Endowment Debate Seeps into the States

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Source: InsideHigherEd.com

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With college endowments a favorite target for politicians in Washington, and many states struggling to find enough tax revenue to make ends meet, it’s almost a surprise that it took state legislators this long to start casting their eyes on colleges’ funds. But it’s perhaps not a shock that if the issue were to emerge anywhere, it would be in Massachusetts, home to the university (Harvard) whose nearly $34.6 billion endowment has become the poster child for higher education wealth.
During debate over the state’s budget for the 2009 fiscal year Monday, members of the Massachusetts House of Representatives considered imposing a 2.5 percent tax on assets exceeding $1 billion in any college’s endowment (in other words, any amount up to $1 billion would not be taxed). The measure did not win approval, with the House opting instead to ask the State Department of Revenue to study the proposal. But in the meantime, lawmakers engaged in the sort of rhetoric that has been increasingly heard in the halls of Congress in recent months, where U.S. Sens. Charles Grassley (R-Iowa) and Max Baucus (D-Mont.) this spring directed 135 colleges with endowments over $500 million to report on how they were spending those funds.
“Why do we want to tax the poor all the time, but we let off the hook the richest of the rich?” said State Rep. Angelo Scaccia, a Democrat, said during the course of Monday’s debate, according to the Metrowest Daily News. “We’re not going to break them,” he added of colleges’ endowment funds. “We just want a little.”
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Read more: http://insidehighered.com/news/2008/05/01/mass