Should Universities Help Pay for City Services?

The University of Massachusetts at Lowell is growing. And while its growth has helped hold up, and expand, the economy of the former mill town it calls home, Umass Lowell is "taking property off tax rolls while straining roads, police, and other municipal services," writes Lonnie Shekhtman. While city officials have asked the school to contribute payments in lieu of taxes to offset those costs, "UMass Lowell has resisted making cash contributions to the city, arguing that the economic activity it generates provides far greater benefits."

"The negotiation here is one that also plays out in many other communities across the country as they try to balance the economic impact of tax-exempt operations, such as universities, hospitals, and museums, against the need to fund critical services financed by property taxes," explains Shekhtman. "In today’s knowledge-based economy, few would contest that such institutions have become engines of growth. But as local officials try to balance budgets, many ask: Is that enough?"