Sunday’s Providence Journal provided us with some fantastic information about the non-profits and what their status means to the city’s lack of funds. The article that accompanied the figures was not particularly informative, though it bears some comment. More important is an analysis of the data, and the role played by colleges, hospitals, churches, and the Providence Place Mall in bankrupting the city.
First, a word on the Mayor’s plan. Mayor Taveras has unveiled a plan to …ask?… the nine largest non-profit colleges and hospitals in Providence to pay up to 25% of what they would pay in property taxes if they were not taxed. According to the article in the Journal, this would raise almost $7 million for the city right away, and up to $24 million after full implementation in a few years. Gee, look, the Mayor is hearing our pleas to tax the rich!
Except, of course, that this plan has major problems associated with it. Perhaps the biggest is that it leaves the #3 biggest landholder completely off the hook. Who is #3? None other than the very non-profit Providence Place Mall. Were the Mall to pay full property taxes, it would contribute more than $17 million annually to the city. Instead, it has paid not a dime—nor would it under Taveras’s plan.
The ProJo article, of course, was pathetic. The hospitals provide all these free services out of the goodness of their hearts. The colleges provide so many jobs and services. The article quotes Butler Hospital CEO Patricia Recupero, saying: “With other hospitals, colleges and universities, we are building the city’s Knowledge District, which will attract industry and growth well into the future.” Really? The hospital will attract industry and growth? Like so many other neoliberal arguments, this one is premised on the notion that tax-exempt institutions like hospitals will provide a safe outlet for private corporations to funnel tons of money out of the public coffers, or to safeguard their own profits in tax-free havens. This argument has nothing to do with improving the actual quality of life for people in the city of Providence. And when it’s used as an excuse for why major profitable corporations can’t be asked to pay their fair share, it’s particularly noxious.
This is where Taveras’s plan just doesn’t cut it. It’s unclear from the article if the plan would be voluntary—likely not, as the article states the failures of voluntary plans around the country. More likely, it seems that there would be some mild obligation placed on such institutions if a bill sponsored by Rep. Carnavale were to pass—and even that seems quite mild, quite vague, and likely full of loopholes. And yet it still is unlikely to pass, given the millions of dollars these institutions can throw at lobbyists and the like. This is why no Mayor—and certainly not the Angel of Neoliberalism—can solve this crisis. Only a mass movement from below that forces the rich to pay up can really be uncompromising and effective. But enough of the soapbox—here’s the dirt, by category.
Brown University by itself is by far the largest landholder in Providence. It owns $1 billion worth of property—and if it were to pay full taxes on that property, it would raise almost $34 million for the city annually. This is a serious chunk of change. And I’m sorry, but those “Building Brown” banners down by the Route 195 relocation project do not look like they’re about educational improvements. Furthermore, how many houses does Brown own on the East Side? How many of those do they rent out to students? There’s a tremendous amount of dirt to dig up here, and I invite anyone with more in-depth knowledge to please comment on this.
The colleges together hold more than $1.7 billion in property, and would pay a collective $59.6 million if they were taxed. Instead, under Cicilline’s voluntary agreement, they paid almost $2 million in 2010. Half of the Providence crisis is due to these four institutions.
With $1.2 billion in property holdings, Providence’s hospitals and health centers—and their affiliated fund raisers—should pay $41 million in taxes. This includes Roger Williams Realty Corporation, which apparently is non-profit because of its role in raising money for the Roger Williams Medical Center. The hypocrisy is particularly stunning in the case of the hospitals, the biggest of which are owned by LifeSpan. Rhode Island has no public hospital (when did the last one close?), and so this massive corporation is generous enough to give medical care to the indigent residents of Providence…or is it all of Rhode Island they serve? And even so, the $27 million RI Hospital claims to have given out is just a tad more than the $21 million in taxes they should be paying. Also out of the discussion is the massive expansion of the hospitals over the last decade—an expansion which now, rumor has it, may include the newly-closed Flynn Elementary School.
CHURCHES AND PRIVATE SCHOOLS:
One surprise to me was to line up the churches against the private schools. Turns out that the private schools—Moses Brown, La Salle, etc.—actually own more property than the churches, and should pay about $6.15 million in taxes. The churches, including the synagogues, should be paying just over $5.2 million. Add these up with the hospitals and colleges, and the fiscal crisis is erased.
A note about the Catholic Church: it turns out that the Diocese is listed separately from a few churches/parishes. The Diocese actually holds less valuable property than the Quakers—although if you add up all the Church-held properties, they outdo the Quakers by quite a bit, and go from #21 on the list to #13. It’s also unclear to me if we should add in to Catholic-held properties La Salle Academy and St. Joseph’s hospital. For an institution that professes to help the poor and value education, and that gets its schools’ transportation and textbooks paid for by the city, you’d think they’d be a bit more charitable, and say, give unto Caesar, etc.
There also appear on the list a number of institutions that I did not exactly know how to classify. A few notes about these:
–Providence Place Mall. I mentioned it before; why isn’t it taxed to the full?
–Dominion Energy. This is the company that owns the Manchester St. Power Plant. It turns out that this company, which should pay about $9.5 million in taxes, has paid the city $6.5 million—what’s another $3 million?
–Swan Point Cemetery. With the shift in the average age of Rhode Island’s population over the past decade, this place should be doing fabulous business—why not pay the $3 million in taxes annually that you’d expect from a place that charges $750 for weekday burials?
–American Mathematical Society. OK, this one is down on the list, at #41, and would only contribute a mere $200,000 in taxes. But how in the hell did mathematicians end up with $6 million in property? I mean, they’re mathematicians who have to show all their work, right? Not like investment bankers, right? It turns out, as I understand from a student of mine—they make textbooks and ship them to poor children overseas. What a charitable endeavor…perhaps they could pay for the math textbooks in Providence as well?
In closing, I’d like to point out that this is simply a list of those entities that qualify—somehow—as “non-profit” and therefore don’t pay taxes. There is plenty more research to do on the corporate tax cheats in Providence and in Rhode Island generally. What about G-Tech? Or the companies that built those expensive luxury condos in downtown Providence? If General Electric got away without paying taxes for years, no doubt there are companies here doing the same thing. It comes back to one thing: the massive financial crisis that workers and the poor, teachers, parents and students are being forced to pay for, is entirely the result of not taxing the rich. Without real taxes on the people who can most afford to pay them, the crisis is intractable. But the possibility of taxing the rich–even just a little bit–shows that it is also not inevitable.