hotel and other
related ancillary uses and public amenities.”94
Columbia’s eminent domain request and preliminary agreement with ESDC remained secret until
it was disclosed by The Spectator, Columbia’s undergraduate student paper, in April, 2005, after
the paper obtained the document through a Freedom of Information Law request. The discovery
turned a deteriorating situation poisonous. With state legislatures across the country seeking to
limit government’s use of eminent domain to seize properties for private economic development
purposes,95 Columbia’s timing could not be worse. Nor, in fact, could its cause--since the
development Columbia contemplates, contrary to the one approved by the Supreme Court for
New London, will take properties off the city’s property tax rolls, rather than enrich them.
Finally, framing and intensifying Columbia’s other gaffes is the issue of the clash between
Columbia’s Manhattanville plans and the community’s own official, comprehensive local land use
and development plan (called a 197-a plan, after the section of the Uniform Land Use Procedure
Law that empowers such local planning). It took some 15 years for Community Board 9, along
with many community members and organizations, to produce, review and unanimously approve
this plan. The community plan contains recommendations for zoning changes that would
encourage residential and business development without displacing the current commercial and
industrial businesses, and addresses mitigation of predictable secondary displacement that any
substantial university expansion or other private development would generate. It also calls for the
establishment of environmentally friendly construction guidelines, as well as pedestrian-friendly
improvements, and the integration into the community of the new city-state park along the Hudson
that is in its infancy. Finally, it would specifically outlaw the use of eminent domain for any
development in the area.
In October, 2005, the New York City Planning Commission gave its initial approval to this
community plan. Many in the community believe that this plan could accommodate reasonable
Columbia expansion if the university were open to real dialogue and compromise. Instead,
Columbia has apparently chosen to ignore this extensive, broad-based effort in community
planning, and seeks to impose its own vision on the community. Columbia’s “all-or-nothing,”
demolition-displacement approach has presented the planning commission with a first: it is
considering the two very different plans simultaneously, while urging the two sides to find
“common ground.”96
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In fact, the combination of a broad and increasingly sophisticated opposition, which is beginning
to attract the support of more elected officials, serious missteps by the Columbia that have
undercut its credibility, its threatened use of eminent domain, and the sheer magnitude of its
proposed expansion could add up to the perfect storm for Columbia, far overshadowing its 1968
crisis. As one community activist succinctly put it, “This is not 1968. This is not about a small land
grab [the gym] with big racial implications. It’s about a big land grab, 18 acres worth with hectares
of class and race consequences.”97
New York University: The Wannabe Empire
NYU has long been Avis to Columbia’s Hertz: it has tried harder than its Ivy League counterpart to
attract students, faculty and prestige. Although it was for decades a commuter school, drawing a
largely local, live-at-home undergraduate student body, in the decades toward the end of the 20th
century, it transformed itself “very quickly from a commuter school to a residential school.”98
As a result of this transformation and its increasing national reputation, NYU began to acquire an
appetite for more space for housing and other facilities. This, in turn, placed it squarely in
competition with Columbia in another fundamental but less positive category: as the source of
considerable community conflict over its real estate expansionism and empire-building, first, in its
original home of the Washington Square area of Greenwich Village, and increasingly, in
neighborhoods beyond. (See NYU’s website at www.nyu.edu for a map of the epicenter of its
property holdings, running from 16th Street to the north, Prince Street to the south, Sixth Avenue
to the west, and First Avenue to the east.)
NYU currently provides housing for more than 11,000 undergraduate, graduate and professional
students, and 2,000 faculty and administrators.99 It has 25 residence halls scattered from East
26th Street to Wall Street, including a 16-story Palladium dorm on 14th Street, which was the site
of one of New York’s hottest and most fabled discos years decades earlier.100
Not that NYU was ever a real estate slackard, either in relative or absolute terms. In fact, in 1992,
NYU was the largest property-owning private university in the city, with 19% of the
assessed value of all university properties, compared to Columbia’s 16.5%, and
accounting for 18.9% of all university property tax losses, compared to Columbia’s 15.2%.
And although Columbia has since far surpassed it in real estate holdings and tax expenditures,
NYU remains in solid second place, separated from its closest competitor by almost $20 million in
tax expenditures. (See Appendix B, and Appendix G, Property Holdings of NYU, p. 114.)
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As of the FY 2005 property tax rolls, it owned 105 properties, with an assessed value of $503,
303,875 and tax expenditures of $42,133,034. Of its properties, 67 or nearly 64% were
educational, almost 23% (24 properties) were permanent residential properties, and just over 10%
(11 properties) were student dorms. More importantly, it is currently planning several major real
estate expansions.
Founded in 1831, NYU has long prided itself on being the largest private university in the country,
with more than 39,000 undergraduate, graduate and professional students enrolled in its 14
schools, colleges, and divisions.101 That NYU has achieved its goal of becoming an nationally
recognized university and attracting students from far beyond New York City is evidenced by the
fact that in 2004, only 15.6% of its overall student body consisted of city residents (see
Appendix A), well below Columbia’s city resident rate. Its growing popularity is also reflected by
the fact that, for the second year in a row, a survey by the Princeton Review ranked it as the top
choice of college applicants throughout the country.102
Tuition and fees vary by specific school or program, but start at $31,690 for undergraduates in
2005-06 and go north from there. In terms of racial/ethnic breakdown, 5% of NYU undergraduates
and 6% of graduate students are African American, 14% of undergraduates and 11% of
graduates students are Asian, and 7% of undergraduates and 5% of graduate students are
Hispanic/Latino.103 Percentages for white students are not given, although it is reasonable to
conclude that about 74% of its undergraduates and 78% of its graduate students are white. (See
Table 5.)
Unlike Columbia, whose literature emphasizes its unique and positive contributions to New York
City, NYU acknowledges the importance of New York City in enriching the university and
attracting faculty and students. But NYU’s relative humility (or reality check) on this score neither
negates nor minimizes its history of past conflicts or current skirmishes with its neighbors.
Although NYU currently lags behind Columbia in real estate empire-building, as with most matters
relating to the highly competitive relationship between the two institutions, NYU is clearly
embarked on a path of real estate catch-up. 104 NYU has long dominated the Washington Square
area of the Village, and has progressively spread its real estate empire to the east, north, south
and west, also spreading community conflicts from its original Greenwich Village neighbors to its
newer neighbors in the East Village and Noho. (It also owns properties well to the south, which
anyone walking on lower Broadway could guess, by the frequent passage of purple buses and
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street car-type vehicles emblazoned with NYU’s name and logo, but since these properties are in
less developed and populated areas, they have not yet given rise to the same degree of towngown conflicts.)
Greenwich Village’s cultural heritage and well-organized and activist citizenry has lent NYU’s
town-gown problems there a special flavor. In addition to common concerns regarding
displacement, gentrification, local employment and community input, issues such as historic
preservation, building height and density, and contextual relationship of new structures to the
surrounding area have fueled opposition to the university’s expansion plans.
In 2003 and 2004, tensions were heightened by two long-planned construction projects on
properties that bordered Washington Square Park (the Kimmel Center, which replaced the
smaller-but-still-outsized Loeb Center, and a new law school building). The majority of residents
found both projects oversized, ugly and intrusive. Provoking special community ire was the fact
that one project resulted in the partial demolition of a building that was home to Edgar Allan Poe.
Between 2000 and 2004, “NYU spent $400 million on construction and renovation, a by-product
of which was noise, grit, street shutdowns and sundry other irritants,” leading many locals to see
NYU as “an institutional King Kong afflicted by an ‘edifice complex.’ ”105
In the midst of this turmoil, John Sexton, formerly Dean of NYU’s Law School, became president
of the university in 2001. Initially, he seemed to signal a change in university-community relations
by publicly acknowledging that NYU had not always been perceived as a good neighbor. Sexton
declared that “the Village is our great asset” and that he recognized the need to protect the
Village’s “fragile ecosystem.”106 He also indicated his intention to work more closely with
neighbors on NYU planning and development issues.107
Nevertheless, community tensions flared again when NYU announced an arrangement with a
private developer to build a 26-story residence for 700 students mid-block on East 12th Street, a
side street that runs between Third and Fourth Avenues, using air rights from an historic post
office, to create what community activists have called the tallest building in the East Village. In
addition to concerns over the building’s height, bulk and high number of occupants, the air rights
transfer raised additional concerns because the post office sold these development rights without
going through a review process required by the National Historic Preservation Act.
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This project catalyzed has strong opposition from residents and community groups, including the
Greenwich Village Society for Historic Preservation. It is viewed as evidence of NYU’s seemingly
insatiable hunger for real estate and as a prime example of its penchant to undertake outsized,
non-contextual, community-unfriendly developments. Exacerbating local hostility is the fact that
the development is going forward at a time when the Department of City Planning has begun a
process to consider the contextual rezoning of the East Village.
The East 12th Street dorm is just the latest piece of NYU’s larger real estate empire dream, the
goal of which is the development of a second campus somewhere between Union Square to the
north, Washington Square to the south, and running through the East Village.108 In pursuit of this
goal, NYU announced toward the end of 2005 that it was establishing a new Campus Planning
and Real Estate team to assess NYU’s space needs and work with its neighbors to fulfill them.
Heading this effort is a new Vice President for Planning, a woman who had been with the New
York City Economic Development Corporation (the city’s equivalent of the state’s Empire State
Development Corporation), where she worked with Deputy Mayor for Economic Development
Dan Doctoroff, the author of the ill-fated, community-insensitive West Side Stadium fiasco.
NYU’s local “second campus” idea is meeting with serious opposition. In mid-February, 2006,
Manhattan Borough President Scott Stringer, City Councilmember Rosie Mendez, Community
Board 3’s Housing and Zoning Committee (Lower Eastside/Chinatown) and Community Board 2
(Greenwich Village) united behind a proposal put forward by a number of community groups that
urges NYU and the city to work together to find locations for one or more secondary NYU
campuses outside of Greenwich Village, the East Village and Noho to avoid saturation
development in these areas. President Sexton himself has stated that NYU has “no need for
adjacency,” indicating his willingness to look beyond NYU’s traditional neighborhood base for
additional space.109 But community groups discovered toward the end of March that NYU is in
negotiations to purchase a site at the corner of 10th Street and 3rd Avenue, which is within, not
outside of, the area the community plan opposes additional NYU development.110
Urging NYU to look beyond its neighboring communities makes sense in terms of the immediate
communities involved. But one problem with a “do-it-in-someone-else’s backyard” approach is
that NYU is already a giant presence in other backyards in Manhattan. Another broader problem
is the potential loss of tens of millions of dollars in property tax revenues from the city treasury. Its
medical school and hospital center, located in the East 30’s along First Avenue, just announced
plans to build the world’s largest (at 120,000 square feet) child psychiatric treatment, research
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and training facility on First Avenue between East 25th and East 26th Streets. The facility will cost
$110 million and has already received a pledge of at least $30 million in state funds,111 not
including other possible public subsidies or lost city property tax revenues.
This one example should serve as a reminder that all private university real estate ventures have
serious and concrete citywide fiscal and non-fiscal impacts that travel far beyond the burdens and
immediate boundaries of the communities in which they occur.
(Un)Freedom of Speech: NYU’s Labor Battles
.
Skirmishes over real estate expansion are not the only source of troubled public relations
involving NYU. The university is also fighting a bruising labor battle, the significance of which
extends far beyond NYU and New York City.
In August, 2005, just before the expiration of a singular five-year contract with the only
graduate student union at a private university, NYU announced it would no longer recognize
the union, the Graduate Students Organizing Committee (GSOC), Local 2110 of the United
Auto Workers.
The university cited a 2004 decision by the National Labor Relations Board (NLRB) that
reversed its own four-year-old ruling that recognized graduate student teaching and research
assistants as employees with the right to organize and collectively bargain. NYU’s decision
was applauded by many private universities, including Columbia and Brown, which have
been fighting similar unionization efforts, and condemned by local and national labor unions,
which regarded the action as a serious setback to unionization efforts at other
higher education institutions.
GSOC’s expiring contract had raised stipends for graduate teaching and research assistants
by about 40%, from a poverty-level $10,000 to a bare-living wage of $18,000, and provided
full health coverage, paid sick leave and holidays. It was regarded as a model by graduate
students and labor unions nationwide and as a serious threat by many private universities,
which were increasingly adopting a corporate approach to university management.
In contrast to private universities, at public universities, the right of teachers and graduate
students to form unions is governed by state law, not by the NLRB. As a result, these
workers at many public institutions, including CUNY, have often been unionized years. It is
the world of private higher education, including the most elite and prestigious universities,
that has fiercely resisted unionization efforts by graduate assistants.
After the failure of efforts by national and local public figures such as Jesse Jackson,
AFL-CIO President John Sweeney and New York City Council Speaker Gifford Miller to
persuade NYU to continue to recognize the student union, GSOC voted to go on strike.
(continued)
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Three weeks after the strike began, NYU President John Sexton sent strikers a memo
threatening those who failed to return to work by December 5th with loss of their spring
semester stipend and teaching eligibility.
Many individual professors and academic organizations, including the American
Association of University Professors, have criticized NYU’s actions as an effort to exploit
graduate students and to undermine their academic freedom. The International
Cinematographers Guild, many of whose members are graduates of NYU, severed its
ties with the university’s film school in a show of support for strikers.
A particularly striking observation was made by a leading labor educator, who noted that
“of tens of thousands of NLRB election campaigns” she has analyzed, “NYU’s campaign
against its graduate students stands out…because it represents a non-profit
institution that seems to have forgotten that it is in the business of higher education.”
This observation, in turn, raises the larger question of whether a private university
that receives publicly subsidized property tax exemptions and other state- and
city-funded benefits should not be bound by the same labor standards as public
universities in return for its public subsidies?
Sources for this sidebar include Karen Arenson, “NYU Moves to Disband Graduate Students
Union,” New York Times, June 17, 2005; Karen Arenson, “NYU Ends Negotiations With
Graduate Students’ Union,” New York Times, August 6, 2005; Karen Arenson, “76 Arrested
Protesting N.Y.U.’s Cutoff of Student Union,” New York Times, September 1, 2005; Scott
Sherman, “Bitter Winter at NYU,” The Nation, January 9-16, 2006; Jane Buck, President, AAUP
and Kate Bronfenbrenner, Director of Labor Education Research at Cornell University (readers’
responses to “Bitter Winter”); John Amman quoted in Shana Liebman, “NYU Film School
Networking Crisis,” Intelligencer, New York Magazine, December 26, 2005 – January 2, 2006.
PART V: PRIMARY AND SECONDARY EDUCATION
New York City’s Public School System
Free universal primary and secondary education is one of the few civil rights in America that
carries the obligation of public financing to ensure it. Unfortunately, however, the relative
responsibility of New York State and New York City to fund the basic education of New York City
children remains unresolved, as reflected in the continuing 13 year-long saga of the Campaign for
Fiscal Equity v. New York State lawsuit. A similar storyline exists with respect to the federal
government’s unfinanced and underfunded educational obligation to localities arising from the
Bush Administration’s No Child Left Behind Act, along with many older federal education laws.
But notwithstanding legislative indifference to their fiscal responsibilities, the legal mandate of
public responsibility for funding the basic education of all children is undeniable.
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As the U.S. Supreme Court held more than a half-century ago in the gold standard of civil
rights decisions:
[E]ducation is perhaps the most important function of state and local
governments. Compulsory school attendance laws and the great expenditures for
education both demonstrate our recognition of the importance of education to our
democratic society. It is required in the performance of our most basic public
responsibilities. …the very foundation of good citizenship… [I]t is a principal
instrument in …preparing {the child] …for later professional training … In these
days, it is doubtful that any child may reasonably be expected to succeed in life if
he is denied the opportunity of an education. Such opportunity, where the state has
undertaken to provide it, is a right which must be made available to all on equal
terms.” Brown v. Board of Education, 347 U.S. 483, 1954, emphases added.
Nationally, nearly 90% of all children were educated in public schools during 2001-2002.112
In that same year, 39.5% of public school children at the national level were racial or
ethnic minorities, compared to 24% of private school children.113 By comparison, in New
York City, 90.4% of public school kids were ethnic or racial minorities, while just 41.9% of
children attending private schools were.114
New York City operates the nation’s largest public school system, with approximately
1,300 schools serving a total student body of 1.1 million students. The size of its student
body alone would make the system the tenth largest city in the country, just behind Dallas
and San Antonio and just ahead of Detroit.
The city spends significantly more money for education than for any other public service.
In FY 2005, the Department of Education received a total of $13.8 billion for operations
and administration. If funding for education-related debt service and pension costs is
included, total funds committed for education in the city climbs to $15.7 billion, which
represents 29% of the entire city budget for that year.115 New York City self-financed $7.5
billion of the nearly $16 billion price tag for education, while New York State provided $6.2
billion, the federal government contributed $1.9 billion and private grants raised an
additional $82 million.116 To place these figures in budget context, the city’s second
highest expenses were for public safety and security, with the Police Department receiving
approximately $3.7 billion in city, state, federal and private funds.117
How is this money spent? Though the public school system is often viwed as a bloated
bureaucratic tick that sucks up money for administration, leaving paltry amounts left over
to trickle down to the classroom, current reality presents a very different picture.
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An analysis for year 2000-01 by the non-profit Educational Priorities Panel (EPP) found
that, including fringe costs (but not pension or debt service), 59% of the DOE budget was
spent on instruction, 18% was spent on categorical programs, 17% went to operations, 5%
went to payments to private schools, and 6% went to administration.118 The city’s own
expense analysis for the same year differed slightly (because fringe costs are broken out),
with 45% for instruction, 18% for categorical programs, 16% operations, 11% for fringe
benefits (health insurance, etc for DOE employees), 5% private schools, and 5% for
administration.119 In both cases, however, “categorical programs” are defined as “special
funding for additional instruction or services for students at high risk for academic failure,”
which includes “instruction funding.” This means that substantively, the percentage of
funding devoted to instruction actually is higher than the amounts narrowly designated as
classroom or instructional funds.
According to EPP, “Given the huge numbers of students in the city’s school district and the
larger-than-average size of most city schools, the student-to-administrator ratio is larger
than in most other school districts in the nation. School districts with the highest proportion
of administrative expenses are usually small rural and suburban districts.”120
Dumping on New York City’s public school system is a cottage industry, with news reports
routinely focusing on both chronic shortcomings and sporadic horror stories. But the
tremendous objective challenges the city’s public school system faces begin with
inadequate funding.
New York City’s per pupil expenditure in 2003 was $11,474, compared to a statewide
average of $11, 584,121 a superficially insignificant underpayment of $110. But this
comparison paints a false picture of near-equity by failing to factor in unique New York
City educational obstacles that should mandate higher per pupil funding. In New York City,
82% of public school students qualify for free or reduced-cost lunches, compared to a
statewide average of 50%. 13.7% of New York City public school kids have limited English
proficiency, which is fully 73% of the statewide total. Three-fourths of New York City’s
school kids are minorities, compared to a statewide average of 45%. New York City’s
public school system educates fully 69% of the state’s 1.3 million minority students.122
Class size remains a burning issue in the city. According to evidence presented at the
CFE trial, “Average city class sizes range from around 25 children in kindergarten to 29 in
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Good News/Bad News: Private Funding for Public Schools
New York City and cities around the country are increasingly seeking and succeeding in
raising private money for public schools.
Whether it’s through personal pitches by (and immediate access to) a billionaire mayor and
his public school chancellor, education initiatives started by private foundations, especially
those created by fabulously wealthy entrepreneurs like Bill and Melinda Gate, the Walton
Family, Michael Milken and others, or through naming schools after big donors, more and
more private funds are pouring into public education. In fact, in 2003, for the first time,
foundation grants for K-12 public education (at $1.23 billion) slightly exceeded those for
colleges and universities (which received $1.12 billion).*
Mayor Michael Bloomberg, who has staked his reputation on dramatically improving the
quality of public education in New York City, has devoted a large chunk of his entrepreneurial skills and political capital to tap into the city’s great wealth to enhance funding for the
public schools. From Chancellor Joel Klein’s snaring Caroline Kennedy to head up a new
Office of Strategic Partnerships in 2002, reinvigorating the city’s moribund Fund for Public
Schools by attracting a $100 million Bill and Melinda Gates grant to create small high
schools, and “turning public education into a darling cause of the corporate-philanthropicsociety set,” Bloomberg Administration has succeeded in raising over $311 million in private
funds since the beginning of his first term.**
That’s the good news. The problem is that public education is vital to the economic, social
and political well-being of this city and country; it is a public responsibility that should be
funded with public dollars, not treated as a private charity or a discretionary public service.
Increased reliance on (or addiction to) private funding could very well turn out to be bad
news if and when: 1) funding fashion turns away from public schools to a newer, sexier
cause celebre, as is almost inevitable in the world of charitable giving; 2) private funding
enables politicians and taxpayers to shirk responsibility to adequately fund public schools
with public dollars; 3) individual or corporate donors develop too much power to shape or
even dictate public education policy by requiring that their donations be used to further their
educational priorities or preferences; 4) private funding winds up widening already-huge
gaps between rich and poor districts, because of greater funding access and sophistication
of parents in well-off districts; and 5) private donations are procured through naming rights
and other quid-pro-quo commercial arrangements, which make schools a “a brick-and-mortar
billboard in perpetuity,”*** teaching students that everything is for sale for the right price,
even their places of learning.
As one educator put it, ”We’re losing our public education system in this country. …It is being
eroded, inch by inch, by an ongoing blurring of the distinction between public interest and
private good.” ***
* Tamar Lewin, “Young Students Become the New Cause for Big Donors, New York Times, August
21, 2005.
** David Herszenhorn, “City’s Big Donors Find New Cause: Public Schools,” New York Times,
December 30, 2005.
*** Tamar Lewin, “In Public Schools, The Name Game As a Donor Lure,” New York Times, January
26, 2006, emphasis added.
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eighth grade. Many students are in much larger classes. New York City classes have
averaged 3 or 4 more students per classroom than statewide for over 20 years.”123
Notwithstanding the CFE victory, the bottom line that remains is that New York State’s
complicated and arcane “formulas” for allocating public school aid throughout the state, as
implemented by the state Legislature to this day, remarkably freezes aid to New York City
at a static, inequitable rate of 38.86% every year, regardless of demographic changes or
other factors that should mandate a higher percentage of funding for New York City.124
When Michael Bloomberg first ran for mayor, he vowed to reform the city’s public school
system. Shortly after winning office, he achieved what no prior mayor had been able to do:
he gained full mayoral control of the educational bureaucracy and the decades-old
decentralized education system. Since mayoral control of public education began, there
have been major programmatic and structural changes, many of which are still in
progress. They have created both optimism and confusion, which includes questions
about the level of funding for public schools.
An analysis by IBO found that over the 15-year period from 1990 to 2005, the total amount
of city, state, federal and private funds allocated to the Department of Education rose by
42.3%, increasing from $10.7 billion in 1989-1990 to $15.2 billion in 2004. But this
increase is far from as impressive or meaningful as it first appears, because of the factors
driving and comprising it. According to IBO, “Funding for non-public schools was
responsible for much of the increases in recent years, growing by 35.8 % just between
2000 and 2004. The primary cause of this growth was significant increases in mandated
payments to out-of-state schools for the education of special needs children. IBO reported
the per-pupil spending for general education students at $10,500, while per-pupil spending
for special education students was over $34,000.125 During this same period, for example,
per pupil spending, including debt service and pensions, grew by only 23%, to $13, 963 in
2004.126
A recent analysis by EPP concluded that funding for special education actually dropped by
$445 million during the first year of mayoral control (2003-2004), while funding for general
education increased by $568 million the first year and then dropped by $144 million in the
second year of mayoral control (2004-2005).127 In short, it appears that mayoral control
has not automatically translated into increased funding for education.
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The greatest single factor muddying the waters of public school funding for the city is, of
course, the still-unresolved issue of judicially mandated increased state education funding
in the CFE lawsuit. Since June 2003, when the state’s highest court ruled in favor of the
plaintiffs in CFE, the state government has been in contempt of court for failing to meet
court-ordered increases in both expense and capital funding for the city’s public schools in
order to provide all students with their constitutional right to a “sound basic education”.
After a lengthy trial, the CFE trial court adopted the findings of an independent panel it had
appointed to determine the actual dollar needs of city schools, to remedy New York
State’s failure to reverse its illegal underfunding of city schools in the time frame ordered
by the court. It ruled that New York State was required to increase aid to city public
schools by $5.6 billion a year (for a 43% increase to $12.9 billion annually, to be phased in
over a period of time), and to provide an additional $9.2 billion in capital funds (also over a
period of time) in order to increase the number of city classrooms, labs, libraries and other
physical resources to relieve overcrowding. Governor George Pataki immediately
appealed this ruling, which has, until now, enabled the state to remain non-compliant with
the CFE trial court’s order, pending the appeal. In late March 2006, however, the state’s
intermediary appellate court, previously hostile to the CFE plaintiffs, handed down a ruling
that may make the state’s continued resistance to providing significantly more funds to city
public schools much more difficult. In the long term, perhaps CFE may accomplish what
decades of political efforts have failed to do, by achieving fairer and more adequate state
funding of city schools, making it one of a handful of educational reforms that profoundly
alters the state of public education in New York City.
In the short term, however, state underfunding for city elementary and high schools
remains the same old story. Despite a projected $2-3 billion surplus, Governor Pataki’s
proposed 2006-2007 state budget includes an increase of just $634 million for education
statewide--a far cry from the $2.1 billion in first-year additional funding statewide outlined
in the Schools for New York’s Future Act, the legislation that applied CFE funding
requirements across the state.128 In the Governor’s education budget scenario, New York
City would receive an increase of only $111 million in state aid, a mere 1.09% increase
over last year.129
At the same time that he refuses to comply with the court’s order to increase funding for
city schools, Governor Pataki is pushing a proposal to spend $400 million statewide in
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education tax credits that would provide low and middle income families in failing school
districts with up to $500 in refundable income tax credits that could be used for private
school tuition or other individual supplements to public education. This quasi-voucher
program would drain rather than add funds to city schools, an action that vividly illustrates
the governor’s contempt for New York City students, if not for the state’s highest court.
The new state budget passed by the state Legislature does significantly increase capital
funding for city schools, but provides only minimal increases in funding levels for school
operations. And the governor has yet to react, so only time will tell.
The cost of implementing the federal No Child Left Behind Act further burdens the city and
other local education systems that are underfunded to begin with and facing mounting
budget cuts, as the Bush Administration attacks so-called “discretionary” domestic
spending. President Bush’s proposed 2007 federal budget would cut $7.6 billion in
education spending nationally; for New York State this would translate into a cut of $452
million over the next five years.130
A World of Privilege and Prayer: Private Elementary and Secondary Schools
in New York City
The world of New York City private schools contains two parallel universes. One is home
to some of the world’s most prestigious private schools, where both the level of tuition and
the fierceness of competition for admission can easily rival an Ivy League university. At the
same time, the city is also home to hundreds of religious schools, some large, some small,
some struggling to survive, others flourishing, especially with the current wave of
immigration to the city.
The 2003-2004 Private School Universe Survey conducted by the U.S. Department of
Education’s National Center for Education Statistics identified a total of 898 private
schools, religious and secular, in New York City.131 Of the total, approximately threequarters of the schools are religious-affiliated.
During the 2003-2004 school year, approximately 250,326 children were enrolled in
private elementary and high schools in New York City, compared to 1.085 million in the
public school system for the same year.132 Of the combined total of 1.335 million schoolenrolled children in New York City that year, 81% attended public schools and 19%
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attended private schools. Of all city school-enrolled kids, 9% attended Catholic schools
(representing to 49% of private school enrollment), 6% attended non-Catholic religious
schools (34% of total private school enrollment), and 3% attended secular private schools
(equal to 16% of private school enrollment).133
As with real estate and much of life in New York City, the world of private schools varies
significantly by location. In Brooklyn, which calls itself the “borough of churches,” perhaps
surprisingly non-Catholic religious schools outnumber Catholic and secular institutions
combined. In the other four boroughs, Catholic schools are the largest presence, although
they fall short of a majority in Manhattan (44%) and Queens (41%). In Staten Island and
the Bronx, Catholic schools clearly dominate, representing 61% and 73% of all private
schools in those boroughs, respectively.134
Also perhaps running counter to popular perception, Brooklyn leads with the largest
number of children in private schools, with 39% of the total, followed by Queens (24%),
Manhattan (16%) the Bronx (14%), and Staten Island (6%).135 In terms of racial/ethnic
breakdown, 47% of private school enrollees citywide for 2003-04 were white, while 17%
were black, 15% were Hispanic, and 5% were Asian, with the remainder unreported.136
By comparison, New York City public schools showed a markedly different racial and
ethnic breakdown. According to the New York State Education Department’s July 2005
State of Learning report, in 2004-05 school year, 14.6% of New York City’s public school
students were white, 33.8% were black, 38.6% Hispanic and 18% were listed as “other.”137
The Historical Role of Private Schools and Religion
During the colonial years, throughout America, the task of educating the young--to the
extent it occurred--was performed primarily by religious institutions, joined later by other
private, often religious-affiliated, charitable institutions. It was years before state
constitutions mandated public education and local infrastructures were developed to
provide it. In New York City, the development of both public and private educational
systems was convoluted, largely because of religious, ethnic and class differences,
overlaid by immigration status. As the city’s population grew, tensions between “nativists”
and Irish Catholics “exploded in the great school controversy,” sparked in 1801 when New
York State began to give money to different churches for the education of poor children.
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After 30 years of conflict between the so-called “public” education camp (which, in fact,
reflected the existing power of the Protestant ruling elite) and advocates of religious
education, in 1842 the New York State Legislature finally settled the matter in a way that
was satisfactory to neither side. The Legislature enacted a law that denied state funding to
any school in which any religious doctrine was taught, and gave control over the New York
City school system to officials elected by city voters. A decade later, the Public School
Society, the last vestige of the old Protestant educational power structure, was disbanded
and its schools turned over to the new board of education. At this time, Irish Catholics,
under the leadership of their powerful bishop, decided to create and maintain a completely
separate Catholic educational system of their own.138
These long-lived conflicts may explain why New York City was “the last American city of
any size to establish public high schools,” opening its first in 1897.139
The Costs of Contemporary Private Education
In New York City today, the cost of private education is as variable, and often as high, as
the cost of higher education. A number of private high schools in the city recently made
banner headlines by breaking the $30,000 tuition bar for the first time. At the city’s most
elite schools, tuition of over $26,000 for kindergarten is now par for the course. Tuition at
most religious schools tends to be considerably lower and far more affordable. (See
below.)
Sample Tuitions at New York City Private Schools
School
Tuition 2006-07140
Grades
Riverdale
$31,200
k-12
Trinity School
$28,770-$30,170
k-12
Dalton
$29,250
k-12
Allen-Stevenson
$28,975
k-9
St. Joseph of Yorkville
$3,500
pk-8
St. Stephan of Hungary
$3,400
k-8
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Property Tax Exemptions for Private Education
While real estate expansionism and other related non-neighborly actions on the part of
individual large private universities like Columbia and NYU periodically spark town-gown
style conflicts that may attract citywide attention, rarely is any public scrutiny given to the
hundreds of tax-exempt properties owned by private primary and secondary schools
scattered throughout the five boroughs.
According to IBO’s 2005 exemption analysis for City Project, at least 533 private
schools, both secular and religious, own a total of 826 properties throughout the
five boroughs. They cost the city treasury at least $119,030,693 in lost revenues in
FY 2005. This figure may well be proportionally more underestimated than tax
expenditures for colleges and universities. There are far more institutional owners and
both the number and value of their properties are considerably lower than the larger, more
highly concentrated properties owned by higher education institutions, making these
primary and secondary properties more likely to fly below the radar of DOF tax assessors.
These property-owning private schools comprise slightly less than 60% of all private
schools in the city. Presumably, the remaining 40% of private schools rent property, pay
commercial property taxes, and are able to fulfill their missions without relying on public
subsidies in the form of property tax exemptions.
Unlike the realm of higher education, where a small number of individual institutions
dominate the tax expenditure scoreboard, primarily through constant real estate
expansion, the majority of the elementary and secondary institutions own just one or two
properties. Enrollment at most private schools is relatively flat or in decline (particularly the
case with many Catholic schools) and while new schools do start up (and remove any
properties they purchase from the tax rolls), the number of property tax exemptions for
lower education is not expanding as rapidly as for higher education. The value of existing
exempt properties, of course, does continue to rise, as a result of the city’s blazing-hot real
estate market.
Nevertheless, despite the small number of real estate giants among private schools, at
almost $120 million a year, their cumulative property ownership accounts for a significant
loss of tax revenues.
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Because of the large number of property-owning private schools, City Project
concentrated its analysis on institutions whose total tax expenditures amounted to
$100,000 or more. Of the 533 property-owning institutions, 296 schools own one or
more properties with tax expenditures totaling over $100,000. Together, these 296
schools account for $108,859,528 in tax expenditures, or 91.4% of the total tax
expenditures for this portion of the educational sector.
Of particular interest is the list of the twenty private schools with the largest tax
expenditures. (See Table 9, Top 20 Private Elementary and High School Tax
Expenditures, FY 2005, below.)
These top twenty institutions together own 76 properties, which are assessed at just over
$300 million and account for just over $30 million in lost tax revenues, or 27.5% of the total
tax expenditures for private schools. Eleven of the top 20 are religious-affiliated, while 9
are independent. (Two of the secular schools are special education schools--the Lexington
School for the Deaf and the New York Institute of Special Education--which present
special policy considerations. See A Special Case for Special Ed, p. 79.)
Manhattan and the Bronx are each home to five of the top twenty. Queens has three, as
does Brooklyn, despite having the largest number of private schools and the highest
private school student enrollment. Two are on Staten Island, which is somewhat surprising
given that it has the smallest private school inventory of the five boroughs. Two of the top
twenty institutions are “bi-borough” in nature, with branches located in two boroughs.
Although the total tax expenditures from tax-exempt private school properties are relatively
modest, especially compared to those generated by colleges and universities, they
nonetheless raise important public policy issues that surely merit broad public
discussion. Property tax exemptions are public subsidies to private education. Revenue
diverted from the city’s coffers by virtue of such exemptions is money that could otherwise
be spent on public services, including, most obviously, the city’s struggling, inadequately
funded public school system.
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Table 9
TOP 20 PRIVATE ELEMENTARY & HIGH SCHOOL TAX EXPENDITURES, FY 2005
Borough
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Queens
Manh./Qns
Manhattan
Manhattan
Bronx
Queens
Staten Island
Manhattan
Staten Island
Brooklyn
Manhattan
Brooklyn
Bronx
Manhattan
Bronx
Bronx
Brooklyn
Queens
Manh./Bronx
Bronx
School
No. of
Properties
Tax
Expenditure
Enrollment
Grades
9-12
k-8
pk-12
k-12
9-12
9-12
9-12
pk-12
9-12
pk-12
9-12
pk-12
k-5
k-12
pk-8
pk-12
pk-12
pk-12
pk-6
pk-12
St. John's Prep
UN International School
Lycee Francais
Trinity School*
Cardinal Spellman H.S.
St. Francis Prep
Monsignor Farrell H.S.
Ramaz School
St. Jos. by-the-Sea H.S.*
Magen David Yeshivah
Xavier High School
Poly Prep
Horace Mann School
Chapin School*
S. A. R. Academy*
NY Instit. For Special Ed.
Yeshiva of Flatbush
Lexington School/Deaf
Ethical Culture Fieldston
Riverdale Country School
1
2
6
6
1
1
1
2
1
16
2
2
10
1
3
2
7
1
3
8
2,017,620
1,980,294
1,918,696
1,863,361
1,649,404
1,639,316
1,629,228
1,563,655
1,538,435
1,494,472
1,419,900
1,418,732
1,417,491
1,326,585
1,326,585
1,323,559
1,234,020
1,104,647
1,083,750
1,074,530
1,327
181
1,048
999
1,387
2,707
1,179
1,133
1,411
1,800
912
945
442
643
744
223
2,090
328
316
1,045
TOTAL
76
30,024,281
20,860
Per
Student
Subsidy
1,520
10,940
1,830
1,865
1,187
605
1,381
1,380
1,090
830
1,556
1,501
3,206
2,063
1,783
5,935
590
3,367
3,429
1,028
1,759
* Enrollment figures from U.S. Education Department, National Center for Education Statistics 2003-2004 Private School Universe
Survey, except where noted with *, which are from privateschoolreview.com.
Given the hard-won, absolute constitutional requirement of universal free public education, a
number of fundamental issues should be addressed:
-- Should the city be subsidizing private elementary and secondary education at all
through property tax exemptions?
-- If some level of public subsidies for private education is determined to be desirable
public policy, what form should the subsidies take, and what objective criteria should be
applied to determine their level, the particular schools to receive them and the individual or
classes of students to benefit from them?
-- What level(s) of government should make these determinations?
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--What level(s) of government should bear the cost of them?
--Should religious-affiliated schools even be eligible for property tax-exemption and/or
other subsidies?
Other Public Subsidies for Private Education
Property tax exemptions are not the only type of public subsidy that New York City and
state provide and fund for private education. As mentioned above, approximately 5% of
the Department of Education’s budget is allocated to private schools. The bulk of this is for
the cost of private tuition and transportation of special education students unable to be
served in regular public schools, which is a legitimate expense.
But the city also underwrites other aspects of private education that seem much less
defensible, including providing city-funded school nurses to private schools (funded
through the Department of Health) and paying for transportation of general education
students attending private schools who meet certain distance (not means) requirements.
The issue of city-paid nurses in private schools came to a head most recently in 2002,
when Mayor Bloomberg cut funding and reduced the number of nurses in private and
parochial schools as a cost-saving measure. While state education law requires districts to
provide nurses to both public and non-public schools, it does not mandate a ratio that
districts must adhere to. After repeated cuts and restorations during the ongoing budget
crisis, in 2004, the Council introduced legislation (and overrode a later mayoral veto of the
bill) that required the city to provide a full-time nurse in every private school with more than
200 students that so requested.
While state law requires rural districts to provide transportation under certain
circumstances, urban school districts are not required to do so. The rub is that if an urban
district chooses to provide transportation, it must be offered equally “to all children in like
circumstances residing in the district,”141 which results in yet another unfunded state
mandate that has city taxpayers picking up the tab for transporting private school kids.
The DOE provides school bus service or free or subsidized MetroCards to general
education students at both private and public schools who meet certain distance eligibility
requirements. Bus service is available when DOE deems it feasible; if not, kids who meet
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distance requirements (which vary with a student’s age) automatically qualify for free or
half-fare (depending on the distance) MetroCards.
In the 2005-05 school year, approximately 115,000 general education students received
free school bus service, at a total cost of $188 million ($78 million of which came from city
funds). Some 69,000 of these kids attended public schools, while 46,000--or roughly 40%-attended private schools.142 In addition, the city spends $45 million on subsidized passes
for public transportation for 591,000 children, 22% of whom (130,000 kids) attend private
schools.
The city spends over $40 million to subsidize bus or subway service for families who
choose (and are financially able) to send their kids to private school, without any needsbased eligibility requirement. City taxpayers are paying for buses or MetroCards to ferry
kids to some of the most elite and expensive schools in the nation, no questions asked.
But here’s a question that should be asked: if a family chooses and can afford to pay as
much as $26,000 a year for kindergarten tuition, why are taxpayers footing the bill to
deliver them there?
A number of other public subsidies for private schools deserve brief discussion. New York
State provides $57.30 per student, in both public and private schools, for the acquisition of
textbooks. (This money flows through the city’s budget and is accounted for as part of the
pass-throughs for private schools). More than half of the $27 million the state spent on
private school textbook aid for the 2003-04 school year went to New York City students.
The elimination of the subsidy for private schools would result in savings at the state,
rather than city, level, but if the state savings were redirected to public schools across the
state according to existing formulas, New York City public schools could receive an
additional $10 million in textbook aid.143 The state also grants discounts in gasoline and
diesel taxes for private and parochial schools.144 Finally, the state reimburses private
schools for the cost of faculty and staff time spent complying with various state reporting
mandates, including attendance records, pupil evaluation tests, and graduation reports.
And private schools are eligible for tax-exempt bond financing for the purchase,
construction or capital improvement of their properties.
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A Special Case for Special Ed
In response to discriminatory treatment by public schools of students with disabilities, in
1973 Congress passed the Education of the Handicapped Act (EHA), which made special
education programs for disabled children mandatory. EHA was later strengthened and
renamed the Individuals with Disabilities Education Act (IDEA), which governs special
education today. The two basic rights ensured by IDEA are that every disabled student is:
1) entitled to a free and appropriate public education; and 2) that the education must be
provided in the least restrictive environment.
During the 2003-04 school year, 137,930 students or 11.1% of the citywide student
population in New York City public schools received special education services. The
special education budget for 2003-04 was $3.4 billion, or 25% of the total education
budget for the year. The three largest disability types are: learning disabilities (46%);
speech-language disabilities (24%); and emotional disturbance (13%).
The disparity between the number and percent of special education students and the
proportion of the general education budget spent to educate them reflects the higher cost
of providing these specialized services.
The majority of these students received special education services at regular public
schools, in accordance with IDEA’s commitment to provide such education in the “least
restrictive environment.” However, when a student’s needs cannot be met within the
context of the regular public school system (usually, though not exclusively because of
physical disabilities), a school district is required to cover the cost of tuition and
transportation to an approved private school. In New York City, for 2003-04, 4,743
students (3.4%) were educated at private day schools, at a cost of approximately $612
million (or 18% of the total special education budget).145
We believe that property tax exemptions for private schools that educate New York City
children with special needs who are unable to be served by the public school system are a
legitimate public expense. City Project would propose exempting these special education
institutions from any changes to existing laws that would result requiring private schools to
pay all or some property taxes for their property.
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Does Money Make a Difference?
Simply put, money matters in education, as it does, for better or worse, in most aspects of
life generally, and with public services in particular. Of course, public education funds must
be spent well, accountably, and be designed to ensure maximum student achievement.
But only fools claim that money doesn’t make a difference.
Almost without exception, modern research shows that “although socioeconomic
disadvantages have strong detrimental impacts on the achievement of many minority
students, the education opportunities that money can buy can substantially compensate
for these disadvantages.”146 Reduced class size, intensive reading programs, and preschool initiatives have consistently been documented to increase student achievement,147
but each of these efforts adds costs to the public school system. That money has to come
from somewhere. One place to start that search is the city’s growing property tax
exemptions for private educational institutions.
PART VI: A PUBLIC AGENDA FOR REFORM
City Project’s Recommendations
City Project began its examination of property tax exemptions in New York City out of
concern for the city’s fiscal health, specifically, its ability to generate sufficient revenues, in
an age of shrinking state and federal aid, to maintain a balanced budget while providing
for the full array of services and infrastructure essential to the well-being of city residents
and its overall quality of life. But the more closely we examined effects of New York
State’s system of property tax exemptions on New York City, the more interested and
alarmed we became at the impacts of property exemptions on tax fairness, governmental
accountability, and the achievement of or interference with a gamut of statewide and local
public policy goals, in addition to the fiscal bottom line.
As cited in this report, City Project is hardly the first to examine the issue and impacts of
property tax exemptions and propose serious reforms, but it is the first to do so in many
years. In fact, we discovered that, ironically, as the number, value and tax expenditures
from property exemptions escalated uncontrollably in the last decade and one-half, the
frequency and thoroughness of official reviews of this issue have declined, until they
receded altogether into the dustbin of state legislative history. So, taking a page from that
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history, we reiterate one of the ultimate goals of the Cuomo Panel on Real Property Tax
Exemption and Classification Issues, the last comprehensive state review of New York
State’s property tax exemption system and proposed series of sweeping reforms: “Local
and state officials should be educated to view exemptions as expenditures of government
funds, the same as cash expenditures, and balance the purpose of the exemption with
financial ability to give the exemption. And all should realize that every time we give
someone and exemption, other persons must pay for it.”148
Our report has raised a number of fundamental substantive and procedural issues about
the breadth, impact and rationality of New York State’s system of wholesale, uncontrolled,
permanent property tax exemptions as it affects New York City. The report focused on
exemptions that pertain to private property-owning non-profit educational institutions at all
levels, from pre-kindergarten through college, graduate and professional schools, and
assessed how well or poorly such exemptions actually fulfill their “public benefit” rationale
of providing education to all New Yorkers, and doing so in ways that are appropriately
targeted, publicly accountable, and provide “services to the public, on a not-for-profit
basis, which otherwise might have to be provided by government itself.”149
We chose to begin our review of private non-profit property tax exemptions with
educational institutions because the federal and state constitutional mandate of free
universal elementary and secondary education, and the state and city commitment to
providing more generally available and affordable higher education, as well as other
trends, raise fundamental questions about the effectiveness and necessity of such public
subsidies for private educational institutions.
The recommendations that follow are of two types: first, those that are specifically oriented
to educational institutions, some of which might be applicable to other non-profits; and
those that should be considered for most, if not all, “institutional” exemptions or
“organizational social purpose exemptions” as they are called by the Cuomo Panel.
The following are options for reforming the current broad-brush system of permanent, full
tax exemptions for educational properties, particularly higher educational ones, starting
with the most modest.
1. The New York State Legislature should immediately enact legislation that defines
the nature and use of private educational ( and religious and charitable) institutions
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properties that are eligible for property tax exemption, as specifically authorized in
Article XVI of the New York State Constitution.
The 1938 constitutional amendment that conferred tax-exempt status on properties owned
by non-profit education, religious and charitable institutions specifically authorized the
state Legislature to define the nature and use of properties to be included in the exemption
of properties “used exclusively for” educational (and religious and charitable) purposes.
Over the years, however:
“[T]he constitutional exemption has merely been repeated in the statute, without
legislative definition. As a result, the courts have been forced to determine the
application of the statute on a case-by-case basis without any further guidance
from the Legislature. The consequence to local governments has been an
expansion of the scope of the exemption into properties traditionally associated
with private, entrepreneurial activity and also traditionally subject to taxation. The
mandatory exemption of these properties is both a fiscal liability to the community
and a source of local irritation.”150
Such decisions, absent a clear legislative definition, have stretched the definitions of these
and other exempt properties beyond any reasonable or rational interpretation.
There have been periodic legislative efforts to define and limit exemptions for some nonprofits. One of the most interesting efforts occurred during the 1991-92 legislative session.
At that time, a bill introduced in the Senate (S-3384) clarified the definitions of eligible
exempt organizations, narrowed the definition of the types of properties that could be
“used exclusively” for exempt purposes, and provided a specific definition for what “in
good faith contemplated” meant for unused property to qualify as exempt. The same year,
the Assembly proposed a bill (A-3266) that would have defined what various
organizational purposes meant for application of property tax exemptions. With respect to
“educational purpose,” the definition explicitly excluded properties used for faculty
residential housing or social relations. It also excluded facilities used for “unscheduled,
unstructured and unsupervised recreation,” but left facilities used for organized school
sports exempt, an obvious gesture to sports-loving alumni and others.151 Both bills
received insufficient support to pass.
A more recent effort by the New York State Senate attempted to narrow definitions of
eligible properties and organizations. The bill contained restrictive language and went so
far as to mandate “strict construction” of the law and limited application of exemptions. In
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the section of the proposed law that applied to educational institutions, the language
continued exemptions for student dorms, but seemed (by omission) to exclude permanent
housing for faculty and other staff.152 All other properties owned by educational institutions
and improvements to such properties would be subject to local real estate taxes in whole
or part, if they were not used for wholly exempt purposes. Unfortunately, this reform effort
was exclusively focused on reducing homeowners’ property taxes, with little discussion of
the need to ensure adequate revenues to meet local public service needs; and language
in the legislative findings was overtly hostile to non-profit organizations in general. As a
result, the legislation gained no traction in the state Assembly and has remained in limbo.
These periodic efforts to narrow the scope and application of automatic tax exemptions
have failed, perhaps at least in part, because the general public is unaware of the impact
of property tax exemptions on the ability of local government to adequately fund public
education and other essential services, as well as the impact on their own tax obligations.
But it remains within the power of the state Legislature under the 1938 constitutional
amendment to limit these elastic definitions without the need for a constitutional
amendment, and the Legislature should do so immediately, by narrowing the definition of
“used exclusively” to properties used solely for educational, religious and charitable
purposes, as strictly construed. Such a narrowed redefinition should, at the very least,
eliminate from exemption and restore to the tax rolls all residential properties that
are used to provide year-round housing for faculty and other employees affiliated
with the exempt institutions. Further, the Legislature should examine the possibility of
restricting or eliminating exemptions for student housing, as well.
As illustrated in Appendix B and discussed above, a rising number (and value) of
properties acquired or developed by universities and colleges are permanent, full-year
residential structures. Most of these were pre-existing, taxpaying residential buildings (or
individual housing units) that were purchased by colleges and universities, taken off the
tax rolls, removed from the general housing stock of the city, and repurposed for use as
below-market rate faculty and other institutionally restricted housing. In addition to
shrinking the tax base, such purchases may also cause housing values to rise and reduce
housing affordability in the neighborhoods where these buildings are located.
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Whatever their local extra-fiscal impact, such properties bear no intrinsic relationship to
the exempt educational mission of their owners, and can by no stretch of definition be
classified as being “exclusively used” for educational purposes as required by the state
Constitution and should not remain exempt from taxation. However important--or
necessary--the incentive such below-market rate housing is to enable local universities to
recruit and retain valued faculty and other staff, the development and allocation of rare
housing subsidies should be determined by publicly determined city housing policies, not
by the unreviewable unilateral actions of private educational institutions.
More New York City-based private universities (e.g., NYU, St John’s, etc.) are transitioning
from “commuter schools,” primarily serving city residents who lived at home or elsewhere
off-campus, to “campus schools,” attracting many more of out-of-town students. As
Appendix A illustrates, of the city’s 40 private property-owning colleges and universities,
only 12 serve a student population that had a majority of city residents in 2004, with the
overall percent of city resident students of all private institutions averaging only 38.2%.
This shift is producing a greatly expanded need for additional residential student space,
resulting in the ironic and untenable situation in which private institutions are developing
more properties as student dorms and other forms of less-than-permanent residences to
house their growing number of non-city-resident students, while receiving ever-increasing
city resident-subsidized property tax exemptions.
We would urge that both houses of the Legislature consider enacting a law, which should
apply to religious and charitable properties as well as educational properties, limiting tax
exemption to properties exclusively used for mission-related purposes, as required by the
state Constitution, which would exclude all Class A residential properties, as well as
impose limitations on student residential facilities as proposed above.
If property tax exemptions for student residences are to be continued, we recommend that
they be restricted to dorms owned by institutions where a majority of the overall student
body is comprised of city residents.
2. New York State should compensate New York City and all other localities for all
lost tax revenues that are attributable to state-imposed property tax exemptions.
As the New York Conference of Mayors and Municipal Officials observed over a decade
ago, “More and more the state government uses the local property tax as a means of
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funding statewide social and economic policy. …State officials take the credit, and local
officials and taxpayers pay the bills.”153
Having the state reimburse localities for property tax exemption-related revenue losses
would have several salutary results:
- It would make the state government more deliberate and cautious about creating,
continuing or expanding property tax exemptions; more responsive to local spending
needs and priorities; and more directly accountable for the local fiscal impacts of statewide
policies and priorities that are funded by local, rather than state, taxpayers;
- It would reduce or eliminate one source of huge, mounting unfunded state
mandates by requiring the state to put its funds where its stated priorities are;
- It would equalize fiscal burdens from tax-exempt properties that provide services
or benefits to people from outside the immediate jurisdiction of the exempt entity.
This idea is neither original nor far-fetched. New York State itself voluntarily pays local
property taxes or payments in lieu of taxes (PILOTS) on a small number of its own taxexempt properties.154 More on point are the examples of Connecticut and Rhode Island,
which reimburse localities for a significant portion of their actual revenue losses from
exempt properties owned by universities--although the percentage of reimbursement is
different between the two, and varies for each from year to year, as do the actual
payments. The above-mentioned proposed Senate bill also included a provision for state
aid to be made available to localities with tax-exempt properties upon their application, but
would have limit the amount of state appropriations to an unrealistically and inadequately
low amount of $10 million statewide.155
The arguments in favor of full state reimbursement of lost local property tax revenues are
compelling for localities throughout New York State, and especially for New York City.
There is an existing imbalance of payments between New York City’s revenue
contributions to the state and state aid to the city, which has been estimated at between
$7 billion to $11 billion per year.156 And, as noted before, many of universities and colleges
in the city (as well as other non-profits) directly serve and indirectly benefit large numbers
of people that come from and go back to locations far beyond the city’s borders. Moreover,
because of New York City’s status as a national and international center of finance, arts
and culture, more private universities and colleges have chosen to locate here than
anywhere else in New York State and the nation, saturating the city with tax-exempt
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educational institutions and properties that do not even serve a majority of New Yorkers.
In fact, tax expenditures from private non-profit colleges and universities in New
York City exceed those from state-owned properties in the city.157
If it were it possible to get such legislation enacted, the only drawback would be a very
practical one: just as the state’s revenues ebb and flow from year to year, so do its
legislative priorities. There is little assurance that reimbursing localities for lost property
revenues would become or remain a firm fiscal commitment. As the Scottish poet Robert
Burns wrote (and John Steinbeck cribbed and anglicized): “The best laid plans of mice and
men often go awry.”
3. After narrowing the definition of exempt properties, the New York State
Legislature should enact a law enabling New York City and all other municipalities
to impose user fees or service charges on tax-exempt properties, for their
institutional owners’ use and/or consumption of specified local services from which
they benefit, and for which they currently do not reimburse the city. The exact
design and coverage of these fees could be left to local determination.
The theory behind imposing service charges or user fees on property-owning non-profits is
simple and straightforward: such institutions consume and/or use local services and
infrastructure and should therefore contribute to the costs that local governments incur to
provide them. As the Cuomo Panel report put it, “Tax-exempt property benefits from many
kinds of municipal services, just as taxable property does.”158
Another collateral benefit of imposing service charges/user fees is that it would remove the
incentive for exempt institutions either to over-invest in real estate or to retain vacant or
underused land they no longer need.159
We believe that such legislation would be legally permissible under Article XVI of the state
Constitution without amendment.
In municipalities throughout New York State (e.g., Buffalo) and elsewhere, user fees are
now charged to a variety of tax-exempt properties for various local public services,
including water, sewer and/or waste disposal.160 In New York City, although certain
categories of non-profits are exempt from or pay discounted rates for water and sewer,
private colleges and universities are required to fully pay for water and sewer charges
related to their properties. This represents a clear precedent for the ability of New York
State and municipalities to impose other user or service fees by statute.
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The proposed law would simply expand this recognized concept to encompass other basic
local public services that property-owning universities and colleges and other tax-exempt
institutions make use of, consume or benefit from, and extend the ability to impose such
charges to all localities throughout the state.
In 1971, on the heels of the Becker Commission’s report and recommendations on
property tax exemptions, the New York State Legislature enacted an optional service
charge law to do what we are proposing here, but the law was repealed before it took
effect. According to the Cuomo Panel, which discussed this prior legislative effort in its
own recommendation to re-enact such a law, while there were and would be some
“practical difficulties” in imposing such charges, “it is not an impossibility.”161 The Cuomo
Panel’s own service charge proposal (Recommendation #15) would have included fees for
four municipal services (police, fire, emergency medical services and snow removal) and
for the costs of capital infrastructure, while excluding the costs of education and social
services “because those services do not directly benefit exempt properties.”162
Given the expansion of New York City’s public services and their increased costs since
the mid-1990’s, City Project proposes that a service charge formula should include the
costs of the following local public services and expenses: police and fire protection,
sanitation, transportation, traffic control and basic road repairs and maintenance,
environmental protection, the Department of Information Technology and
Telecommunications (operation of the 311 system), the Corrections Department, the
offices of the District Attorneys and the Department of Finance, all of which would include
pension and fringe benefit costs for city employees engaged in providing these services.
Like the Cuomo Panel, we would also include proportionate charges for city-financed debt
service payments for infrastructure maintenance and improvements.
The services and expenses included in City Project’s service charge proposal are all
funded primarily by city-generated funds and benefit all city residents and properties. We
would apply the service charge only to the city-funded portion of a given service or
department. Similar reasoning applies to the imposition of charges related to a share of
city-financed debt service for infrastructure maintenance and improvements. As the
Cuomo Panel stated and the Becker Committee previously found, these types of services
“provide benefits of an essential nature to the public as a whole which are not, and cannot,
be efficiently absorbed by any segment of the private sector.“163
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Of course, defining the services that should be included in a user fee formula is ultimately
a matter for public debate and decision. Our proposed list is a starting point.
The amount of user fees that would be charged to universities would be derived by
applying the following formula: divide the city-funded (excluding state and federal aid) cost
of property-related services by total city tax revenues, and to the resulting percentage,
apply the applicable property tax rate for the current year. The resulting percentage is then
in turn applied to the assessed value of the property being charged, which yields the
service charge.
At current assessed values (which, as noted previously, are likely to be considerably
understated and must be brought up to date), the FY 2005 combined assessed value of
all properties owned by private non-profit colleges and universities in the city was
$2,613,332,458 billion. (See Appendix B.) To determine the total amount of service fees
that would be charged proportionally to such institutions, the city would make the following
calculations: it would divide the total city-funded costs for the itemized public services to
be included (a total of $14.052 billion in FY 2005, Appendix D, Select Agency Expenses
for Proposed Fee for Service, p. 102.) by total city tax revenues for the same year
($25.915 billion, Appendix D), and take the resulting 54.2% rate, multiply that by the
current generally applicable property tax rate of $12.28, to arrive at a service charge rate
of 6.6%. Applying this rate to the cumulative assessed value of all college and university
properties would yield new service charge revenues of $172,479,942 for FY 2005.
To determine the amount of service charges/user fees to be billed to individual institutions,
the city would simply apply the 6.6% service charge rate to the total assessed value of
each institution’s exempt properties. The larger and more valuable the real estate holdings
of an institution, the higher its service charges would be.
For example, Columbia University’s own property holdings have a total assessed value of
$623,558,768. Applying the 6.6% service charge rate to that assessed value would yield a
total annual charge of $41,154,879 for its use and consumption of the itemized public
services for 2005. Since Columbia’s property tax expenditure (without its two affiliated
institutions) was $61,217,801 for FY 2005, the proposed service charge is discounted by
almost one-third, which represents a continuing public subsidy. (See Appendix E, Sample
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of Proposed Service Charges for Universities Compared to Current Tax Expenditures, p.
103.)
Institutions with fewer properties and lower assessed values will pay proportionally lower
user fees. Toward the low end of the property ownership scale, for example, Boricua
College, which had an annual tax expenditure of $300,636 in FY 2005, would pay a
service charge of $177,012. (See Appendix E.) At the very bottom of the property value
scale is The New York Academy of Art. This institution owns just one property, which had
an assessed value of $1,048,500 and a tax expenditure of $117,526 in FY 2005. Using
our proposed formula, the Academy would be liable for service charges of just $6,291.
As noted above, some policymakers might justifiably argue for the exclusion of one or
more of our proposed service charge categories, and/or for inclusion of the costs of
libraries, parks, cultural institutions, and/or other categories of public services, including
public education, which, despite problems and criticisms, supplies both consumers and
workers for all city-based non-profit property-owning institutions. The ultimate
determination of which services to include in any service charge formula should be the
product of a robust and transparent public debate, and might best be made discretionary
for individual localities.
Finally, we would also recommend considering the inclusion of a circuit breaker provision
in the statute, which would enable a municipality to grant appropriate relief to any taxexempt institution that could demonstrate its inability to pay all or part of the user fee.164
4. Enact state legislation that requires the affirmative consent of local jurisdictions
before tax-exempt institutions may purchase taxable properties and remove them
from local tax rolls, unless a compelling state interest in such purchase, as defined
by detailed criteria spelled out in state law, is established, and a specific state
legislative finding is made that demonstrates how the proposed purchase meets all
such written criteria.
This approach, which gives decision-making authority to the level of government that
bears the cost of exemptions, has been used elsewhere (e.g., in Hartford, CT) and is, at
least in theory, indistinguishable from processes now in use to confer property tax and
other tax exemptions on commercial and industrial properties.165 Such prior local approval
process would enable a democratically elected, publicly accountable entity (such as the
local city council) to make a rational determination as to whether the lost property tax
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revenues are justified by other public benefits from the proposed purchase and use of the
property by a tax-exempt entity. It would allow the locality to effect more rational and
comprehensive land-use planning, and would give it greater leverage to impose terms and
conditions for the purchase of taxpaying properties that reflect local policy priorities (such
as set-asides of jobs or housing for residents of the neighborhood where the new
purchase is to occur, etc.). Finally, such prior approval could act to offset the leverage that
a non-profit has in bidding for particular properties against for-profit entities.
5. The state Legislature could enact a law requiring Payments In Lieu of Taxes
(PILOTS) from educational institutions and other tax-exempt non-profits.
There are ample precedents for and examples of localities receiving PILOT payments
from various non-profit institutions, particularly colleges and universities within their
borders. Both Cambridge and Boston have negotiated various arrangements with Harvard
and MIT for different amounts of PILOTS and other forms of payments for otherwise taxexempt properties. Boston has also negotiated PILOTS from its non-profit hospitals.
Beyond partial property tax reimbursements made by Connecticut, Yale University in New
Haven, and Stanford University in Palo Alto, California, each make contributions to their
respective fire departments for fire service. (See Recommendation 3, above.) To our
knowledge, New York City has never tried to negotiate PILOT payments from any of its
private, institutionally exempt non-profits, including educational institutions.
In its most recent bi-annual “Budget Options for New York City,” IBO includes the
possibility of obtaining PILOT payments from colleges and universities in the city, either
voluntarily or by legislation. IBO’s proposal sets payments at 25% of the tax expenditure
for each institution, and estimates that the total PILOT payment would currently amount to
$67.4 million.166
As required by the city Charter, IBO presents arguments both in favor of and in opposition
to this proposal, taking no position itself. IBO’s case in support of PILOTS from higher
education institutions includes: 1) the institutions’ consumption of expensive local services
(e.g., police and fire) without payment, which shifts tax burden to residents and for-profit
employers; 2) their provision of benefits to “a wider community beyond the city,” which
makes it appropriate to shift some of the burden of supporting their use of city services to
the broader base; and 3) the precedent of several large cities that collect PILOTS either
directly from large private educational institutions or from their state governments.
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IBO’s case against such payments centers on educational institutions’ economic benefits
to the city--from providing jobs to purchasing local goods and services and providing an
educated workforce, and the general enhancement of city life through research, cultural
contributions, public policy work and other programs and services. In addition, IBO
mentions the argument that tax exemption for faculty housing encourages faculty to live in
the city, pay taxes and consume local goods and services.
But there are at least two other practical arguments against the city’s trying to obtain such
payments on an institution-by-institution basis. The first and most powerful is the sheer
enormity and impracticality of achieving it. Unlike Boston, New Haven, Philadelphia and
other smaller municipalities with just one or a handful of universities to deal with, New
York City has 40 property-owning institutions that own more than 700 properties.
Assuming the PILOT payments are voluntary, such individual, ad hoc arrangements would
place an enormous burden on the city with no predictable or long-term fiscal benefits.
The second reason is that traditionally, where PILOTS have been negotiated, they have
generated a minute fraction of the revenue that would be generated by actual property
taxes set at the appropriate local tax rates.
In fact, one of the rare efforts to evaluate the effectiveness of PILOT programs from the
point of view of both local governments and institutional non-profits concluded that even
the more organized PILOT programs, such as those in Boston and Philadelphia, “are
piecemeal in nature, unevenly enforced, difficult to administer and produce very little
revenue in relation to the city’s overall tax base.”167
Because of these intrinsic problems, coupled with the large number of institutions involved
in New York City, we believe that PILOT payments fail to adequately address the basic
problems created by property tax exemptions: the lack of any meaningful limitations on the
number, nature, value and tax expenditures of such properties; their detrimental impact on
the local tax base, and their inequitable shifting of tax burdens to other local residents and
property owners.
Unless the state Legislature were to pass a law requiring property-owning educational
institutions throughout the state to make payments in lieu of taxes to their home localities
that represented a significant percentage of their tax current expenditures, PILOTS would
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be impractical and inadequate for New York City and elsewhere. We also believe that
such a law would be ruled unconstitutional by state courts if –and when—challenged, as
contrary to the current provision of the state Constitution that requires constitutional
amendment to alter current property tax exemptions for educational, religious and
charitable institutions
6. The state Legislature should undertake a public review of other exemptionlimiting options that would establish a better balance between the interests of
individual tax-exempt institutions and the broader public fiscal and other policy
needs of local jurisdictions.
A number of other proposals have been made over the years by various entities that
represent options to impose rational and necessary controls, restrictions and value
recapture on exempt properties and the tax expenditures they produce, which are well
worth further exploration. They include:
a) limiting the total tax expenditures from the operation of automatic property tax
exemptions to a specified percentage of real estate tax revenues and/or limiting tax
expenditures for any single institution to a specified percentage of the assessed value of
all their properties;
b) phasing in tax exemptions when taxable property is purchased and removed from the
tax rolls, to cushion the impact from lost tax revenues on local budgets;
c) imposing a set limitation on the duration of tax exemptions and phasing them out after a
certain period of time. This would allow younger or smaller non-profits to acquire property
without the burden of paying property taxes for a specified period of time, while protecting
the locality from perpetual exemptions, especially from larger, older and wealthier
institutions;
d) excluding future property purchases or the increased value of property from tax
exemptions. This approach might be restricted to non-profit institutions with real estate
portfolios above a certain value, number of properties, or total tax expenditures;
e) establishing a sliding scale of tax exemptions that would vary according to the
geographic impact of the services or benefits being provided by the particular tax-exempt
property and institution, conferring the highest exemptions to local-serving organizations,
and allowing diminishing to no exemptions to those whose services or benefits extend
statewide, nationwide or internationally;168and
f) imposing a municipal “flip tax” or a recapture tax on the profit from exempt properties
that are sold for market rate prices.
The options reviewed in this section not necessarily mutually exclusive. The state
Legislature should consider applying different combinations of restrictions generally, and
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even tailoring different approaches to different categories of exempt institutions, in order to
obtain the best balance among conflicting interests of individual property-owning nonprofits and the non-profit sector as a whole on one hand, and local fiscal needs, the
general welfare of local residents, and other fundamental policymaking considerations of
localities on the other.
7. The state Legislature should immediately undertake a comprehensive statewide
joint legislative review of the state’s entire property tax exemption system, widely
disseminate its findings and recommendations, and hold public hearings on them
throughout the state.
The Legislature must undertake a comprehensive, official bi-cameral examination of the
current scope and operation of property tax exemptions and their impacts on fiscal
stability, land use planning, and other issues in New York City and other localities. The
review should produce, among other things, a comprehensive statewide register (by
municipality, county or other appropriate legal-political jurisdiction) of all fully and partially
exempt properties, the category of their exemption, their location, owner, nature of usage,
value (exempt and assessed), and tax expenditure (with date of last assessment).
The results of this review must be made available to all the executive and legislative
branches of all municipalities and localities in the state, and to members of the public via a
widely advertised website, and in hard copy by request.
8. Pending the review proposed in Recommendation 7, above, the state Legislature
should immediately enact an absolute moratorium on: a) the addition of new
categories of exempt institutions and types of exempt properties; b) the acquisition
of new exempt properties by existing exempt institutions; and c) on increased tax
expenditures that exceed a specified percentage resulting from either the addition
of new exempt properties or the substantial rehabilitation of or major capital
improvements to existing exempt properties.
There is a need in New York State to immediately freeze the growth of tax
expenditures from existing exempt institutions and properties and from the addition
of new exempt categories and properties.169 Enacting an absolute temporary
moratorium would hold the line during the critical, comprehensive legislative and public
examination of the state’s tax-exemption system. A moratorium should temporarily prohibit
at least the three following activities statewide:
a) the addition of new categories of exempt institutions and types of exempt properties;
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b) the acquisition of new exempt properties by existing exempt institutions; and
c) increased tax expenditures that exceed a specified percentage resulting from the
substantial rehabilitation of or major capital improvements to existing exempt properties.
Such a moratorium would provide the state Legislature with a powerful incentive to
undertake a thorough bi-cameral examination of the problem in a timely manner.
9. New York City and other localities and/or the state Legislature should consider
initiating a constitutional amendment to delete the language in Article XVI that bars
legislative changes to tax exemptions for properties owned by religious,
educational and charitable entities, thereby placing such exemptions on an equal
legal footing with the property of all other exempt institutions and making them
subject to alteration or repeal by general laws.
Property tax exemptions are essentially public subsidies that do not necessarily reflect or
promote contemporary publicly-determined priorities. Property tax exemptions apply to
only a self-selected minority of private non-profit institutions, including educational ones,
that have had the means to acquire and maintain property for reasons of history,
endowment or other factors unrelated to their provision of services that constitute “public
benefit” to either the broad and general public, or a segment of the public with the greatest
need for such services.
As this report documents, in New York City, educational tax-exemptions tend to favor
large, well-funded private institutions with valuable property portfolios whose missions and
benefits often extend well beyond local borders, over smaller, younger, less-well funded
colleges and universities that provide services primarily to local residents, and either rent
space or own only one or two properties. Moreover, the current scope and cost of the
three mandatory categories of property tax exemptions are so broad and deep that
piecemeal reforms can achieve only limited results.
The most appropriate action that could be taken is to remove the constitutional barrier to
changing or repealing tax exemptions for religious, educational and charitable institutions
by simple legislative act. If this is not possible, other appropriate state action, as outlined
above, should be taken immediately.
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Appendix A
City Resident Enrollment at Property-Owning Private Institutions Compared to Public Institutions, 2004
Undergraduate
PRIVATE INSTITUTIONS
BANK STREET COLLEGE
BARNARD COLLEGE
BORICUA COLLEGE
BRAMSON ORT COLLEGE
BROOKLYN LAW SCHOOL
COLLEGE OF MT ST VINCENT
COLLEGE OF NEW ROCHELLE*
COLUMBIA UNIVERSITY
COOPER UNION
CORNELL U. MED. CAMPUS
FORDHAM UNIVERSITY
HEBREW UNION COLLEGE
JEWISH THEOLOGICAL SEMINARY
L.I. UNIV. - BKLYN CAMPUS
MANHATTAN COLLEGE
MANHATTAN SCHOOL OF MUSIC
MARYMOUNT MANHATTAN COLL.
MT. SINAI SCH. OF MEDICINE NYU
NEW SCHOOL UNIVERSITY
THE NEW YORK ACADEMY OF ART
NEW YORK COLL. PODIATRIC MED.
NEW YORK INSTIT OF TECH*
NEW YORK LAW SCHOOL
NEW YORK SCH. INTERIOR DESIGN
NEW YORK UNIVERSITY
PACE UNIVERSITY*
POLYTECHNIC UNIVERSITY*
PRATT INSTITUTE
ROCKEFELLER UNIVERSITY
Total
n/a
2,289
1,124
608
n/a
1,393
5,604
8,306
917
62
7,394
n/a
198
5,363
2,905
409
2,077
n/a
5,475
n/a
n/a
5,204
n/a
732
20,212
8,668
1,543
3,068
n/a
NYC res.
n/a
440
1,105
565
n/a
781
4,596
2,187
416
19
1,495
n/a
20
4,356
1,070
37
961
n/a
1,139
n/a
n/a
1,687
n/a
641
4,346
3,683
1,199
504
n/a
Graduate
NYC as %
n/a
19.2
98.3
92.9
n/a
56.0
82.0
26.3
45.4
30.6
20.2
n/a
10.1
81.2
36.8
9.0
46.3
n/a
20.8
n/a
n/a
32.4
n/a
87.6
21.5
42.5
77.7
16.4
n/a
Total
1,086
n/a
53
n/a
n/a
292
1,448
12,741
38
320
5,137
60
297
2,264
396
466
n/a
172
3,293
118
n/a
2,033
37
15
15,884
4,203
1,276
1,472
193
NYC res.
851
n/a
49
n/a
n/a
212
349
4,443
37
17
222
20
87
1,712
166
17
n/a
n/a
1,213
22
n/a
482
15
14
1,525
1,823
551
554
16
95
Professional**
NYC as %
78.4
n/a
92.5
n/a
n/a
72.6
24.1
34.9
97.4
5.3
4.3
33.3
29.3
75.6
41.9
3.7
n/a
n/a
36.8
18.6
n/a
23.7
40.5
93.3
9.6
43.4
43.2
37.6
8.3
Total
n/a
n/a
n/a
n/a
1,518
n/a
n/a
2,187
n/a
400
1,529
110
174
376
n/a
n/a
n/a
479
n/a
n/a
283
1,153
1,534
n/a
3,312
799
n/a
n/a
n/a
NYC res.
n/a
n/a
n/a
n/a
613
n/a
n/a
575
n/a
136
35
21
108
327
n/a
n/a
n/a
92
n/a
n/a
94
312
624
n/a
282
116
n/a
n/a
n/a
Instit. Total
NYC as %
n/a
n/a
n/a
n/a
40.4
n/a
n/a
26.3
n/a
34.0
22.9
19.1
62.1
87.0
n/a
n/a
n/a
19.2
n/a
n/a
33.2
27.1
40.7
n/a
8.5
14.5
n/a
n/a
n/a
Total
1,086
2,289
1,177
608
1,518
1,685
7,052
23,234
955
782
14,060
170
669
8,003
3,301
875
2,077
651
8,768
118
283
8,390
1,571
747
39,408
13,670
2,819
4,540
193
NYC res
851
440
1,154
565
613
993
4,945
7,205
453
172
1,752
41
215
6,395
1,236
54
961
92
2,352
22
94
2,481
639
655
6,153
5,622
1,750
1,058
16
NYC as %
78.4
19.2
98.0
92.9
40.4
58.9
70.1
31.0
47.4
22.0
12.5
24.1
32.1
79.9
37.4
6.2
46.3
14.1
26.8
18.6
33.2
29.6
40.7
87.7
15.6
41.1
62.1
23.3
8.3
FATAL SUBTRACTION
Appendix A, cont'd
Undergraduate
Total
ST. FRANCIS COLLEGE
ST. JOHN'S UNIVERSITY*
ST. JOSEPH'S COLLEGE*
ST. JOSEPH'S SEMINARY*
TEACHERS COLLEGE
TOURO COLLEGE
UNION THEOLOGICAL SEMINARY
VAUGHN COLL. AERONAUT. & TECH.
WAGNER COLLEGE
YESHIVA UNIVERSITY
total (all institutions)
NYC res.
Graduate
NYC as %
Total
NYC res.
Professional**
NYC as %
Total
NYC res.
2,326
14,848
4,945
n/a
n/a
9,298
n/a
1,260
1,929
2,802
120,959
1,996
9,293
1,066
n/a
n/a
7,174
n/a
934
637
560
52,907
85.8
62.6
21.6
n/a
n/a
77.1
n/a
74.1
33.0
20.0
43.7
n/a
3,591
381
86
5,032
4,691
97
n/a
330
1,519
69,021
n/a
2,001
156
32
1,841
3,204
13
n/a
242
289
22,175
n/a
55.7
40.9
37.2
36.6
68.3
13.4
n/a
73.3
19.0
32.1
n/a
1,374
n/a
50
n/a
840
111
n/a
n/a
1,803
18,032
n/a
820
n/a
9
n/a
163
35
n/a
n/a
61
4,423
12,734
18,854
8,367
11,172
9,098
11,130
n/a
8,108
4,340
15,361
12,252
15,356
13,592
n/a
5,170
11,772
12,799
10,190
18,239
7,450
10,029
7,343
10,536
n/a
6,935
3,880
12,231
9,222
14,173
11,265
n/a
4,775
10,654
9,511
80.0
96.7
89.0
89.8
80.7
94.7
n/a
85.5
89.4
79.6
75.3
92.3
82.9
n/a
92.4
90.5
74.3
2,803
n/a
n/a
4,213
3,001
1,312
4,234
2,173
n/a
4,882
1,828
n/a
n/a
n/a
n/a
n/a
n/a
1,575
n/a
n/a
3,301
1,934
1,181
3,384
1,269
n/a
3,853
879
n/a
n/a
n/a
n/a
n/a
n/a
56.2
n/a
n/a
78.4
64.5
90.0
79.9
58.4
n/a
78.9
48.1
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
447
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
242
n/a
n/a
n/a
Instit. Total
NYC as %
Total
NYC res
NYC as %
n/a
2,326
59.7 19,813
n/a
5,326
18
136
n/a
5,032
19.4 14,829
31.5
208
n/a
1,260
n/a
2,259
3.4
6,124
24.5 208,012
1,996
12,114
1,222
41
1,841
10,541
48
934
879
910
79,505
85.8
61.4
22.9
30.1
36.6
71.1
23.1
74.1
38.9
14.9
38.2
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
54.1
n/a
n/a
n/a
11,765
18,239
7,450
13,330
9,277
11,717
3,384
8,204
3,880
16,084
10,101
14,173
11,265
242
4,775
10,654
9,511
75.7
96.7
89.0
86.6
76.7
94.2
79.9
79.8
89.4
79.3
71.7
92.3
82.9
54.1
92.4
90.5
74.3
CUNY SYSTEM
CUNY BARUCH COLL.
CUNY BORO OF MANHATT. CC.
CUNY BRONX CC
CUNY BROOKLYN COLLEGE
CUNY CITY COLLEGE
CUNY COLL. OF STATEN ISLAND
CUNY GRAD. SCH. & UNIV. CNTR
CUNY HERBERT H. LEHMAN COLL
CUNY HOSTOS COMM. COLL.
CUNY HUNTER COLLEGE
CUNY JOHN JAY CRIM. JUSTICE
CUNY KINGSBOROUGH CC
CUNY LAGUARDIA COMM. COLL.
CUNY LAW SCHOOL
CUNY MEDGAR EVERS COLLEGE
CUNY NYC COLL. OF TECHNOL.
CUNY QUEENSBOROUGH CC
96
15,537
18,854
8,367
15,385
12,099
12,442
4,234
10,281
4,340
20,243
14,080
15,356
13,592
447
5,170
11,772
12,799
FATAL SUBTRACTION
Appendix A, cont'd
Undergraduate
Total
CUNY QUEENS COLLEGE
CUNY YORK COLLEGE
total (CUNY system)
NYC res.
Graduate
NYC as %
Total
NYC res.
Professional**
NYC as %
Total
NYC res.
Instit. Total
NYC as %
Total
12,628
5,743
188,476
9,953
4,981
161,367
78.8
86.7
85.6
4,767
n/a
29,213
2,711
n/a
20,087
56.9
n/a
68.8
n/a
n/a
447
n/a
n/a
242
n/a 17,395
n/a
5,743
54.1 218,136
n/a
10,378
354
1,049
11,781
n/a
5,074
301
239
5,614
n/a
48.9
85.0
22.8
47.7
12
135
436
152
735
1
70
295
34
400
8.3
51.9
67.7
22.4
54.4
284
n/a
779
n/a
1,063
158
n/a
490
n/a
648
55.6
n/a
62.9
n/a
61.0
NYC res
NYC as %
12,664
4,981
181,696
72.8
86.7
83.3
159
5,144
1,086
273
6,662
53.7
48.9
69.2
22.7
49.0
SUNY SYSTEM
SUNY COLL. OF OPTOMETRY AT NYC
SUNY FASHION INSTITUTE OF TECH.
SUNY HEALTH SCI. CNTR AT BKLYN
SUNY MARITIME COLL. FT. SCHUYLER
total (SUNY system)
296
10,513
1,569
1,201
13,579
* Includes enrollment figures from campuses located in New York City and the greater metropolitan area.
**Degrees in the following: Chiropractic (D.C. or D.C.M.), Dentistry (D.D.S.), Law (L.L.B., J.D.), Medicine (M.D.), Optometry (O.D.), Osteopathic Medicine
(D.O.), Pharmacy (Pharm.D.), Podiatry (D.P.M., D.P., or Pod.D.), Theology (M.Div., M.H.L., B.D., or Ordination), and Veterinary Medicine (D.V.M.)
Source: NYSED Office of Research and Information Systems. Enrollment figures are for 2004 and include full-time and part-time students. Data n/a for CUNY-Sophie Davis School of BioMedical Education
97
FATAL SUBTRACTION
Appendix B
Private College and University Property Tax Expenditures, 2005
College/University
(Excode 1601)
Tax
No. of
Properties Expenditure
Student Dorm
(Excode 1603)
Faculty & Student
Hsg (Excode 1604)
Dormitory Authority
(Excode 3500)
Institution Total
(all categories)
Tax
No. of
Tax
No. of
Tax
No. of
Tax
No. of
Properties Expenditure Properties Expenditure Properties Expenditure Properties Expenditure
INSTITUTION
BANK STREET COLLEGE
BORICUA COLLEGE
BRAMSON ORT COLLEGE
BROOKLYN LAW SCHOOL
COLLEGE OF MT ST VINCENT
COLLEGE OF NEW ROCHELLE
COLUMBIA UNIVERSITY
BARNARD COLLEGE
TEACHERS COLLEGE
subtot. Columbia & affiliates
COOPER UNION
CORNELL U. MED. CAMPUS
FORDHAM UNIVERSITY
GEN. THEOLOG. SEMINARY
HEBREW UNION COLLEGE
JEWISH THEOLOG. SEMINARY
L.I. UNIV. - BKLYN CAMPUS
MANHATTAN COLLEGE
MANHATTAN SCH. OF MUSIC
MARYMOUNT MANHATTAN
MT. SINAI SCH. OF MED. NYU
NEW SCHOOL UNIVERSITY
NY COLL. PODIATRIC MED.
NY INSTIT OF TECH
NY LAW SCHOOL
NY SCH. INTERIOR DESIGN
NEW YORK UNIVERSITY
1
4
6
6
3
1
31
4
3
38
6
2
14
1
2
4
3
8
1
1
1
9
6
2
5
2
67
796,960
300,625
179,877
3,196,004
3,702,333
178,055
26,467,275
4,561,997
12,141,331
43,170,603
18,300,925
2,006,523
23,022,089
1,276,145
797,969
1,141,014
3,210,033
4,098,535
2,938,008
1,013,854
427,735
2,628,085
214,236
618,401
1,091,028
341,987
24,319,718
0
0
0
0
0
0
209,504
3
0
0
0
0
143 15,973,945
0
1
284,161
1
145 16,258,106
0
0
0
0
22,363
2
0
1
0
0
37,951
2
0
0
0
0
0
0
9 1,804,652
359,617
4
497,223
4
0
0
0
0
20,805
2
14,214
1
24 8,735,312
98
0
0
0
0
0
0
57,552
2
0
0
0
0
84 15,072,294
86,758
1
613,498
4
89 15,772,550
488,264
1
115,458
2
9,987
1
187,639
3
0
0
8,028
1
0
0
818,827
2
0
0
0
0
0
0
189,152
1
0
0
0
0
0
0
0
0
11 6,510,583
0
0
0
0
0
0
3
1
0
4
1
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
3
0
0
0
0
0
0
3,704,287
122,066
0
3,826,353
830,200
0
0
0
0
0
0
223,451
0
0
0
0
0
0
0
0
2,567,421
1
4
6
11
3
1
261
7
8
276
8
4
17
5
2
7
3
11
1
10
5
14
6
2
7
3
105
796,960
300,625
179,877
3,463,060
3,702,333
178,055
61,217,801
4,770,821
13,038,990
79,027,612
19,619,389
2,121,981
23,054,439
1,463,784
797,969
1,186,993
3,210,033
5,140,813
2,938,008
2,818,506
787,352
3,314,460
214,236
618,401
1,111,833
356,201
42,133,034
FATAL SUBTRACTION
Appendix B, cont'd
Private College and University Property Tax Expenditures, 2005
College/University
(Excode 1601)
PACE UNIVERSITY
POLYTECHNIC UNIVERSITY
PRATT INSTITUTE
ROCKEFELLER UNIVERSITY
ST. FRANCIS COLLEGE
ST. JOHN'S UNIVERSITY
ST. JOSEPH'S COLLEGE
ST. JOSEPH'S SEMINARY
THE NY ACADEMY OF ART
TOURO COLLEGE
UNION THEOLOG. SEMINARY
VAUGHN COLL. AERONAUT.
WAGNER COLLEGE
YESHIVA UNIVERSITY
total (all institutions)
Faculty & Student
Hsg (Excode 1604)
Student Dorm
(Excode 1603)
Dormitory Authority
(Excode 3500)
Institution Total
(all categories)
No. of
Tax
No. of
Tax
No. of
Tax
No. of
Tax
No. of
Tax
Properties Expenditure Properties Expenditure Properties Expenditure Properties Expenditure Properties Expenditure
2
933,472
0
0
0
0
1
3,545,967
3
4,479,439
3
2,985,069
0
0
0
0
0
0
3
2,985,069
13
4,840,766
1
136,756
1
633,337
0
0
15
5,610,859
2
2,426,796
2
331,801
0
0
1
3,828,434
5
6,587,031
1
1,846,122
0
0
0
0
0
0
1
1,846,122
3 22,830,939
5
21,607
0
0
3
963,414
11 23,815,960
9
724,631
0
0
0
0
0
0
9
724,631
2
701,259
0
0
0
0
0
0
2
701,259
1
117,526
0
0
0
0
0
0
1
117,526
5
2,175,499
0
0
3
319,134
0
0
8
2,494,633
2
2,221,904
0
0
0
0
0
0
2
2,221,904
2
593,180
0
0
0
0
0
0
2
593,180
4
3,351,446
2
16,414
0
0
3
1,103,134
9
4,470,994
37
4,218,858
4 5,625,871
82 1,766,278
0
0
123 11,611,007
279 188,938,209
211 34,092,196
199 26,876,789
17 16,888,374
706 266,795,568
99
FATAL SUBTRACTION
Appendix C
How City Project Recreated the [Property Tax Exemption] Universe
It took a lot longer than seven days for City Project to create a reliable property tax exemption universe
or database of higher education properties that forms the foundation of much of this report.
We started with a 400-page printout of the city’s 2005 tax expenditures for over 900,000 properties
derived from records collected and maintained by the New York City Department of Finance (DOF) and
obtained for City Project by the NYC Independent Budget Office (IBO).* DOF groups tax-exempt
properties into roughly 200 categories of exemptions; each exemption category is
assigned a different “exemption code” (or “excode”). For each tax-exempt property within any category,
IBO’s exemption analysis contains the following information: the name of the owner, the property’s
location (street address as well as block and lot number), assessed value, exempt value, and amount
of its tax expenditure.
For this report, five exemption categories were of primary interest to us: college/university (Exemption Code
1601), elementary/high school (Exemption Code 1602), student dorms (Exemption Code 1603), faculty & student
housing (Exemption Code 1604) and religious school (Exemption Code 1022). A sixth category, properties listed
as “owned by” by the Dormitory Authority of the State of New York (Exemption Code 3500), contained higher
education properties of various types and usages and owned by various institutions. DASNY is a state-controlled
public authority that helps public and private education institutions, healthcare facilities and other institutions
finance property acquisitions, new construction projects and facility upgrades through tax-exempt bonds.**
As we began to review the properties listed under each category, it became apparent that DOF record-keeping
inconsistencies and outright errors were rampant. As a result, we had to conduct a labor-intensive line-by-line
review of the names of hundreds of property owners in the six categories listed above, as well as a less thorough
review of several other categories for the possibility of relevant “stray” properties.
One major type of DOF coding inconsistency arose from variations or differences in the names in which
institutions held title to their properties or in how DOF entered these names into its records. For example,
Columbia University’s properties were variously recorded under “Columbia “or “Trustees of Columbia” or any
number of variations of these.
Since DOF’s “sorting” of properties by owner was done alphabetically, such name variations were not grouped
together as one ownership body of properties. In order to produce an accurate and comprehensive list of
properties owned by each institution, we had to search for all name variations, standardize them and group them
together under the correct institutional owner. In addition, slight misspellings or variations of the abbreviation of an
institution’s name also had to be identified and corrected in order to recreate an accurate universe for each
institutional owner.
DOF errors we encountered fell into two general categories: miscodings and “mystery entries.” Miscodings
involved numerous instances of institutional listings coded or filed under incorrect exemption categories. For
example, we found elementary schools listed as university properties, museums listed as elementary schools,
etc., and other miscategorizations of the types and/or uses of properties. These errors were relatively easy to
correct once we identified them.
“Mystery entries,” on the other hand, were properties whose listed owner offered no clue as to the nature of the
property, its actual institutional owner (if any), and whether it was indeed correctly categorized. For example, a
number of properties coded as university properties were listed under the names of private individuals, for-profit
corporations, various public authorities (including the state Dormitory Authority) or city agencies. We researched
every such anomalous ownership listing individually in order to be confident of the accuracy of our data, with
respect to both individual institutions’ property holdings and tax exemptions, and the cumulative categorical totals.
Appendix C, cont’d
100
FATAL SUBTRACTION
IBO generously assisted us in tracking down several anomalous ownerships that required access to DOF data
bases which we lacked, while we used other methods and resources to verify additional institutional ownership.
Despite these efforts, we were unable to determine the exact nature of 17 educational properties categorized by
DOF as Dormitory Authority properties but in fact owned by various private universities. This resulted in our
having to list them under the category of Dormitory Authority rather than by the proper DOF category in several
tables throughout this report.
Finally, the biggest (literally) anomaly entailed the “four“ properties that make up St. John’s University campus in
Queens. All four properties are listed in DOF records as owned by the Dormitory Authority; three are also coded
as DASNY properties (Exemption Code 3500) while one was coded as a university property (Exemption Code
1601). The latter costs the city almost $22 million in annual tax expenditures, making it the single most expensive
university-related tax expenditure in the city. In fact, however, the single “property” in question is actually 24 or 25
separate buildings (city records differ on the exact number) located on St. John’s main campus. To our
knowledge, this treatment of multiple buildings as one property did not occur in other institutions, including those
with a traditional campus setting. But the St John’s anomaly results in an understatement of both the number of
properties owned by St. John’s as well the cumulative number of properties owned by all city-based colleges and
universities.
The figures (number of properties, value of tax expenditure per category, etc.) cited in this report, then, derive
from our corrected and resorted “database” that was produced from our research of many of the individual
properties listed in the original IBO Exemption Analysis of DOF’s records. We made every effort to establish the
accuracy of every property listing, but given the sheer number of properties and error-ridden nature of the original
files, some margin of error is inevitable. We did however, err on the side caution: if we could not verify the owner
or nature of a questionable property, we did not include it in our database.
While our time-consuming research efforts did not significantly alter the total amount of tax expenditures for
higher educational institutions, they did pin down and/or change the distribution of ownership among the various
educational institutions.
* This document is referred to as IBO Exemption Analysis, August 5, 2005, throughout this report.
** The joint state legislative Becker Committee specifically criticized tax exemptions for properties financed by
DASNY based on “the lack of adequate statutory definitions of the type of property to be exempted. To this
problem, City Project adds our complaint that over a six-month period, DASNY, a public authority, failed to
provide us with any information on a relatively small number of specific DASNY-funded university projects that we
submitted to them, on the grounds that they could not find the information in their files without spending an
inordinate amount of time.
101
FATAL SUBTRACTION
Appendix D
FY 2005 Select Agency Expenditures for Proposed Fee for Service*
($, city funds only)
Agency
Police
Fire
Sanitation
Transportation
Correction
Finance
District Attorneys
Environ. Protection
Info. Tech. & Telecom.
Debt svc (city direct)
Expense Budget
3,275,266,263
1,028,598,767
1,016,143,100
316,259,720
787,408,206
191,619,799
194,292,460
719,393,996
112,249,193
2,397,569,777
Fringe
1,015,845,276
359,943,031
223,346,434
81,671,484
214,504,037
42,792,071
62,881,124
116,789,559
17,799,301
n/a
Pension
1,117,684,472
520,669,880
70,091,172
16,739,968
104,265,114
8,389,544
12,438,150
24,129,430
3,687,437
n/a
Total relevant agency costs
City Tax Revenue
Property taxes
Other taxes
(less intra-city revenue)
Total budget
Total
5,408,796,011
1,909,211,678
1,309,580,706
414,671,172
1,106,177,357
242,801,414
269,611,734
860,312,985
133,735,931
2,397,569,777
14,052,468,765
11,549,680,000
15,511,523,000
-1,146,145,586
25,915,057,414
47,209,537,582
Source: Adopted Expense, Revenue, Contract Budget FY 2005
* Figures are as of the adoption of the FY 2005 budget. End-of-fiscal-year actuals will differ.
102
FATAL SUBTRACTION
Appendix E
Sample of Proposed Service Charges for Universities
Compared to Current Tax Expenditures
Assessed
Value
2005
Proposed User
Fee/Svc Charge
at 6.6%
Tax
Expenditure
2005
Citywide Total
2,613,332,458
172,479,942
266,795,568
Columbia
NYU
Fordham
St. John's
Cooper Union
L.I.U.-Bklyn
Polytechnic
Touro
St. Francis
Boricua
623,558,768
502,303,875
207,222,295
215,788,045
174,857,400
28,630,000
26,631,000
22,976,580
16,470,000
2,682,000
41,154,879
33,152,056
13,676,671
12,242,011
11,541,284
1,889,580
1,752,646
1,516,454
1,087,020
177,012
61,217,801
42,133,034
23,054,439
23,815,960
19,619,389
3,210,033
2,985,069
2,494,633
1,846,122
300,625
103
FATAL SUBTRACTION
Appendix F
Columbia University and Affiliates
COLUMBIA UNIVERSITY
No. of
Boro Block
Lot
Street Address
Assessed
Properties
Value
College/University Properties*
1
1886
1
1100 WEST 114 STREET
49,050,000
1
1963
60
1255 AMSTERDAM AVENUE
48,150,000
1
1961
1
1145 AMSTERDAM AVENUE
29,745,000
1
1961
39
1165 AMSTERDAM AVENUE
18,855,000
1
1995
53
558 RIVERSIDE DRIVE
9,315,000
1
2124
35
1148 ST NICHOLAS AVENUE
8,550,000
1
2124
25
40 AUDUBON AVENUE
8,235,000
1
1896
9
611 WEST 114 STREET
4,374,000
1
2124
33
554 WEST 168 STREET
4,081,500
1
1995
44
628 WEST 125 STREET
3,550,500
1
2124
39
1146 ST NICHOLAS AVENUE
2,727,000
1
2138
95
617 WEST 168 STREET
2,412,000
1
1961
37
1161 AMSTERDAM AVENUE
904,500
1
1885
37
508 WEST 114 STREET
634,500
1
1896
79
612 WEST 116 STREET
351,000
1
1896 9009
611 WEST 114 STREET
237,150
1
1885
56
548 WEST 114 STREET
201,684
1
1962
13
405 WEST 118 STREET
513,000
1
1896
51
635 WEST 115 STREET
142,200
1
1884
58
560 WEST 113 STREET
139,950
1
1885
152
540 WEST 114 STREET
112,050
1
1896
38
WEST 114 STREET
97,650
1
1895
49
611 WEST 113 STREET
44,944
1
1884
52
544 WEST 113 STREET
99,963
1
1883
54
534 WEST 112 STREET
805,500
1
2124
17
1132 ST NICHOLAS AVENUE
29,700,000
1
1885 1001
2900 BROADWAY
16,328,700
1
1456 1022
425 EAST 61 STREET
103,702
1
1884
1
2880 BROADWAY
3,073,500
1
1875 1001
2700 BROADWAY
2,837,250
104
Exempt
Status
Exemption Exempt
Code
Value
FULL
PARTIAL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
PARTIAL
FULL
FULL
FULL
FULL
FULL
PARTIAL
PARTIAL
FULL
FULL
PARTIAL
FULL
PARTIAL
1601
1601
1601
1601
1601
1601
1601
1601
1601
1601
1601
1601
1601
1601
1601
1601
1601
1601
1601
1601
1601
1601
1601
1601
1601
1505
1505
1505
3500
1986
49,050,000
40,786,020
29,745,000
18,855,000
9,315,000
8,550,000
8,235,000
4,374,000
4,081,500
3,550,500
2,727,000
2,412,000
904,500
634,500
351,000
237,150
201,684
165,200
142,200
139,950
112,050
97,650
44,944
52,887
0
29,700,000
16,328,700
60,889
3,073,500
876,928
Tax
Expenditure
5,498,014
4,571,705
3,334,117
2,113,457
1,160,183
958,369
923,061
490,282
457,495
397,976
305,669
270,361
101,385
71,121
39,344
26,582
25,120
20,576
15,939
15,687
12,560
10,946
7,148
6,587
0
3,329,073
1,830,284
6,825
344,509
98,295
FATAL SUBTRACTION
Appendix F, cont'd
Columbia University and Affiliates
COLUMBIA UNIVERSITY
No. of
Boro Block
Lot
Street Address
Properties
College/University Properties, cont'd
1
1885
53
542 WEST 114 STREET
31
SUBTOTAL:
Assessed
Value
Exempt
Status
Exemption Exempt
Code
Value
Tax
Expenditure
197,550 FULL
245,569,793
1602
197,550
235,002,302
24,605
26,467,275
Dormitory Authority Properties
1
2139
219
1
1884
61
1
2139
229
3
78 HAVEN AVENUE
2890 BROADWAY
98 HAVEN AVENUE
SUBTOTAL:
31,410,000 FULL
1,557,000 FULL
56,692 FULL
33,023,692
3500
3500
3500
31,410,000
1,557,000
56,692
33,023,692
3,520,747
174,524
9,016
3,704,287
Student Dorm Properties
1
1896
1
1896
1
1976
1
2139
1
1885
1
1884
1
6706
1
1895
1
1975
1
1216
1
717
1
6810
1
1896
1
1884
1
1881
1
1885
1
1961
1
1883
1
2139
1
1895
74
609
606
154
52
2910
2901
195
620
431
549
523
2941
503
531
548
521
1240
512
536
11,295,000
6,165,000
5,985,000
3,406,500
3,195,000
2,097,000
4,171,500
1,359,000
1,323,000
1,125,000
823,500
891,000
2,506,500
666,000
832,500
657,000
1,278,000
877,500
810,000
922,500
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
11,295,000
6,165,000
5,985,000
3,406,500
3,195,000
2,097,000
1,556,670
1,223,100
1,323,000
1,125,000
823,500
757,350
721,755
666,000
641,012
657,000
584,997
506,840
405,270
384,190
1,406,792
691,035
670,859
381,835
358,128
235,053
193,883
152,337
148,295
126,101
102,567
94,328
89,895
82,950
79,838
73,643
72,861
63,127
50,476
47,851
57
30
43
210
61
156
1
32
29
1
57
1
47
11
54
57
57
42
275
55
MORNINGSIDE DRIVE
WEST 115 STREET
WEST 115 STREET
HAVEN AVENUE
HAVEN AVENUE
BROADWAY
BROADWAY
CLAREMONT AVENUE
WEST 113 STREET
RIVERSIDE DRIVE
WEST 113 STREET
WEST 112 STREET
BROADWAY
WEST 121 STREET
WEST 112 STREET
CATHEDRAL PARKWAY
WEST 112 STREET
AMSTERDAM AVENUE
WEST 112 STREET
WEST 113 STREET
105
FULL
FULL
FULL
FULL
FULL
FULL
PARTIAL
PARTIAL
FULL
FULL
FULL
PARTIAL
PARTIAL
FULL
PARTIAL
FULL
PARTIAL
FULL
PARTIAL
PARTIAL
FATAL SUBTRACTION
Appendix F, cont'd
Columbia University and Affiliates
COLUMBIA UNIVERSITY
No. of
Boro Block
Lot
Street Address
Properties
Student Dorm Properties, cont'd
1
1883
11
540 WEST 112 STREET
1
1994
72
535 WEST 111 STREET
1
1884
15
529 WEST 111 STREET
1
1896
65
547 RIVERSIDE DRIVE
1
1976
26
548 RIVERSIDE DRIVE
1
1885
11
518 WEST 111 STREET
1
1884
18
541 WEST 113 STREET
1
1976
29
549 RIVERSIDE DRIVE
1
1884
48
526 WEST 113 STREET
1
1883
57
511 WEST 113 STREET
1
1895
165
435 RIVERSIDE DRIVE
1
1883
14
526 WEST 114 STREET
1
1994
88
2915 BROADWAY
1
1994
84
520 WEST 114 STREET
1
1882
42
3074 BROADWAY
1
1994
81
608 WEST 113 STREET
1
1884
43
511 WEST 112 STREET
1
1885
24
607 WEST 113 STREET
1
1896
87
604 WEST 115 STREET
1
1976
41
526 WEST 112 STREET
1
1885
27
608 WEST 115 STREET
1
1895
62
507 WEST 113 STREET
1
1883
50
530 WEST 112 STREET
1
1885
43
535 WEST 112 STREET
1
1976
61
629 WEST 115 STREET
1
1895
27
506 WEST 113 STREET
1
1896
55
452 RIVERSIDE DRIVE
1
1884
21
627 WEST 115 STREET
1
1884
39
528 RIVERSIDE DRIVE
1
1905
120
502 WEST 113 STREET
1
1884
154
556 WEST 113 STREET
Assessed
Value
438,300
729,000
850,500
999,000
810,000
729,000
787,500
1,215,000
900,000
1,102,500
967,500
299,250
372,558
855,000
792,000
260,550
589,500
805,500
652,500
522,000
783,000
702,000
571,500
225,000
742,500
477,000
1,012,500
218,250
706,500
450,000
167,850
106
Exempt
Status
Exemption Exempt
Code
Value
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
FULL
PARTIAL
PARTIAL
PARTIAL
FULL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
FULL
PARTIAL
PARTIAL
PARTIAL
FULL
PARTIAL
PARTIAL
FULL
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
372,555
370,225
346,676
333,528
331,269
329,522
322,955
317,704
316,764
314,171
305,523
299,250
298,046
292,711
265,390
260,550
257,464
250,637
242,852
242,067
239,012
234,745
226,721
225,000
207,378
205,352
200,336
218,250
189,128
187,084
167,850
Tax
Expenditure
46,402
46,112
43,178
41,541
41,260
41,042
40,224
39,570
39,453
39,130
38,053
37,272
37,122
36,457
33,054
32,452
32,067
31,217
30,247
30,149
29,769
29,237
28,238
28,024
25,829
25,577
24,952
24,464
23,556
23,301
20,906
FATAL SUBTRACTION
Appendix F, cont'd
Columbia University and Affiliates
COLUMBIA UNIVERSITY
No. of
Boro Block
Lot
Street Address
Properties
Student Dorm Properties, cont'd
1
1895
52
550 WEST 113 STREET
1
1896
28
509 WEST 112 STREET
1
1896
32
415 RIVERSIDE DRIVE
1
1884
10
558 WEST 113 STREET
1
1896
53
1171 AMSTERDAM AVENUE
1
1963
19
554 WEST 114 STREET
1
1884
40
552 WEST 114 STREET
1
1990
54
548 WEST 113 STREET
1
1994
45
614 WEST 113 STREET
1
1884
24
506 WEST 122 STREET
1
1895
78
519 WEST 121 STREET
1
1884
57
540 WEST 113 STREET
1
1962
1
542 WEST 113 STREET
1
1885
58
527 WEST 121 STREET
1
1884
54
530 WEST 114 STREET
1
1895
129
520 WEST 122 STREET
1
1976
39
554 WEST 113 STREET
1
1976
16
528 WEST 114 STREET
1
1884
51
524 WEST 122 STREET
1
1884
151
610 WEST 114 STREET
1
1976
10
614 WEST 114 STREET
1
1885
148
616 WEST 114 STREET
1
1976
48
612 WEST 114 STREET
1
1884
56
526 WEST 122 STREET
1
1885
48
552 WEST 113 STREET
1
1976
51
530 WEST 122 STREET
1
1895
65
124 LA SALLE STREET
1
1895
66
610 WEST 113 STREET
1
1895
67
502 WEST 122 STREET
1
1885
7
617 WEST 115 STREET
1
464 9006
100 HAVEN AVENUE
Assessed
Value
158,850
344,250
163,507
128,524
1,462,500
124,956
110,269
121,950
119,250
368,100
481,500
99,963
99,963
562,500
102,667
589,500
102,667
88,539
389,700
81,000
81,000
81,000
81,000
407,250
73,800
308,250
238,950
499,500
290,250
259,200
71,550,000
107
Exempt
Status
Exemption Exempt
Code
Value
FULL
PARTIAL
PARTIAL
FULL
PARTIAL
PARTIAL
FULL
FULL
FULL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
FULL
FULL
FULL
FULL
PARTIAL
FULL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
FULL
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
3500
158,850
143,051
138,981
128,524
118,355
112,460
110,269
121,950
119,250
98,666
93,606
89,967
89,967
88,521
87,267
85,105
82,134
81,441
74,880
81,000
81,000
81,000
81,000
72,878
73,800
55,782
55,104
50,616
49,680
28,417
71,550,000
Tax
Expenditure
19,785
17,817
17,310
16,008
14,741
14,007
13,734
13,669
13,367
12,289
11,659
11,205
11,205
11,025
10,869
10,600
10,230
10,143
9,326
9,079
9,079
9,079
9,079
9,077
8,272
6,948
6,863
6,304
6,188
3,539
8,020,039
FATAL SUBTRACTION
Appendix F, cont'd
Columbia University and Affiliates
COLUMBIA UNIVERSITY
No. of
Boro Block
Lot
Street Address
Properties
Student Dorm Properties, cont'd
1
1471
28
2880 BROADWAY
1
3273
208
100 MORNINGSIDE DRIVE
84
SUBTOTAL:
Faculty & Student Housing Properties
1
1881
4
1
1995
63
1
1867
42
1
1867
67
1
1976
36
1
1883
59
1
1962
19
1
1962
11
1
1895
23
1
1893
3
1
1990
33
1
1895
16
1
1962
56
1
1896
34
1
1867
23
1
1867
74
1
1962
38
1
1963
1
1
1867
49
1
1993
53
1
1895
39
1
1885
40
1
1990
29
1
1867
70
1
1867
52
1
1884
6
2828
564
1125
420
1254
2874
88
415
2891
362
47
2881
90
612
402
1129
1201
1221
415
146
410
514
39
430
411
539
BROADWAY
RIVERSIDE DRIVE
AMSTERDAM AVENUE
WEST 116 STREET
AMSTERDAM AVENUE
BROADWAY
MORNINGSIDE DRIVE
WEST 118 STREET
BROADWAY
RIVERSIDE DRIVE
CLAREMONT AVENUE
BROADWAY
MORNINGSIDE DRIVE
WEST 115 STREET
WEST 115 STREET
AMSTERDAM AVENUE
AMSTERDAM AVENUE
AMSTERDAM AVENUE
WEST 115 STREET
CLAREMONT AVENUE
RIVERSIDE DRIVE
WEST 114 STREET
CLAREMONT AVENUE
WEST 116 STREET
WEST 115 STREET
WEST 112 STREET
Assessed
Value
Exempt
Status
3,073,500 FULL
1,714,500 FULL
155,478,113
15,368,500
12,600,000
10,170,000
2,155,500
1,336,500
3,523,500
5,265,000
913,500
2,767,500
3,937,500
864,000
1,935,000
1,530,000
585,000
675,000
1,246,500
2,990,700
2,074,500
949,500
1,062,000
1,575,000
882,000
1,426,500
999,000
787,500
792,000
Appendix C, cont'd
108
PARTIAL
FULL
FULL
FULL
FULL
PARTIAL
PARTIAL
FULL
PARTIAL
PARTIAL
FULL
PARTIAL
PARTIAL
FULL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
Exemption Exempt
Code
Value
Tax
Expenditure
3500
3500
3,073,500
1,714,500
130,961,420
344,509
213,541
15,072,294
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
14,773,050
12,600,000
10,170,000
2,155,500
1,336,500
1,273,464
923,975
913,500
899,627
847,584
864,000
596,018
528,854
585,000
504,631
455,625
432,939
418,934
355,692
349,604
349,189
347,328
344,125
324,072
322,911
322,653
1,655,911
1,569,330
1,139,955
241,610
166,461
142,743
115,081
113,776
112,049
105,567
96,846
74,234
65,869
65,573
62,852
56,748
53,923
52,178
44,301
43,543
43,491
43,260
42,861
40,363
40,219
40,186
FATAL SUBTRACTION
Appendix F, cont'd
Columbia University and Affiliates
COLUMBIA UNIVERSITY
No. of
Boro Block
Lot
Street Address
Properties
Faculty & Student Housing Properties, cont'd
1
1867
46
419 WEST 115 STREET
1
1883
48
522 WEST 112 STREET
1
1990
5
15 CLAREMONT AVENUE
1
1885
15
533 WEST 113 STREET
1
1963
56
130 MORNINGSIDE DRIVE
1
1963
48
110 MORNINGSIDE DRIVE
1
1883
18
521 WEST 111 STREET
1
1962
70
1211 AMSTERDAM AVENUE
1
1867
54
403 WEST 115 STREET
1
1990
10
21 CLAREMONT AVENUE
1
1990
61
450 RIVERSIDE DRIVE
1
1990
13
25 CLAREMONT AVENUE
1
1867
69
424 WEST 116 STREET
1
1994
93
530 RIVERSIDE DRIVE
1
1896
77
610 WEST 116 STREET
1
1962
44
421 WEST 119 STREET
1
1962
61
414 WEST 120 STREET
1
1990
67
445 RIVERSIDE DRIVE
1
1198
53
52 WEST 85 STREET
1
1962
18
80 MORNINGSIDE DRIVE
1
1990
52
456 RIVERSIDE DRIVE
1
1990
44
464 RIVERSIDE DRIVE
1
1884
46
530 WEST 113 STREET
1
1990
50
460 RIVERSIDE DRIVE
1
1896
74
602 WEST 116 STREET
1
1990
64
448 RIVERSIDE DRIVE
1
1990
53
454 RIVERSIDE DRIVE
1
1994
60
181 CLAREMONT AVENUE
1
1990
22
29 CLAREMONT AVENUE
1
1962
9
417 WEST 118 STREET
1
1867
64
404 WEST 116 STREET
Assessed
Value
837,000
401,850
1,129,500
711,000
639,000
1,746,000
589,500
3,055,500
832,500
1,444,500
1,062,000
1,111,500
274,500
1,120,500
774,000
1,890,000
1,642,500
990,000
172,800
994,500
1,030,500
832,500
495,000
828,000
949,500
1,021,500
900,000
517,500
882,000
729,000
376,650
109
Exempt
Status
Exemption Exempt
Code
Value
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
FULL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
FULL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
321,512
321,480
319,205
313,276
311,221
310,804
294,750
292,269
288,628
266,285
257,400
250,464
274,500
242,109
241,658
231,819
223,863
220,828
172,800
216,612
202,587
199,254
196,086
195,523
192,984
186,165
178,670
174,720
171,097
160,531
149,405
Tax
Expenditure
40,044
40,040
39,757
39,019
38,763
38,711
36,711
36,402
35,949
33,166
32,059
31,195
30,769
30,155
30,099
28,873
27,882
27,504
27,482
26,979
25,232
24,817
24,423
24,352
24,036
23,187
22,253
21,761
21,310
19,994
18,608
FATAL SUBTRACTION
Appendix F, cont'd
Columbia University and Affiliates
COLUMBIA UNIVERSITY
No. of
Boro Block
Lot
Street Address
Properties
Faculty & Student Housing Properties, cont'd
1
1962
7
419 WEST 118 STREET
1
1885
46
524 WEST 114 STREET
1
1990
25
35 CLAREMONT AVENUE
1
1962
31
424 WEST 119 STREET
1
1962
5
421 WEST 118 STREET
1
1962
26
414 WEST 119 STREET
1
1885
55
546 WEST 114 STREET
1
1885
54
544 WEST 114 STREET
1
1883 1167
516 WEST 112 STREET
1
1883 1163
516 WEST 112 STREET
1
1895
163
604 WEST 114 STREET
1
1883 1159
516 WEST 112 STREET
1
1883 1155
516 WEST 112 STREET
1
1883 1151
516 WEST 112 STREET
1
1895
64
606 WEST 114 STREET
1
1883 1147
516 WEST 112 STREET
1
1883 1143
516 WEST 112 STREET
1
1883 1139
516 WEST 112 STREET
1
1883 1135
516 WEST 112 STREET
1
1883 1131
516 WEST 112 STREET
1
1883 1127
516 WEST 112 STREET
1
1883 1173
516 WEST 112 STREET
1
1883 1123
516 WEST 112 STREET
1
1883 1119
516 WEST 112 STREET
1
1883 1111
516 WEST 112 STREET
1
1883 1172
516 WEST 112 STREET
1
1883 1107
516 WEST 112 STREET
1
1883 1103
516 WEST 112 STREET
1
1883 1171
516 WEST 112 STREET
1
1895
164
608 WEST 114 STREET
1
1883 1168
516 WEST 112 STREET
Assessed
Value
603,000
161,226
706,500
855,000
459,000
936,000
82,826
82,826
72,601
71,542
78,750
70,484
69,426
68,368
75,600
67,307
66,248
65,191
64,130
63,306
62,861
62,651
62,226
61,590
59,684
59,473
59,261
58,839
55,238
56,945
46,346
110
Exempt
Status
Exemption Exempt
Code
Value
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
FULL
PARTIAL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
PARTIAL
FULL
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
146,471
145,103
129,352
128,582
118,929
115,239
82,826
73,611
72,601
71,542
78,750
70,484
69,426
68,368
75,600
67,307
66,248
65,191
64,130
63,306
62,861
62,651
62,226
61,590
59,684
59,473
59,261
58,839
55,238
48,403
46,346
Tax
Expenditure
18,243
18,073
16,111
16,015
14,813
14,353
10,316
9,168
9,042
8,911
8,827
8,779
8,647
8,515
8,474
8,383
8,251
8,120
7,987
7,885
7,829
7,803
7,750
7,671
7,434
7,407
7,381
7,328
6,880
6,029
5,772
FATAL SUBTRACTION
Appendix F, cont'd
Columbia University and Affiliates
COLUMBIA UNIVERSITY
No. of
Boro Block
Lot
Street Address
Properties
Faculty & Student Housing Properties, cont'd
1
1883 1164
516 WEST 112 STREET
1
1883 1160
516 WEST 112 STREET
1
1883 1169
516 WEST 112 STREET
1
1883 1156
516 WEST 112 STREET
1
1885
119
525 WEST 113 STREET
1
1883 1165
516 WEST 112 STREET
1
1883 1152
516 WEST 112 STREET
1
1883 1161
516 WEST 112 STREET
1
1883 1148
516 WEST 112 STREET
1
1883 1157
516 WEST 112 STREET
1
1883 1144
516 WEST 112 STREET
1
1883 1153
516 WEST 112 STREET
1
1883 1149
516 WEST 112 STREET
1
1883 1140
516 WEST 112 STREET
1
1883 1145
516 WEST 112 STREET
1
1883 1141
516 WEST 112 STREET
1
1883 1137
516 WEST 112 STREET
1
1883 1136
516 WEST 112 STREET
1
1883 1133
516 WEST 112 STREET
1
1883 1129
516 WEST 112 STREET
1
1883 1125
516 WEST 112 STREET
1
1883 1121
516 WEST 112 STREET
1
1883 1117
516 WEST 112 STREET
1
1883 1109
516 WEST 112 STREET
1
1883 1108
516 WEST 112 STREET
1
1883 1170
516 WEST 112 STREET
1
1883 1150
516 WEST 112 STREET
1
1883 1146
516 WEST 112 STREET
1
1883 1142
516 WEST 112 STREET
1
1883 1138
516 WEST 112 STREET
1
1883 1134
516 WEST 112 STREET
Assessed
Value
45,709
45,077
44,653
44,440
68,070
44,015
43,807
43,384
43,172
42,746
42,112
42,112
41,477
40,842
40,842
40,417
39,996
39,571
39,362
38,935
38,512
38,089
35,125
34,280
33,431
27,291
26,232
26,021
25,808
25,598
25,387
111
Exempt
Status
Exemption Exempt
Code
Value
FULL
FULL
FULL
FULL
PARTIAL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
45,709
45,077
44,653
44,440
44,246
44,015
43,807
43,384
43,172
42,746
42,112
42,112
41,477
40,842
40,842
40,417
39,996
39,571
39,362
38,935
38,512
38,089
35,125
34,280
33,431
27,291
26,232
26,021
25,808
25,598
25,387
Tax
Expenditure
5,693
5,614
5,562
5,535
5,511
5,482
5,456
5,403
5,377
5,324
5,245
5,245
5,166
5,087
5,087
5,034
4,982
4,929
4,903
4,849
4,797
4,744
4,375
4,270
4,164
3,399
3,267
3,241
3,214
3,188
3,162
FATAL SUBTRACTION
Appendix F, cont'd
Columbia University and Affiliates
COLUMBIA UNIVERSITY
No. of
Boro Block
Lot
Street Address
Assessed
Properties
Value
Faculty & Student Housing Properties, cont'd
1
1883 1130
516 WEST 112 STREET
25,174
1
1883 1126
516 WEST 112 STREET
24,962
1
1883 1122
516 WEST 112 STREET
24,748
1
1883 1118
516 WEST 112 STREET
24,326
1
1883 1114
516 WEST 112 STREET
24,114
1
1883 1106
516 WEST 112 STREET
23,693
1
1883 1154
516 WEST 112 STREET
26,444
1
1881 1064
502 CATHEDRAL PARKWAY
18,606
1
1881 1015
502 CATHEDRAL PARKWAY
12,770
1
1881 1004
502 CATHEDRAL PARKWAY
11,230
1
1881 1019
502 CATHEDRAL PARKWAY
19,007
1
1881 1024
502 CATHEDRAL PARKWAY
19,007
1
1881 1109
502 CATHEDRAL PARKWAY
19,007
1
1881 1044
502 CATHEDRAL PARKWAY
18,953
1
1881 1026
502 CATHEDRAL PARKWAY
18,535
1
1881 1082
502 CATHEDRAL PARKWAY
15,201
1
1881 1081
502 CATHEDRAL PARKWAY
13,635
1
1885
17
531 WEST 113 STREET
209,700
1
1885
20
523 WEST 113 STREET
203,400
1
1885
50
534 WEST 114 STREET
203,400
1
1885
51
536 WEST 114 STREET
203,400
1
1884
42
514 WEST 113 STREET
99,900
1
2139
250
100 HAVEN AVENUE
71,550,000
1
1963
16
100 MORNINGSIDE DRIVE
1,714,500
143
SUBTOTAL:
189,487,170
TOTAL COLUMBIA
623,558,768
BARNARD
College/University Properties
1
1989
1
1989
1 03009
50 00600
BROADWAY
WEST 120 STREET
Exempt
Status
Exemption Exempt
Code
Value
FULL
FULL
FULL
FULL
FULL
FULL
PARTIAL
FULL
FULL
FULL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1602
1602
1602
1602
1602
3500
3500
25,174
24,962
24,748
24,326
24,114
23,693
22,483
18,606
12,770
11,230
5,774
5,774
5,774
5,758
5,636
4,617
4,140
209,700
203,400
203,400
203,400
99,900
71,550,000
1,714,500
138,399,486
537,386,900
3,135
3,109
3,082
3,030
3,003
2,951
2,800
2,317
1,591
1,399
719
719
719
717
702
575
516
26,118
25,333
25,333
25,333
11,198
8,020,039
213,541
15,973,945
61,217,801
1601
1601
34,875,000
5,445,000
3,909,139
610,330
34,875,000 FULL
5,445,000 FULL
112
Tax
Expenditure
FATAL SUBTRACTION
Appendix F, cont'd
Columbia University and Affiliates
BARNARD, cont'd
No. of
Boro Block
Lot
Street Address
Properties
College/University Properties, cont'd
1
1896
83
620 WEST 116 STREET
1
1896
72
2949 BROADWAY
4
SUBTOTAL:
Student Dorm Properties
1
1990
1
35
TEACHERS COLLEGE
College/University Properties
1
1973
1
1975
1
1976
3
Student Dorm Properties
1
569
1
569
1
569
1
569
4
1
1
19
1259
1295
1273
1298
Exempt
Status
Exemption Exempt
Code
Value
2,223,000 PARTIAL 1601
3,375,000 PARTIAL 1601
45,918,000
Tax
Expenditure
278,048
63,403
40,661,451
34,631
7,897
4,561,997
1603
774,000
774,000
86,758
86,758
3,375,000 PARTIAL 1604
3,375,000
0
0
0
0
49 CLAREMONT AVENUE
SUBTOTAL:
Faculty & Student Housing Properties
1
1896
72
2949 BROADWAY
1
SUBTOTAL:
Dormitory Authority Properties
1
1896
80
1
TOTAL BARNARD
Assessed
Value
774,000 FULL
774,000
616 WEST 116 STREET
SUBTOTAL:
1,089,000 FULL
1,089,000
51,156,000
3500
1,089,000
1,089,000
42,524,451
122,066
122,066
4,770,820
530 WEST 120 STREET
3040 BROADWAY
517 WEST 121 STREET
SUBTOTAL:
88,650,000 FULL
19,440,000 FULL
227,700 FULL
108,317,700
1601
1601
1601
88,650,000
19,440,000
227,700
108,317,700
9,936,778
2,179,030
25,523
12,141,331
1603
1603
1603
1603
3,672,000
499,967
389,250
364,500
4,925,717
457,348
62,271
48,481
45,398
613,498
1604
2,281,500
115,524,917
284,161
13,038,990
1220
106
512
514
AMSTERDAM AVENUE
MORNINGSIDE DRIVE
WEST 122 STREET
WEST 122 STREET
SUBTOTAL:
Faculty & Student Housing Properties
1
1976
20
509 WEST 121 STREET
TOTAL TEACHERS COLLEGE
3,672,000
1,957,500
389,250
364,500
6,383,250
FULL
PARTIAL
FULL
FULL
2,281,500 FULL
116,982,450
113
FATAL SUBTRACTION
Appendix G
New York University
No. of
Boro
Block
Lot
Street Address
Assessed
Properties
Value
College/University Properties
1
538
40
566 LA GUARDIA PLACE
28,710,000
1
541
1001
245 SULLIVAN STREET
20,243,537
1
559
12
106 EAST 14 STREET
17,010,000
1
547
30
715 BROADWAY
11,475,000
1
541
1
40 WASHINGTON SQUARE S 9,900,000
1
930
20
335 EAST 24 STREET
8,865,000
1
535
36
17 WEST 3 STREET
7,650,000
1
547
1
32 WAVERLY PLACE
5,850,000
1
52
1
96 TRINITY PLACE
5,850,000
1
548
4
5 UNIVERSITY PLACE
5,535,000
1
546
21
8 WASHINGTON PLACE
4,500,000
1
930
34
421 1 AVENUE
3,181,500
1
546
1
77 WASHINGTON SQUARE E 2,844,000
1
546
26
21 WEST 4 STREET
3,141,000
1
546
11
35 WEST 4 STREET
3,087,000
1
548
9
13 UNIVERSITY PLACE
3,046,500
1
547
8
23 WASHINGTON PLACE
3,001,500
1
550
1
1 WASHINGTON SQUARE N 2,187,000
1
547
5
24 WAVERLY PLACE
2,034,000
1
546
10
18 WASHINGTON PLACE
1,984,500
1
546
31
4 WASHINGTON PLACE
1,881,000
1
1215
53
150 WEST 85 STREET
1,881,000
1
1392
163
14 EAST 78 STREET
1,476,000
1
931
31
433 1 AVENUE
1,373,085
1
541
8001
40 WASHINGTON SQUARE S 1,372,500
1
547
15
12 WAVERLY PLACE
1,300,500
1
546
5
82 WASHINGTON SQUARE E 1,066,500
1
931
26
429 1 AVENUE
1,017,000
1
575
40
24 WEST 12 STREET
1,017,000
1
547
4
28 WAVERLY PLACE
967,500
1
568
32
7 EAST 10 STREET
864,000
114
Exempt
Status
Exemption Exempt
Code
Value
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
1601
1601
1601
1601
1601
1601
1601
1601
1601
1601
1601
1601
1601
1601
1601
1601
1601
1601
1601
1601
1601
1601
1601
1601
1601
1601
1601
1601
1601
1601
1601
28,710,000
20,243,537
17,010,000
11,475,000
9,900,000
8,865,000
7,650,000
5,850,000
5,850,000
5,535,000
4,500,000
3,181,500
2,844,000
3,141,000
3,087,000
3,046,500
3,001,500
2,187,000
2,034,000
1,984,500
1,881,000
1,881,000
1,476,000
1,373,085
1,372,500
1,300,500
1,066,500
1,017,000
1,017,000
967,500
864,000
Tax
Expenditure
3,218,104
2,521,333
1,906,651
1,286,233
1,109,691
993,678
857,488
655,726
655,726
620,418
504,405
356,614
354,220
352,075
346,022
341,482
336,438
245,141
227,991
222,443
210,841
210,841
165,445
153,909
153,844
145,773
119,544
113,996
113,996
108,447
96,846
FATAL SUBTRACTION
Appendix G, cont'd
New York University
No. of
Boro
Block
Lot
Street Address
Assessed
Properties
Value
College/University Properties, cont'd
1
462
18
38 EAST 7 STREET
814,500
1
1393
1001
3 EAST 78 STREET
794,700
1
546
20
10 WASHINGTON PLACE
765,000
1
547
26
3 WASHINGTON PLACE
765,000
1
548
21
25 WAVERLY PLACE
765,000
1
465
37
28 STUYVESANT STREET
688,500
1
541
33
249 SULLIVAN STREET
612,000
1
551
11
22 WASHINGTON SQUARE N
544,500
1
547
25
21 WASHINGTON PLACE
508,500
1
546
8
26 WASHINGTON PLACE
459,000
1
931
24
339 EAST 25 STREET
424,800
1
550
4
4 WASHINGTON SQUARE N
406,800
1
573
13
58 WEST 10 STREET
355,950
1
550
5
5 WASHINGTON SQUARE N
330,750
1
550
6
6 WASHINGTON SQUARE N
294,750
1
550
16
58 WASHINGTON MEWS
89,040
1
550
18
62 WASHINGTON MEWS
89,040
1
541
31
89 WEST 3 STREET
0
1
541
31
89 WEST 3 STREET
0
1
535
1
44 WEST 4 STREET
19,845,000
1
550
26
10 EAST 8 STREET
362,125
2
5752
121
2 RIVER AVENUE
105,500
2
5753
140
RIVER ROAD
13,635
1
533
1
1 WASHINGTON SQ VLLG
49,050,000
1
548
12
36 EAST 8 STREET
2,403,000
1
550
13
1 1/2 5 AVENUE
2,182,500
1
544
50
16 COOPER SQUARE
3,816,000
1
462
25
107 2 AVENUE
1,430,000
1
550
32
22 EAST 8 STREET
720,000
1
547
18
10 WAVERLY PLACE
675,000
1
550
30
18 EAST 8 STREET
504,000
1
533
10
543 LA GUARDIA PLACE
3,375,000
115
Exempt
Status
Exemption Exempt
Code
Value
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
1601
1601
1601
1601
1601
1601
1601
1601
1601
1601
1601
1601
1601
1601
1601
1601
1601
1505
1601
3500
1501
1505
1505
1601
1601
1601
1601
1601
1601
1601
1601
1601
814,500
794,700
765,000
765,000
765,000
688,500
612,000
544,500
508,500
459,000
424,800
406,800
355,950
330,750
294,750
89,040
89,040
0
0
19,845,000
362,125
105,500
13,635
11,901,600
1,922,400
927,177
772,794
679,360
604,800
660,888
394,016
432,071
Tax
Expenditure
91,297
89,078
85,749
85,749
85,749
77,174
68,599
61,033
56,998
51,449
47,616
45,598
39,898
37,074
33,039
14,161
14,161
0
0
2,224,426
45,103
16,779
1,528
1,482,344
215,482
115,480
86,622
76,149
75,328
74,079
49,075
48,431
FATAL SUBTRACTION
Appendix G, cont'd
New York University
No. of
Boro
Block
Lot
Properties
College/University Properties, cont'd
1
550
1
546
1
550
1
550
Street Address
Assessed
Value
Exemption Exempt
Code
Value
Tax
Expenditure
408,150
882,000
486,000
389,250
259,666,612
PARTIAL
PARTIAL
PARTIAL
PARTIAL
1601
1601
1601
1601
371,418
241,920
193,971
173,219
212,621,346
46,260
27,117
24,159
21,574
24,319,718
24
30
27
29
6
31
12
16
53
55
55
39
28
37
56
47
30
31
1211
246
125
51
31
126
33
35
34
227
7
35
MERCER STREET
18,900,000
WEST 14 STREET
7,650,000
WASHINGTON SQUARE S 8,415,000
3 AVENUE
14,625,000
EAST 14 STREET
51,300,000
WASHINGTON SQUARE W 3,838,500
WASHINGTON SQUARE W 2,542,500
STUYVESANT STREET
406,800
EAST 9 STREET
406,800
WASHINGTON PLACE
383,850
5 AVENUE
3,816,000
SUBTOTAL:
112,284,450
FULL
FULL
FULL
PARTIAL
PARTIAL
FULL
FULL
FULL
FULL
FULL
FULL
1603
1603
1603
1603
1603
1603
1603
1603
1603
1603
3500
18,900,000
7,650,000
8,415,000
4,870,368
3,902,400
3,838,500
2,542,500
406,800
406,800
383,850
3,816,000
55,132,218
2,353,995
952,807
943,237
545,920
437,420
430,257
284,989
45,598
45,598
43,026
427,735
6,510,583
Faculty & Student Housing Properties
1
793
1249
1
642
1176
1
524
66
1
936
37
1
540
14
1
931
21
1
930
38
1
547
14
1
930
41
1
621
74
1
642
1177
151
99
100
545
130
334
334
18
330
77
99
WEST 17 STREET
JANE STREET
BLEECKER STREET
1 AVENUE
MAC DOUGAL STREET
EAST 26 STREET
EAST 25 STREET
WAVERLY PLACE
EAST 25 STREET
CHARLES STREET
JANE STREET
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
FULL
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
316,195
202,710
23,715,000
10,800,000
10,350,000
8,100,000
1,575,000
1,525,500
373,050
129,792
202,973
39,382
25,248
2,658,214
1,210,572
1,160,131
907,929
176,542
170,993
41,815
20,642
25,280
Student Dorm Properties
1
1
1
1
1
1
1
1
1
1
1
1976
1884
1976
1993
1895
1976
1896
1885
2149
4201
569
EAST 8 STREET
WEST 4 STREET
EAST 8 STREET
EAST 8 STREET
SUBTOTAL:
Exempt
Status
116
316,195
202,710
23,715,000
10,800,000
10,350,000
8,100,000
1,575,000
1,525,500
373,050
129,792
202,973
FATAL SUBTRACTION
Appendix G, cont'd
New York University
No. of
Boro
Block
Lot
Street Address
Assessed
Properties
Value
Faculty & Student Housing Properties, cont'd
1
620
1023
534 HUDSON STREET
249,905
1
621
67
63 CHARLES STREET
144,118
1
615
26
242 WEST 12 STREET
96,042
1
640
68
28 BETHUNE STREET
74,649
1
843
22
21 UNION SQUARE
21,555,000
1
467
1
67 3 AVENUE
16,920,000
1
546
15
12 WASHINGTON PLACE
2,902,500
1
552
26
37 WASHINGTON SQUARE W 2,578,500
1
552
60
29 WASHINGTON SQUARE W 2,956,500
1
547
20
9 WASHINGTON PLACE
1,935,000
1
551
10
21 WASHINGTON SQUARE N
363,916
1
540
24
230 SULLIVAN STREET
173,394
1
642
1169
99 JANE STREET
208,069
SUBTOTAL:
107,447,813
Dormitory Authority Properties
1
535
1
562
1
546
8
30
33
567 LA GUARDIA PLACE
787 BROADWAY
713 BROADWAY
SUBTOTAL:
TOTAL NYU
117
Exempt
Status
Exemption Exempt
Code
Value
FULL
FULL
FULL
FULL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
PARTIAL
FULL
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
1604
249,905
144,118
96,042
74,649
6,135,480
4,827,690
2,205,900
1,939,140
1,827,056
1,393,200
276,576
86,701
208,069
76,754,746
31,126
22,921
15,275
11,872
687,726
541,136
274,745
241,520
227,560
173,523
34,448
10,799
25,915
8,735,312
3500
3500
3500
16,020,000
3,987,000
2,898,000
22,905,000
367,413,310
1,795,682
446,903
324,837
2,567,421
42,133,036
16,020,000 FULL
3,987,000 FULL
2,898,000 FULL
22,905,000
502,303,875
Tax
Expenditure
FATAL SUBTRACTION
END NOTES
Sewell Chan, “In the City’s Taxes, Murky Equations,” New York Times, March 12, 2006.
See Chart 2 in City Project, “State of Distress,” for historical comparison of the amount
and percentage of property tax revenues relative to non-city funds.
3
IBO Exemption Analysis for City Project, August 5, 2005, p. 22.
4
Comptroller of the City of New York, Comprehensive Annual Financial Report for Fiscal
Year 2005, pp. 137-139, as analyzed by City Project.
5
Moreover, the validity of the tax expenditure figure also depends on the accuracy of data
in DOF’s records, a process we discovered is replete with flaws and errors. See p. 13 for
fuller explanation of data reporting and entry problems, and Appendix C. for explanation of
how City Project worked to correct for other errors and problems.
6
New York City Department of Finance, Annual Report on the New York City Property Tax
for Fiscal Year FY 2005 (ARPT), p.i.
7
City Project, “State of Distress”, p.6.
8
ARPT 2005, p.i and ARPT 2004, p.i.
9
Ibid.
10
ARPT 2005, p.i.
11
New York City Department of Finance, Annual Report on Tax Expenditures Fiscal Year
2005 (ARTE), p. 1, emphasis added.
12
New York State Joint Legislative Committee to Study and Investigate Real Property Tax
Exemptions (hereafter referred to as the Becker Committee), First Report, Legislative
Document No. 15, 1970, p.40.
13
Ibid., pp. 35-36.
14
Becker Committee, Final Report, Legislative Document No. 15, 1970, p. 53.
15
Governor’s Panel on Property Tax Exemptions (hereafter referred to as the Cuomo
Panel), Interim Report, December 1993, p 3.
16
ARPT 2005, see, e.g., pp. i, 13-14.
17
ARPT 2005, p.13
18
ARPT 2005, p. 13.
19
As City Project noted in “State of Distress,” the properties of various governmental
jurisdictions derive their tax exemptions by virtue of sovereign immunity, although such
immunity may be waived, and, in fact, has been waived in whole or part by New York
State and the federal government in many instances –albeit not in New York City. Tax
exemption of properties of independent public authorities, on the other hand, are based
not on sovereign immunity but on either statute or legal agreement, which at times (such
as the Battery Park City Authority) may require Payments in Lieu of Taxes (PILOTS) or
other tax arrangements with the jurisdictions in which they are located.
There continues to be dramatic growth among state and city public authorities in
the number and value of their properties and amount of lost tax revenues attributable to
them. As “State of Distress” documented, in FY 2004, the total of New York City’s lost tax
revenues from properties owned by just the State of New York and five state-controlled
public authorities amounted to over $1.5 billion. Although we have not recalculated these
figures for FY 2005, we can report that the number and exempt value of properties owned
by various city and state public authorities has increased slightly in the span of just one
year.
20
ARPT 2005, p.14.
21
Category 2 residential properties includes both for-profit and non-profit housing that
receives full and partial tax exemptions (and abatements) under different city and state
property tax exemption and abatement programs (including J-51 and 421-a., b., c. and
1
2
118
FATAL SUBTRACTION
some special programs overseen by the Department of Housing Preservation and
Development), but excludes all public housing owned by the New York City Housing
Authority, whose holdings are listed under public authorities. Exempt properties in this
category receive over 61,250 exemptions, or 9% of all exemptions. The value of their
exemptions is $7.7 billion, or 9.76% of the total exempt value.
Category 3 includes commercial and industrial properties that receive a number of
different property tax exemptions and abatements under different city and state programs.
Together, they receive almost 4,900 exemptions, which represent less than 1% of the
number of exemptions. Their exempt value is $3.39 billion, or 4.28% of the total exempt
value. This category includes the ongoing total property tax exemption enjoyed by
Madison Square Garden.
Category 4 encompasses a variety of programs that offer property tax exemptions
and other tax breaks to specific categories of individuals, including crime victims, disabled
and senior homeowners, veterans, and homeowners under the state’s School Tax Relief
(STAR) program. The number of exemptions in this category is enormous –over 579,300,
representing over 85% of all exemptions. But their combined exempt value is only $1.6
billion, representing just 2% of the total exempt value. Unlike the other categories, these
exemption programs confer very wide-ranging but shallow subsidies.
Figures for actual tax expenditures for a number of these categories are contained
in DOF’s Annual Tax Expenditure Report (ARTE), pp 12-13, but the underlying numbers
are either not consistent or not comparable with the above figures taken from the
Department’s ARPT.
22
ARPT 2005, p, 14.
23
NYS Constitution, Article XVI, Taxation, Section 1, emphasis added.
24
Written comment in 1915 by William D. Guthrie, “eminent constitutional authority,”
quoted in the Report of the Committee on Taxation, Document No. 2, accompanying Intro
No. 657, presented to the Constitutional Convention of 1938, p. 202.
25
Report of the Committee on Taxation, Document No. 2, accompanying Intro No. 657,
presented to the Constitutional Convention of 1938, p. 201, emphasis in original.
26
Report of the Committee on Taxation, Document No. 2, accompanying Intro No. 657,
presented to the Constitutional Convention of 1938, pp. 202-03.
27
ARPT 2005, p.14.
28
Robert Pear, “Nonprofit Hospitals Face Scrutiny Over Practices,” New York Times,
March 19, 2006.
29
The figures for FY 1992 were obtained by City Project from an unpublished, internal
Department of Finance report, written in either 1991 or 1992, that explored the idea of
seeking Payments in Lieu of Taxes (PILOTS) from property-owning New York City-based
private colleges and universities. Although DOF staff could not provide us with either the
title or exact date of the report, they did confirm its authenticity. These and other FY 1992
numbers taken from this paper would be independently verifiable from DOF property
assessment files for that year.
30
For purposes of full disclosure, Bonnie Brower, one of the authors of this report,
attended graduate school at Columbia University, and graduated from NYU Law School.
31
Information about Fordham University was obtained from its profile on the Website of
the Council of Independent Colleges and Universities (CICU), available at
www.nycolleges.wsg.net/profiles. Information about St John’s University is from that
website as well as its own public institutional materials.
32
DOF also enters information about higher educational properties under several other
classifications, including “religious school” (Exemption Code 1022) and “religious dorm”
119
FATAL SUBTRACTION
(Exemption Code 1023), although these overwhelmingly apply to properties that are used
for religious, not general, education, and for housing for students of such religious
institutions. City Project searched both these codes and did find a number of general
educational properties, mostly operated by religious denominations, contained in them.
After researching and confirming their actual ownership and usage, we included such
properties in our reconstructed educational data bases.
33
New York State Education Department, Office of Research and Information Systems,
“Bundy Aid to Selected Independent Colleges and Universities, 2004-05.”
34
New York State Comptroller’s Office, “The 1997-98 Budget: Fiscal Review and
Analysis,” September 1997.
35
National Center for Public Policy and Higher Education, “The Educational Pipeline: Big
Investment, Big Returns,” April, 2004.
36
Commission on National Investment in Higher Education, “Breaking the Social Contract:
The Fiscal Crisis in Higher Education,” 1997, p. 2, emphasis added.
37
See, e.g., Commission on National Investment in Higher Education, “Breaking the Social
Contract: The Fiscal Crisis in Higher Education;” National Center for Public Policy and
Higher Education, “Income of U.S. Workforce Projected to Decline If Education Doesn’t
Improve,” November, 2005.
38
National Center for Public Policy and Higher Education, “State Capacity for Higher
Education Policy,” July, 2005, p.2A.
39
Ibid., p. 3A, emphasis added.
40
National Center on Public Policy and Higher Education, “Measuring Up, 2004: The State
Report Card on Higher Education,” pp. 4, 8-9.
41
National Center on Public Policy and Higher Education, “Measuring Up, 2004: The State
Report Card on Higher Education,” p.7.
42
Frederick S. Lane, “The Money Crunch in Higher Education,” Gotham Gazette,
September 25, 2004.
43
Ibid.
44
John Sexton, “Fire and Ice” (public lecture given at Marble Collegiate Church),
November 23, 2004.
45
This sector, based on the North American Industry Classification System in use since
2003, includes teachers and instructors at public and private elementary and high schools,
colleges, universities, graduate and professional schools, and training centers, whether
non-profit or for-profit. Administrators at private institutions are included, but those in public
educational institutions are included in the system’s “public sector” category. This
information is from the New York State Department of Labor’s ES-202 data, as reported in
Fiscal Policy Institute, “The State of Working New York 2005: Treading Water in a
Tenuous Recovery,” p. 4-39.
46
Thomas Bender quoted in Gail Robinson, “New York as College Town,” Gotham
Gazette, September 9, 2004, pp. 2 and 6-7.
47
See, e.g., Richard Florida and Elizabeth Currid, “Bohemian Rhapsody” (op-ed), New
York Times, July 31, 2005.
48
Crain’s New York Business, 2005 Book of Lists. (Note: The Book of Lists does not
include employment data for the public sector.)
49
John Noble Wilford and Jonathan D. Glater, “N.Y.U. and Columbia to Receive $200
Million Gifts for Research,” New York Times, March 21, 2006.
50
Kathleen Lucadamo, “N.Y. Prexies at Head of Cash,” New York Daily News, November
15, 2005, reporting on survey in Chronicle of Higher Education. Curiously, the highest paid
college president in the country was the head of Lynn University in Boca Raton, who
120
FATAL SUBTRACTION
earned over $5 million, much of it in deferred compensation apparently reflecting current,
more general compensation practices of major American corporations in disparity to other
employees’ salaries and apparent disconnection from quality of product.
51
Burton A. Weisbrod, “The nonprofit mission and its financing: Growing links between
nonprofits and the rest of the economy,” To Profit or Not to Profit: The Commercial
Transformation of the Nonprofit Sector, edited by Burton A. Weisbrod (Cambridge
University Press, 2000), p. 6.
52
Burton A. Weisbrod, Id., pp. 5-6.
53
Id., p. 6.
54
Id.
55
Burton A. Weisbrod, “Conclusions and public-policy issues: Commercialism and the
road ahead,” To Profit or Not to Profit: The Commercial Transformation of the Nonprofit
Sector, edited by Burton A. Weisbrod, Cambridge University Press, 2000, pp. 304-305.
56
See Gail Robinson, “New York As College Town,” Gotham Gazette, September 27,
2004, pp 7-8.
57
CUNY Office of Institutional Research & Assessment, Table A01.01. Enrollment figures
for the CUNY Medical School/Sophie Davis School of Biomedical Education were not
available and are not included in these totals.
58
2000 U.S. Census.
59
NYSED Office of Research and Information Systems, “Student Origin 2004.”
60
CUNY, “Investing in New York’s Future: The CUNY Portfolio (A Report on the Economic
Impact of CUNY),” 1998, available at www.cuny.edu/abtcuny.
61
CUNY Chancellor Matthew Goldstein put this decline at 9% in his testimony before the
City Council Higher Education Committee on June 12, 2003, p. 1, written version.
62
Miriam Kramer, Liam Arbetman and Jose Vila, “Overburdened: Further Shifting the Cost
of Public Higher Education from State Government to New York Families,” NYPIRG report,
undated.
63
CUNY Chancellor Goldstein in op cit., at p.5.
64
NYPIRG, “Ten Years in the Making: The Pataki Administration Record on Higher
Education,” undated.
65
Ibid
66
. See Karen W. Arenson, “Regents Impose Limit on Colleges That Seek Profit,” New
York Times, January 21, 2006. .
67
NYPIRG, “The Facts on New York’s Opportunity Programs,” undated.
68
Study by the Foundation Center and the Boston Globe, reported in City Limits Extra,
January 16, 2004, available at www.citylimits.org.
69
Figures provided by Chancellor Matthew Goldstein in op cit, at p. 3.
70
Id.
71
Much of the material in this section is from Center for an Urban Future, “CUNY on the
Job: The City’s New Workforce Workhorse,” April, 2004.
72
Chancellor Goldstein quoted in Joseph Fried, “At CUNY, Giving Workers a Leg Up,”
New York Times, October 2, 2005.
73
Center for an Urban Future, “CUNY on the Job: The City’s New Workforce Workhorse,”
April, 2004.
74
Mike Wallace, history professor, director of CUNY’s Gotham Center, and a Pulitzerwinning author of Gotham, a multi-volume history of New York City, articulated the notion
of CUNY’s replacement role in a conversation with one of the authors of this report on
September 28, 2005.
121
FATAL SUBTRACTION
Barbara Bowen, President of the PSC, quoting CUNY’s founders in transcription of her
address to the September 29, 2005 Contract Rally, at p.7.
76
Karen Arenson, “Winning Back the Brightest,” New York Times, May 26, 2005.
77
Danny Hakim, “Income Gap in New York Is Called Nation’s Highest,” New York Times,
January 27, 2006, citing results of a report compiled from census data by the Economic
Policy Institute and the Center on Budget and Policy Priorities.
78
Julius Caesar Claude Edelstein, who helped develop and implemented open admissions
under Chancellor Albert Bowker, and formed the “Friends of CUNY” to fight for the
continuation of remedial education in the late 1990’s, quoted in his obituary by Karen
Arenson, New York Times, November 19, 2005.
79
Quoted in Karen Arenson, “City College Gets $26 Million From Former Intel Chairman,”
New York Times, October 27, 2005.
80
The source of much of the historical material on this issue is Werner Cohn, “Cooper
Union and the Chrysler Building,” 1996, available at www.wernercohn.com/Chrysler.html.
81
IBO Exemption Analysis, op cit.
82
Lincoln Anderson, “How Cooper Union Uses Property to Raise Revenue,” The Villager,
January 15, 2003.
83
www.columbia.edu
84
www.columbia.edu./about_columbia/mission.html.
85
www.columbia.edu/cu/opir/facts.html?budget.
86
Ibid. Unfortunately, the expense-side accounting on Columbia’s Website is less
informative, because it groups together instruction, research and educational
administration in one large category, which accounts for 60% of its total annual
expenditures and lists other expenses, such as “institutional support” and “auxiliary
enterprises,” which it fails to define.
87
Columbia section on website of Council of Independent Colleges and Universities,
www.nycolleges.org/profiles.
88
Charles V. Bagli, “Columbia Buys Sites and Assures Neighbors,” New York Times, April
4, 2004.
89
http://neighbors.columbia.edu/
90
Joshua Brustein, “Columbia Expansion and Eminent Domain,” Gotham Gazette,
December 9, 2005.
91
Id.
92
Quoted in E.R. Shipp, “Stop Ivy’s Stranglehold on Harlem,” New York Daily News, May
7, 2005.
93
Charles V. Bagli, New York Times, op cit.
94
Jimmy Vielkind and Erin Durkin, “Letter to State Requests Dialogue About Possible
Condemnation, CU Provides $300, 000,” The Spectator, April 15, 2005.
95
See examples cited in John M. Broder, “States Curbing Right to Seize Private Homes,”
New York Times, February 21, 2006.
96
Joshua Brustein, op cit, at p. 4.
97
Tom DeMott, “Up Against the Stonewall,” First of the Month, summer edition, 2005.
DeMott is one of the founders and leaders of the Committee to Protect the Community
(CPC), a group of Harlem residents and activists opposing Columbia’s planned
Manhattanville expansion.
98
Lynne Brown, NYU senior vice president, quoted in Lincoln Anderson, “Can a 26-story
Dormitory Fit in a ‘Fragile Ecosystem’?” The Villager, November 30 – December 6, 2005.
99
www.nyu.edu
100
Mary Vobori, “For NYU, the Sky is no Limit,” New York Newsday, July 17, 2005.
75
122
FATAL SUBTRACTION
101
Id.
Id.
103
Council of Independent Colleges and Universities website, nycolleges>wsg.net/profiles/
104
For purposes of full disclosure, one of the authors of this report, Bonnie Brower,
attended graduate school at Columbia University, and graduated from NYU Law School.
105
Mary Vobori, New York Newsday, op cit.
106
Quoted in Lincoln Anderson, “Can a 26-story Dormitory Fit in a ‘Fragile Ecosystem’?”
The Villager, November 30 – December 6, 2005.
107
Restated in letter, dated November 14, 2005, to John Sexton from Andrew Berman,
Executive Director of Greenwich Village Society for Historic Preservation (GVSHP) raising
concerns about the planned East 12th Street dormitory.
108
Lincoln Anderson, “Can a 26-story Dormitory Fit in a ‘Fragile Ecosystem’?” The
Villager, November 30 – December 6, 2005.
109
Mary Vobori, New York Newsday, op cit.
110
Greenwich Village Society for Historic Preservation Preservation Alert, March 21, 2006.
111
Richard Perez-Pena, “N.Y.U. Plans Health Center for Children,” New York Times,
February 9, 2006.
112
National Center for Education Statistics, Education Statistics Quarterly, Volume 6,
Issue 4.
113
Ibid.
114
New York State Education Department, “Chapter 655 Report to the Governor and
Legislature,” July 2005.
115
New York City Office of Management and Budget, Expense Revenue Contract report,
Adopted Budget for FY06, July 12, 2005 (contains figures for FY05 modified budget).
116
Ibid.
117
Ibid.
118
Educational Priorities Panel, “EPP Analysis: Where Does the Money Go? The 2000-01
NYC Board of Education Pie Chart,” available at
www.edpriorities.org/Info/BudgetInfo/WhereGo/BudInf_EPPAna00.html
119
Educational Priorities Panel, “Alternate Version: Where Does the Money Go? The
2000-01 NYC Board of Education Pie Chart,” available at
www.edpriorities.org/Info/BudgetInfo/WhereGo/BudInf_AlternateBOE00.html,
120
Educational Priorities Panel, “Adding up the Numbers: The Education Budget under
Mayoral Control,” Bulletin #2, January 20, 2006.
121
Campaign for Fiscal Equity, “‘The State of Learning’ In New York: An Annual Snapshot
with Comparisons of Select Counties Around the State,” undated, summarizing key
findings of the New York State Education Department’s State of Learning 2003 report.
122
Campaign for Fiscal Equity, Id.
123
Campaign for Fiscal Equity, “In Evidence: Policy Reports from the CFE Trial. Special
Report: The Trial Court’s Decision,” Volume 3, January 2001.
124
Jennifer Medina, “School Aid: Meet the New Math, Same as the Old,” New York Times,
March 31, 2006.
125
New York City Independent Budget Office, “Lawsuit Remains Unsettled, But School
Spending Continues to Rise,” July 19, 2005.
126
Ibid.
127
Educational Priorities Panel, “Adding Up the Numbers,” op cit.
128
Campaign for Fiscal Equity, “CFE’s Analysis of Governor Pataki’s 2006-2007 Executive
Education Budget: Governor’s Continuing Contempt of Court Trumps Needs of State,”
undated.
102
123
FATAL SUBTRACTION
129
Campaign for Fiscal Equity, id.
James Horney, Arloc Sherman and Sharon Parrott, “Program Cuts in the President’s
Budget: Cuts Grow Deeper Over Time and Will Hit States Hard,” Center on Budget and
Policy Priorities, February 23, 2006.
131
The survey is voluntary and information is self-reported. We identified at least three
well-known private schools that were not listed in NCE’s database (Trinity School, SAR
Academy, and the UN International School), so figures have a margin of error. The
commercial website www.privateschoolreview.com lists a total of 1,037 private schools in
the five boroughs of New York City.
132
Private figures from NCES Private School Survey, 2003-2004. Public figures from New
York City Independent Budget Office, “Lawsuit Remains Unsettled,” July 19, 2005.
NYSED’s State of Learning 2005 (which uses 2003-04 figures) puts NYC non-public
school enrollment at 267,755.
133
Calculated from NCES Private School Survey, 2003-2004.
134
NCES Private School Survey, Id. Non-Catholic religious schools include Jewish,
Muslim, and Christian schools.
135
NCES Private School Survey, Id.
136
NCES Private School Survey, Id.
137
New York State Education Department, “Chapter 655 Report to the Governor and
Legislature,” July 2005.
138
See Edward Robb Ellis, The Epic of New York City: A Narrative History (New York: Old
Town Books, 1966) pp. 251-254.
139
Ibid, p. 458.
140
Bloomberg News, “$30,000 a Year: New York City Schools Charge Ivy League Tuition,”
February 16, 2006; Claire Wilson, “A Taste of Tranquility on the Upper East Side,” New
York times, February 12, 2006.
141
New York State Education Law, Section 3635 (1a).
142
New York City Independent Budget Office, “Budget Options for New York City,”
February 2006, p.4. The DOE also transports some 60,000 special education students in
accordance with different regulations governing their education.
143
IBO Budget Options, Id., p.5.
144
Danny Hakim, “Oil Habit is Hard to Break Under New York Tax Code,” New York
Times, February 3, 2006.
145
Thomas Hehir et al., Comprehensive Management Review and Evaluation for Special
Education, Septmeber 20, 2005, pp. 8-10.
146
Michael A. Rebell and Joseph J. Wardenski, “Of Course Money Matters: Why the
Arguments to the Contrary Never Added Up,” Campaign for Fiscal Equity, January 2004.
147
Ibid. Article contains a thorough review of recent academic studies that show the
effectiveness of these and other strategies in increasing student achievement.
148
Cuomo Panel, Cover Letter from Chair, February 17, 1994, p. 1.
149
Cuomo Panel, Interim Report, December 1993, pp 2-3.
150
Report of the Temporary State Commission on State and Local Finances, Vol. 2, The
Real Property Tax (The Becker Commission), 1975, p. 126, quoted in Cuomo Panel,
Interim Report, December 1993, p. 29.
151
A detailed description of S-3384 and A-3266 can be found in the Cuomo Panel Interim
Report, op cit, at pp.30-31.
152
Senate Bill 1127-A, “An Act to amend the real property law, in relation to the exemption
from taxation for non-profit organizations…” 2003-2004 Regular Sessions, January 28,
2003.
130
124
FATAL SUBTRACTION
Quoted in Woods Bowman, “Impact Fees: An Alternative to PILOTS,” in Property-Tax
Exemption for Charities, edited by Evelyn Brody (Washington D.C.: Urban Institute Press,
2002), p. 301.
154
Peter Baynes, “The Eroding Tax Base: New York’s Property Tax at a Crossroads,” New
York State Conference of Mayors and Municipal Officials, 1996, quoted in Woods
Bowman, “Impact Fees: An Alternative to PILOTS,” in Property-Tax Exemption for
Charities, Id., p. 312.
155
Senate Bill 1127-A, op cit. A different proposed Senate bill, 1415, also introduced in the
2003-04 regular session, would have provided far higher and unlimited reimbursement for
localities that lost revenues from “privately owned forest lands.”
156
This estimate comes from Center for Government Research, “Balance of Revenues &
Expenditures Among NYS Regions, Fiscal Years April 1, 1997 – March 31, 1998 through
April 1, 2000 – March 31, 2001,” May 2004, which used 2001 data. See City Project,
“State of Distress,” pp. 11-12, for fuller description of these findings.
157
State-owned properties cost the city over $212 million in 2004, compared to $266.8
million from higher educational institutions in 2005. See City Project, “State of Distress” for
fuller analysis of state-owned and state-controlled tax exempt properties.
158
Cuomo Panel, Interim Report, op cit., p.27
159
See e.g. Richard D. Pomp, “The Collision between Nonprofits and Cities over the
Property Tax: Possible Solutions,” in Property-Tax Exemption for Charities, op cit., edited
at p. 389.
160
Pamela Leland, “PILOTS: The Large-City Experience,” in Property-Tax Exemption for
Charities, Id., p. 203, and pp. 205-06.
161
Cuomo Panel, Interim Report, op cit., at pp. 27-28.
162
Cuomo Panel), Id., p. 28.
163
Becker Committee, Conclusions and Recommendations, Legislative Document No.15,
1970, p.42 (emphasis added). The Becker Committee actually proposed legislation to
spread the costs of providing “safety” services to all properties that benefited from them,
although it would have continued to exempt the categories of religious, charitable,
educational, cemetery and hospital corporations, notwithstanding the contradictory nature
of the exemption.
164
See e.g. Richard D. Pomp, “The Collision between Nonprofits and Cities over the
Property Tax: Possible Solutions,” in Property-Tax Exemption for Charities, op. cit., p. 389.
165
Richard D. Pomp, Id., pp. 387-88.
166
IBO “Budget Options for New York City,” op cit.
167
Louisiana Bureau of Government Research, quoted in Janne Gallagher, “The Legal
Structure of Property-Tax Exemption,” in Property-Tax Exemption for Charities, op cit.,
p. 16.
168
Ibid., pp. 388-91, and Women’s City Club of New York, Inc., “How Shall We Raise the
Money? Proposals for Financing City Government,” April 1966, p. 10.
169
The Becker Committee strongly recommended “an absolute moratorium on the
enactment of new exemptions,” with exceptions allowed, only after the “fiscal impact of
older, outmoded exemptions has been nullified” by reform and only if any exceptions to the
moratorium maintained the newly stabilized municipal tax bases.
153
125