Is this why private universities look more appealing than public universities?

[notrichenough]

Don’t BU, Harvard et al create a ton of well paying jobs and those people pay income tax, property tax on their homes, and in turn create lots of jobs supporting the universities?

Sure. But so do Google, Amazon, Genzyme, and tons of other companies that have their offices in Boston and Cambridge. Yet they somehow manage to pay property taxes (and income taxes!) and still thrive.

I’d think Boston would prefer to keep the universities, on balance, than have them locate elsewhere, property tax or not.

Boston started a program where they try to get non-profits to voluntarily pay something to the city in lieu of taxes. Some pay a tiny amount, most pay less than what the city requests, some pay nothing. Clearly Boston feels like they would be better off if they could tax these institutions.

Just because you have been designated as a “non-profit” doesn’t mean you don’t run the place to make a profit.

Examples:

1. For a fraction of 1% of their endowment every year, Harvard could provide free tuition to all undergraduates. Would this not be the highest, best use of their money? Yet they don’t because they don’t have to, people are begging to throw their money at Harvard. Why give up easy revenue?

2. A few years ago, during the last recession Harvard was feeling the pinch, along with everyone else. Rather than dip into the endowment to tide them over until the economy turned around, they did what any major, for-profit business does when revenue falls a little short - they had a big layoff. Preserving their margins was more important than preserving peoples’ jobs.