A conglomerate of private Providence universities and colleges and the Providence Mayor, Brett Smiley, signed an agreement on Oct. 12 that shapes monetary contributions to the city of Providence for private higher-education institutions. The Payment in Lieu of Taxes, or PILOT agreement, was signed by the four private collegiate institutions in Providence: Rhode Island School of Design, Johnson and Wales University, Brown University, and Providence College. The PILOT-program will increase voluntary payments from $93 million to $223 million for the city of Providence over the course of the next 20 years. According to a statement by the City of Providence, “In summary, between voluntary payments, commercial property taxes, transition parcel payments and the estimated value of community contributions, this agreement totals $442 million in contributions from the four colleges and universities over the next twenty years.” The City also outlined the allocation of this money, which will largely go towards two main policies:
bimonthly meetings between city departments and Providence residents to discuss improvements in quality-of-life for residents, and to create a stronger economic relationship between the city and the private universities therein.
Brett Smiley stated in an email, “This historic agreement more than doubles the voluntary payments Providence will receive from these institutions, making Providence a national leader in redefining how tax-exempt entities and communities can collaborate.” The Democratic mayor of Providence clearly favors this agreement, stressing its over 200 percent increase in monetary contributions to the city. Other local politicians are not entirely satisfied with the agreement, but still acclaim its results. According to John Goncalves, Ward 1 City Councilman, Brown Alum, and former Democratic Congressional candidate, “While agreements are never perfect … Kudos to the Mayor, City Admin and Council on a collaborative and fair-share agreement that will benefit the residents of the city of Providence.” Goncalves implies a flaw in the agreement, an issue that some students of these universities have echoed.
On Sept. 29, many Brown students attended and spoke at the City Council public hearing on the PILOT program, claiming that the payment is not nearly enough. According to a city assessment, without the PILOT program Brown would be paying an annual $49.3 million to the city. Even through the newly proposed agreement, Brown will only pay approximately $8.7 million annually. Clearly, there is an enormous disparity. The same report details Providence College’s true tax rate, which is an annual $16.2 million. PC will pay $18.4 million over the course of the next twenty years, or about $920,000 annually. Relative to Brown, the proportional disparity between what PC would pay to Providence in annual city taxes and the rate they pay under the PILOT program is even larger. Brown pays about 17.6 percent of the city tax rate through the program, while Providence pays about 5.6 percent. Critics of the agreement say that these private institutions should be paying significantly more in the PILOT agreement, or simply be subjected to what the city rate would be for an institution of such a size. Taxing these schools would provide the city with more money to invest in the Providence community. If Providence College truly desires to give back to the community, it may be wise to consider doing more than pre-orientation volunteer programs or an annual clean-up.