By Bob Hildreth
Our forebears tossed tea in the harbor and fought in Shea’s Rebellion to protest taxes. Today we must find their spirit to protest the taxes the GOP wants to levy on our colleges and students.
The Republican tax bill includes six taxes on higher Ed, with levies on endowments, student debt interest, tuition waivers, company reimbursements for tuition, and the construction bonds colleges’ issue. The feds hope to haul in $65 billion. That might be small beer in the world of corporate tax reductions, but it is sizable for higher education.
Massachusetts has the most to lose of any state. Our 150 colleges educate a half a million students and employ 150,000 workers. They also have attracted almost $70 billion in endowment funds, much of it from outside the state.
If these taxes pass, it will open the door to other taxes. Mayors with colleges in their cities and towns have been itching to tax them. Passage of the GOP bill will give them precedent to do so.
Colleges are already struggling financially making this the wrong time to raise their taxes. They are suffering from the double whammy of suffocating tuition levels and declining applications. The glue that is supposed to keep all this together – the student loan program– is reaching a crisis.
Outstanding loans amount to close to $1.5 trillion. The amount keeps going up in part because only one third of debtors are able to reduce what they owe. The rest are barely treading water or falling behind. The burden also falls on parents who take out government loans that more than a quarter cannot keep current.
All of the proposed taxes ultimately fall directly on students and their families. Smaller after-tax returns on endowments will mean less money for scholarships. What was saved through deductibility of student loan interest will no longer go to paying down debt. Graduate students who now scrape by on small tuition waivers and stipends will have to scrape some more if the waiver shrinks due to taxation. Companies will find their ability to reward employees with tuition reimbursements diminished by taxes. And bonds that fund the construction of dorms and academic buildings that in our state employ many hundreds of construction workers year after year will become less attractive with investors through taxed returns.
Bay Staters are contrary folk with a history of meeting taxes with muskets. It is fitting now that we tell the feds: Don’t mess with Mass.