Windfall from NL colleges unlikely
While it certainly makes sense for New London's mayor to explore whether some of the city's largest non-profit, and so non-taxed, institutions could voluntarily contribute more to the city to help pay its bills, no one should be under the illusion that any such largesse will play a big factor in balancing the city's $81 million budget.
One of the challenges New London faces is that it is home to several large institutions on which it cannot assess a property tax: Connecticut College, the U.S. Coast Guard Academy, Mitchell College and Lawrence & Memorial Hospital. Pointing to models in other communities in which such institutions voluntarily contribute to their host cities, Mayor Daryl Justin Finizio said he plans to explore what New London's large non-profits might be willing to do.
First off, when it comes to the U.S. Coast Guard Academy, New London is doing very well. Under state law New London annually gets $1 million in state PILOT (Payments in Lieu of Taxes) because it is home to the academy. If the academy were a traditional college it would be a small one, with just under 1,000 cadets, and getting $1 million in revenue for hosting a school that size is a huge amount in relative terms. Yale University, with its oft cited contribution to host city New Haven of $8 million, has 11,600 students. Of course the state contribution for the academy could change and local lawmakers must remain vigilant to maintain that revenue help for New London.
Mitchell College only recently renegotiated its contribution to the city, which stems in part from a prior disagreement over whether some college property should be taxable. It gives New London $28,750 annually. Given that institution's own financial challenges, it is hard to imagine that number increasing.
L&M Hospital, we contend, is already contributing much to the community (though not as a cash gift) through the many free health programs and services it provides, its support for dealing with homelessness and its outreach to youth groups.
That leaves Connecticut College, which has an agreement to send $12,500 annually to the city. It is reasonable to seek an increase in that contribution. A good comparison would be Wesleyan University, another small but prestigious liberal arts college in a small Connecticut city (Middletown), with 2,870 undergraduates (compared to 1,840 at Conn College).
Wesleyan has an endowment of about $600 million, roughly three times as great as Connecticut's endowment, but its $250,000 contribution to Middletown is 20 times larger than that which Conn College pays to New London. To provide a commensurate payment to New London, Conn would have to increase its contribution to about $87,500, hardly a windfall.
And before anyone points to the $8 million that Yale sends to New Haven as being far more charitable, please keep things in perspective. Factor in Yale's $19.4 billion endowment and you realize the contribution it makes to New Haven is relatively the same as the contribution Wesleyan gives its host community, as measured against the endowments.
Also what should not be lost in these discussions is what these educational institutions mean to a community, in terms of providing an economic boost, allowing access to buildings and programs that enhance local life, and providing students whose community service work help public school students and meet other needs.
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