Connecticut Governor Dan Malloy struck down the idea that the state would tax income from Yale’s $25.6 billion endowment, The Connecticut Mirror reported.
The bill introduced in the state legislature in March proposed taxing schools in Connecticut with endowments of $10 billion or more. Yale is the only such school in the state with an endowment of more than $10 billion.
“As the governor has made clear, we don’t believe that new taxes should be part of our solution as Connecticut adjusts to a new economic reality,” Devon Puglia, the governor’s spokesman, told the Mirror. “Instead, we should make the spending reductions necessary for living within our means.”
The proposed bill gained widespread attention, leading Florida Governor Rick Scott to release a statement urging Yale move south to avoid taxes.
“With news that the Connecticut Legislature wants to unfairly tax one of the nation’s most renowned universities to deal with the state’s budget shortfall, it is clear that all businesses in Connecticut, including Yale, should look to move to Florida,” Scott said, according to the Connecticut Post.
Still, it’s not the only bill proposed that would increase taxes on Yale. The mayor of New Haven, Connecticut is backing a bill a bill that attempts to distinguish between real estate that Yale holds for educational purposes, and is therefore tax exempt, and its commercial real estate property.
In her testimony supporting the proposal, New Haven Mayor Toni Harp used an example of a building that Yale recently purchased. Previously, the city received $275,000 annually in taxes for the property.
The city risks losing that taxable income since Yale, as an educational institution, owns the property — even though Yale stands to make money from the building for products and services it may sell, according to Harp.
Richard Jacob, a Yale associate vice president for federal and state relations, presented written testimony opposing the proposal backed by the mayor.
“Given Yale’s unparalleled commitment to New Haven, and the gains made by the City of New Haven and Yale in building employment, expanding the tax base, and strengthening neighbourhoods and schools, the proposal to single out Yale by imposing unprecedented, ambiguous, and sweeping new taxes on the University is troubling,” Jacob said.
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