Jenna Robinson of the Martin Center uses her latest column to probe tax exemptions for university-owned property.

Connecticut legislators made headlines last year when they introduced a bill to tax revenue-generating college and university property. The bill was crafted to help New Haven, where Yale University is located, remain solvent.

The bill specifies that any commercial property that is owned and operated by a university and that generates more than $6,000 in revenue per year will no longer be tax exempt. The bill applies only to universities that own property worth $2.5 billion. In practice, that provision means that Yale would be the only university affected. Although the bill did not pass, it has important implications for well-heeled institutions across the country, including many in North Carolina.

That’s because the idea of changing how universities are taxed has been gaining steam in the past few years. One proposal that was loudly decried by universities—and some free-market reformers—was to tax large university endowments. The idea of taxing university property used for commercial purposes has been a less controversial option so far.

Last year, the Senate Committee on Finance and the House Committee on Ways and Means requested information from the 56 private universities in the United States with endowments worth more than $1 billion, including Duke University in Durham and Wake Forest University in Winston-Salem. (If public universities had been included, UNC-Chapel Hill and NC State would also have been on the list.)

Although most of the committees’ questions concerned the universities’ endowments, the size of their tax-exempt property holdings was also of interest. As education reformers writing in the Washington Post revealed, many wealthy universities own extensive—and valuable—real estate. Harvard alone holds 25 million square feet of property. The article’s authors conclude that automatic property tax exemptions for universities should be on the table for debate.

This idea is popular with some college town residents who have to foot the bill to pay for municipal services used by tax-exempt universities.