By:  Ilana Siyance

On Tuesday, New York State lawmakers unveiled legislation to eliminate enormous property tax breaks for two of the largest private universities in the state.  As reported by the NY Times, the bill would mean Columbia University and New York University would lose a collective $327 million in annual property tax breaks.  The two top Manhattan schools have grown to become among the Big Apple’s top 10 largest private property owners, with the values of their properties increasing steadily.  As part of a nearly 200 years old tax exemption, which is part of the state constitution, private universities, museums and other nonprofits are exempt from paying annual property taxes.  The proposed bill says that the institutions should start paying their full value property taxes, and further that those funds will be redistributed to the City University of New York, which is the largest urban public university system in the United States.

While the legislation has already been introduced, there are legal hurdles which would make enacting it not so simple.  Per the Times, Lawmakers would need to adopt the changes in consecutive legislative sessions. Then, the public would need to vote to approve the law on a statewide ballot.  “When the constitution of the state was written, there was no idea that such an exemption could apply to two of the top landlords in New York City,” said Assemblyman Zohran K. Mamdani, a Queens Democrat who is introducing the bill in the Assembly. “This bill seeks to address universities that have so blatantly gone beyond primarily operating as institutions of higher education and are instead acting as landlords and developers.”

The proposed legislative change comes following a September investigation by The NY Times and the Hechinger Report, which revealed that the city’s wealthiest universities have become larger than ever in history.  The report found that the colossal university’s acres of vast real estate holdings are leaving a big hole in the city’s budget.  The investigation also found that although Columbia has grown in physical size to be the city’s biggest private landowner, it now enrolls fewer students from NYC.

The proposed legislation would only apply to Columbia and N.Y.U. and not to other large private universities, as the annual real estate tax exemption threshold would be set at $100 million, the NY Times reported.  Even Cornell University in Ithaca, which owns significant land, would not be affected. Lawmakers said the other universities would be excluded because their tax breaks do not meet this threshold.   “But this is a point where we have to look where all revenues are coming from and where all revenues are leaking. We have to stop those leaks,” explained State Senator John C. Liu, a Queens Democrat who is introducing the legislation in the Senate.

A spokeswoman for Columbia said university officials were reviewing the legislation. She added that Columbia benefits the city’s economy through its research and capital projects.

“To choose two charitable, non-profit organizations out of the thousands in the state and compel them to be treated like for-profits certainly strikes us as misguided and unfair,” said NYU spokesman, John Beckman. “We are deeply appreciative of those policies, which have been in place for two centuries, but we also take some modest pride in the many, many ways, small and large, that N.Y.U. contributes to the city’s well-being and its economy.”