Democratic candidate for governor Jay Gonzalez’s campaign promise to levy a 1.6% tax on the endowments of nine large Massachusetts universities is an innovative way to increase funding for state education and transportation. The tax would only apply to institutions with endowments of over a billion dollars based on the average of last 5 years. It raises a billion dollars in badly needed revenue that will benefit all taxpayers without raising individual taxes.
Critics argue that 1.6% tax on endowments over a billion dollars would hurt the schools – Harvard University, MIT, Boston College, Boston University, Williams College, Amherst College, Tufts University, Smith College, and Wellesley College, in their ability to provide scholarships to deserving students. However, the larger issue is the goal of providing high quality public education to the millions of Massachusetts public school students who will never qualify to attend these elite universities, yet whose public school education is critical to their ability to fulfill their potential in their fields of choice.
The other benefit of the tax would be to increase spending on, and therefore the quality of, public transportation. Again, rather than hurting these universities, it would help the thousands of students, faculty members, and employees of those institutions who rely on public transportation to travel to school, work, and home again.
Harvard and MIT both fall on the Red Line. BU and BC are on the Green Line and Wellesley is on the commuter rail. Ask the students, professors, and employees which would be more valuable to them – a more affordable and dependable commute to school or work, or a larger endowment?
Western Massachusetts is in dire need of more efficient and extensive public transportation which would benefit Amherst College, Williams and Smith as well as the surrounding communities. More dependable public transportation would be an asset to all Massachusetts residents by reducing drive time, parking fees, and potential tickets. It would also serve as an economic engine to cities and towns, their businesses, employees and customers. Our environment would benefit with fewer cars on the road burning less fossil fuel.
I wholeheartedly acknowledge the great public benefit our universities provide the state, the country, and the world. However, the 1.6% tax will not significantly diminish the global impact of these institutions, and it is instead a practical way for Harvard, MIT, BU, BC, Wellesley, Amherst, Williams and Smith to put the larger goal of the “public good” ahead of the bottom line of their respective endowments.