Brown University pays an $8.7 million payment in lieu of taxes (PILOT) to Providence, starkly lower than what they would owe if taxed normally. While nonprofits like Brown are largely tax-exempt, critiques have arisen about the low contributions from wealthy institutions compared to their enormous endowments. Notably, Davarian Baldwin points to a parasitic relationship where universities contribute to economic inequality, being the biggest employers and landowners, shaping local economies to their advantage while relying on low-wage labor in cities like New Haven.
While universities often enjoy significant tax-exempt status, their relationship with host cities is increasingly viewed as exploitative, with institutions drawing extensive benefits without equitable contributions.
Davarian Baldwin's remarks highlight how universities dominate local economies, set wages, manage healthcare, and interact closely with law enforcement, raising questions about their societal impact.
Baldwin's claims suggest that prestigious universities like Yale profit from cheap labor in downtrodden cities, further exacerbating economic inequalities regardless of their vast endowments.
Many institutions engage in PILOT programs, seen as voluntary contributions but arguably function as necessary appeasements to local authorities due to their non-tax status.
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