Students Push for Agreement on College Taxes
December 12, 2015
The College owns roughly $200 million of property and pays no tax on the majority of it. Some student activists want that fact to change.
Since nonprofits like the College are exempt from property taxes, the College pays no tax on buildings related to education, such as classroom buildings and dorms.
According to Council member Bryan Burgess, the lack of tax revenue coming from the College breeds resentment and adds to the divide between the College and residents.
“Some people in Oberlin have a lot of animosity,” Burgess said. “The college students get all the same services, but they don’t pay.”
According to Council member Kristin Peterson, the College would pay roughly $4.4 million more in property taxes if it weren’t tax exempt. The city’s expected revenue in 2016 is about $9.3 million in total.
Student activists have begun pushing for the College to make a Payment-in-Lieu-of- Taxes agreement with the city. With a PILOT agreement, the College would make up for lost tax revenue by voluntarily contributing money to the city over a specified period of time.
PILOT agreements are somewhat common in cities where large nonprofit organizations own a lot of property, such as Boston and Baltimore.
To College senior and Responsible Investing Organization member Joelle Sostheim, a PILOT agreement would be a good way to alleviate the wealth inequality between the city and the College.
“There’s a pretty obvious divide between the city and the College. I sort of think of it as an invisible wall. And to me, what stands out is the class difference. There’s a lot of really wealthy people in the College, and the city is largely low-income people. … To me, it seems wrong to have that really strong class divide and not do anything about it.”
Burgess and Peterson both agreed to the idea that a PILOT agreement would help bridge the town-gown divide.
However, to Assistant to the President for Community and Government Relations Tita Reed, a PILOT agreement isn’t necessary because the College helps the community in other ways.
“If you look at all of the other ways in which the College and the town work well together and see mutual benefits — whether it’s through the Bonner Center for Service Learning and so many areas of the community, from the schools to the churches, there are Oberlin College students volunteering their time for community service.”
Reed said that the College helped pay for the city’s new firetruck and, through the Green EDGE Fund, the city’s recycling and refuse trucks. Reed also noted that the College kept the Apollo Theatre open and gave money to construct Splash Zone and the Allen Memorial Hospital.
“We give a lot in a lot of ways,” Reed said.
Reed added that while, to her knowledge, the city had never made a formal request for a PILOT agreement, the College would work with the city in the event of a formal request.
“If the city was to formally submit a proposal and want to have that conversation, we would come to the table. We would have to make a decision one way or the other.”
To Burgess, the College’s requirement that most students live on campus has worsened the situation. According to Burgess, most students used to live off campus and contribute to the local economy with rent.
“College students were paying rent to private homeowners who were then paying income taxes off of that rent,” Burgess said. “So in a roundabout way, the college students were paying taxes.”
Burgess said that this topic had last come up during the recession when the city had to slash budgets to deal with a significant budget shortfall. Oberlin voters subsequently approved a property tax hike, bringing the rate to 2.05 percent to fund the city government in a difficult period.
“The residents of Oberlin have done their part, and now it’s time to reignite that conversation with the student body,” Burgess said.
Burgess suggested that the student body enact a student fee — he suggested $50 a semester — to fund a PILOT agreement. He agreed with Reed that student contributions to the community should be factored in but disagreed that student volunteerism makes a PILOT agreement unnecessary.
“It’s a service to the community; there are some things you don’t put a dollar value on, and I think it’s for that reason I’d start out talking about something so low as $50 a semester,” Burgess said. “That’s in recognition of all the other contributions that students already make.”
Sostheim said that while the College will probably not be able to compensate the city for every dollar lost through the institution’s property tax exemption, the College could still make a huge difference.
“Obviously it’s not realistic that the school is suddenly going to dish out $4 million a year,” Sostheim said. “But I do think that they would be capable of paying $700,000 to the city every year. I think that’s something that President Krislov could make happen, or a combination of efforts — maybe 10 extra dollars on tuition, a hundred extra dollars on tuition, something like that — in combination with fundraising. It’s only just that we do that.”
Sostheim added that along with pushing for a PILOT agreement, RIO plans to hold “getting to know Oberlin” panels of community members to educate students about the city next semester.
“I hope that students can be passionate about this, because we take up a lot of space in this community, and it’s really important to be aware of where you’re living, especially if it’s only temporary,” Sostheim said.