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Yale University Defends School's Tax-Exempt Status

Lori Mack
Yale President Peter Salovey

A controversial bill that would have taxed Yale’s $25 billion endowment failed earlier this year. Now, Yale officials are speaking out against a proposed bill that could potentially increase taxes the university pays on some of its properties. 

The bill would clarify an 1834 Connecticut statute, which basically says certain colleges and universities -- including Yale -- should be taxed on real estate yielding an annual income of more than $6,000. It would clarify the difference between taxable and tax-exempt property owned by Yale University.

Yale president Peter Salovey spoke to reporters at a press conference Wednesday and acknowledged the fiscal challenges faced by the city of New Haven and the state, but said taxing the university’s academic property would not only be bad policy, but would discourage future donors and have an overall negative impact on the state.

Salovey said one way Yale can help the state’s economy is by continuing to provide jobs.

"Whether we’re creating jobs here at the university, or whether university research is spun out of the university -- located in commercial spaces that pay taxes, and run by employees whose income is taxed at the state level and who then buy homes in New Haven and pay property taxes on them," Salovey said. "So, I think the more of this we can do, the more we can contribute to an improvement of the tax bases in the city and the state."

Salovey said that efforts to tax university property is unconstitutional. But earlier this week a group of law professors, including some from Yale, sent a letter to state lawmakers concluding that it may not be unconstitutional.

The senate bill passed the legislature’s Finance Committee. It now heads to the State Senate.

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