The Washington Post Editorial Board published “Universities shouldn’t be exempt from D.C. property taxes” last week, questioning the long-standing given that institutions of higher education enjoy exemption from (most) state, local and federal taxes. Opines The Post:
The rationale for this long-standing policy is a wise one: namely, that these institutions seek to serve broad public needs, not provide a return on shareholder investment.
Yet, in modern times, that argument runs into the blunt fact that some institutions of higher education have morphed into economically impactful entities employing thousands of people, occupying hundreds of acres and investing endowments that sometimes surpass $1 billion[.]
Naturally, higher education institutions in the D.C. area have long fought (successfully) against proposals to assess them a local property tax. They argue that the schools provide substantial public services, such as generating economic activity, providing security, and running shuttle buses for students. The Post responds:
As for the stimulus universities provide for the local economy, and the services they provide students, both are fair points — but it’s equally true that the universities’ ability to attract students in the first place depends in some measure on the city’s infrastructure and amenities, paid for by local households and businesses.
Tax-exempt properties accounted for 11% of the total assessable property tax base in Maryland as of January 2014 – and as much as 31.6% in Baltimore City. For more information about property tax exemptions in Maryland, see the Department of Legislative Services’ presentation, Property Tax Exemptions and Payments in Lieu of Taxes in Maryland.