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A taxing question
Hamden challenges university's tax-exempt status
Quinnipiac University does not pay property taxes, but the town of Hamden wishes it did, according to Hamden Legislative Council President James Pascarella.
Pascarella wrote a letter to Connecticut Speaker of the House Brendan Sharkey asking Hartford to help make this happen.
“[Quinnipiac is] essentially one of the very few entities, certainly the largest entity in town by far, that gets police, fire, public works services for absolutely nothing,” Pascarella said. “The bottom line is Quinnipiac has more than doubled or tripled their enrollment in the last 20 years and they are the only university of this size that does not provide their host community with any financial support to speak of.”
Under the federal law Internal Revenue Code Section 501 (c)(3), “charitable organizations” do not pay taxes. Quinnipiac, and other educational institutions, is considered one of these “charitable organizations.”
“We’re asking [Sharkey] to change the laws in Connecticut that he can change that will enable us to access taxes and if necessary to challenge the tax exempt status of the university as a whole,” Pascarella said.
Since it is a federal law, Connecticut State cannot change the law, according to Vice President for Development and Alumni Affairs Donald Weinbach.
“It would have to be changed by the United States Congress,” Weinbach said. “That would mean that Yale would pay taxes, Fairfield would pay taxes, Duke University would pay taxes, Baylor University in Texas would pay taxes, Stanford would pay taxes in California. Every nonprofit, every hospital in this country would pay taxes.”
Princeton, N.J. took Princeton University to court to challenge the university’s tax-exempt status. The case is currently pending in New Jersey tax court, according to Bloomberg.com.
“If a suit does need to be brought against the university challenging their tax-exempt status, the state of Connecticut would actually take that on, not the town of Hamden,” Pascarella said.
Hamden questions the not-for-profit status of the Polling Institute and the TD Bank Sports Center.
“We absolutely believe that the residents that are housing students is no different than a landlord-tenant relationship, which is no different than any other private enterprise,” Pascarella said.
Connecticut has the PILOT program, or payment in lieu of taxes, where the state pays towns a percentage of the taxes they would get from tax-exempt properties.
Hamden receives about $2 million per year from the state to compensate for Quinnipiac’s tax exemption, according to Pascarella.
If Quinnipiac were to pay taxes, the university would pay about $8 million a year, according to Pascarella. Hamden wants the other $6 million from Quinnipiac, either through taxes or a stipend, he said.
Weinbach would not comment on if the university would consider giving more money to the town.
For at least three years, Quinnipiac has paid Hamden a $100,000 stipend, according to Weinbach. Hamden used to send property tax bills to out-of-state students who brought their cars to campus. To prevent Hamden from taxing students, the university now pays the town $100,000 a year to make up for the revenue they earned from students’ cars’ property tax.
“We were getting hundreds of complaints from parents because they were getting these tax bills,” Weinbach said. “Legally [Hamden] can do that, but no other municipality with a college or university in their town was doing it. That’s why we really asked them not do that anymore. It just didn’t make a lot of sense.”
Pascarella’s decision to send a letter to Sharkey was based off his reaction to the interviews The Chronicle and Q30 had with President John Lahey in November where Lahey said he wanted to buy more property for the university.
Pascarella said the university purchasing private residences is “absolutely against what the town is looking for.” This would take more properties off the tax rolls and put more students in residential neighborhoods, he said.
“[Lahey’s interview] wasn’t just my catalyst, it pretty much was a catalyst for just about anybody in elected office in town that just reached the conclusion that this has gone on long enough,” Pascarella said. “I think the president’s interview this past late fall was ill-timed, ill-conceived and it has caused a great deal of stress in the relationship [between the town and the university].”
Weinbach said Pascarella’s description of Hamden and the university’s relationship is inaccurate.
“We have ongoing meetings with the mayor and his staff on a wide range of issues and our relationship with the town of Hamden is excellent,” he said. “We have an outstanding relationship with Mayor Jackson and his administration.”
Pascarella wants the university and the town to have more discussions.
“At this stage of the game what we would like [the university] to do is to be moral and ethical and sit down and have a realistic negotiation which isn’t all about what the town can do for Quinnipiac but rather what Quinnipiac is going to do for the town,” Pascarella said.