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Rhode Island politicians continue to prioritize individual prosperity over community improvement
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Rhode Island politicians continue to prioritize individual prosperity over community improvement

Scott M. Dowling of Providence works in nonprofit management and human resources.

Brown University recently announced a plan to invest $150 million in Lifespan over the next few years. Last year, the Providence City Council approved payment-for-service agreements (PILOTs) with four private higher education institutions: Brown University, Johnson & Wales University, Providence College and the Rhode Island School of Design. These agreements could bring the city $223 million over the next two decades, but they also include credits that allow universities to reduce their financial contributions through development projects.

The combined endowments of these schools currently amount to approximately $7.6 billion. This stands in stark contrast to the total value of contributions to the PILOT program, which is less than 3% of the total value of their combined endowments.

In addition to the substantial funds they have at their disposal through their invested endowments, these universities are also major property owners in Providence, with combined real estate holdings estimated to be worth more than $2 billion. If these properties and endowments were taxed at Providence’s commercial tax rate of approximately 3.85%, annual property taxes alone would be approximately $77 million annually, and $1.54 billion over the life of the PILOT agreement.

However, these institutions make a much smaller contribution: they save tens of millions of dollars in taxes each year, while investing twice as much in other companies as they do in the local community. This underscores the financial benefits that these universities and their partners enjoy at the expense of the needs of the local community.

More: Providence Approves $600M Budget. Here’s What’s New and What’s Changing.

The potential revenue from fully taxing the endowments and properties of these institutions would be substantial. Annually, the city and state could collect approximately $77 million in property taxes alone. Combined with the additional $15.6 million lost annually from the recent Citizens Bank tax cut, this would equate to nearly $93 million in potential revenue per year. This additional revenue could significantly improve public services in Rhode Island.

We spend about $17,000 per student per year; the additional revenue could support the education of about 5,470 students or add $3,800 per student to the Providence Public School District. This could improve the quality of education, reduce classroom size, and provide better resources and facilities for students and teachers.

More: Tax Refunds for Landlords to Keep Rent Affordable? A Proposal to End the Housing Crisis

Expanding health care services and coverage could also be accomplished with these revenues. Recent updates to the state budget include significant increases in Medicaid funding. The fiscal year 2023 budget includes $32.7 million for Medicaid reimbursement rate increases, bringing total Medicaid spending to $3.95 billion. An additional $93 million per year could dramatically expand the state’s commitment to improving public health services, addressing critical needs in the health care system, and expanding access to essential health services for underserved communities.

In addition to education and health care, we are all acutely aware of Rhode Island’s housing and infrastructure crises, both of which can be addressed by redirecting funds to support affordable housing projects and improving infrastructure. This would help alleviate homelessness; provide safe and affordable housing for low-income families; improve overall living conditions; increase public safety, reduce traffic congestion and carbon emissions; and support economic growth in the hardest-hit communities, such as East Providence.

Rhode Island politicians who are eager to get tax breaks for corporations or who fail to take initiative to pass legislation to get more funding for their local communities are showing who their real voters are.

The focus of our elected representatives on increasing the power and influence of wealthy entities undermines the ability of the state to address important issues such as education, health care, infrastructure and affordable housing.

Moreover, these decisions reflect a broader trend in Rhode Island government toward policies shaped by the interests of a select few rather than the broader community. The emphasis on corporate welfare over public welfare raises significant concerns about the effectiveness, reliability, and corruption of our politicians.

Only by prioritizing the well-being of the community over the well-being of corporations can the state guarantee a prosperous and fair future for all its citizens.

This article originally appeared in The Providence Journal: Our elected officials’ focus on strengthening wealthy entities hampers the state’s ability to address important issues like education.