When candidate Donald Trump was on the trail, he often promised to address the reckless, out of control spending that plagues DC. When he became President Trump, he began to follow through on that, and many other campaign promises.
At a September Pennsylvania rally, Trump told his supporters, “What a lot of people don’t know is that universities get massive tax breaks for their massive endowments.” He continued by saying, “These huge, multi-billion dollar endowments are tax-free, but too many of these universities don’t use the money to help with the tuition and student debt.”
“They have to make good faith efforts to reduce the cost of college.”
The latest report by the non-partisan government spending research group OpenTheBooks.com, reveals that America’s richest, most exclusive universities and non-profits are being heavily subsidized by the American taxpayer.
Over the last 7 years, the Metropolitan museum has received $1.22 million in grants, even though its well known, star-studded annual gala has accumulated $3.7 billion in financial assets and has an annual revenue of over $660 million.
“Why are taxpayers funding nonprofits that have assets of at least $1 billion?” the watchdog group ask, a question likely on the lips of many taxpayers. “Do charities have a right to public funding no matter what their balance sheet?”
The Met is not the only culprit, nor the largest. America’s top universities, like Harvard and Yale, have also benefited tremendously from D.C.’s generosity with the taxpayer’s dollars. Despite having billion-dollar endowments schools are raking in the federal funds.
According to the report, between 2010 and 2015, the eight Ivy League institutions have taken almost $7 billion a year in tax payer funds. That works out to $120,000 per student. That is shocking when considering a ranking of the 100 richest universities shows the average cost per student is well under $25,000.
Even though these elitist enclaves teach kids of some of the worlds wealthiest families, and have endowments that can sustain themselves for over 50 years, they are still coming to the government for a handout.
At their current balances, Ivy League endowments are at a point that they could provide free tuition to the entire student body forever, assuming donations stayed at their current levels. “The Ivy League needs to pay its own way…The taxpayer gravy train needs to end,” Adam Andrzejewski, founder of Open the Books, told Fox News.
Budget hawks and critics point out that the government pays much higher reimbursement rates. When the rates are compared to those paid by foundations and philanthropists, such as The Gates Foundation, the government is paying 2.5 to 10 times more. Yet that does not stop researchers from applying for those grants, and happily taking the funds.
This has come to the forefront due to President Trump’s attempts to follow through on his campaign promise. The president has proposed to cut $7 billion from the National Institutes of Health budget over the next 18 months. Secretary of Health and Human Services Tom Price believes they can achieve a large portion of these savings in the “indirect expenses” portion of the NIH funds. Those funds are used to cover anything from lab equipment to paying electric bills.
Putting this into perspective, last year, universities received $16.9 billion in federal funding for research and $6.4 billion for overhead costs. If President Trump got his full $7 billion proposed cut, that would be a 20% cut in funding.
Some university officials wished to work with the new administration to find common ground regarding cutting regulations, which they admit would lower their overhead bills.
Trump is not the only person in DC talking about this seemingly unnecessary assistance. New York Republican Tom Reed, of the powerful House Ways and Means Committee, is also looking to hold universities accountable and to cut back their burden on taxpayers.
During an interview on FOX Business’ “After the Bell,” Reed said “All we are asking is that this money go to working families in tuition reduction on the investment income that comes off these billions of dollars in a tax-free manner.”
It’s time for the hard-working taxpayer families to be the people we stand with, not these large multi-billion dollar endowments that are accumulating tax-free dollars,” he said. The universities are not taking this sitting down. Some have pushed back when asked for comment.
In a statement, Robert Durkee, a Princeton vice president and secretary, claimed the study painted the wrong picture because it didn’t take into account all the money the college receives and then reinvests. He went on to sat that most of the tax incentives the college receives goes toward libraries, laboratories, classrooms, research and financial aid.
Yale wants taxpayers to see these tax dollars as a good investment, instead of “a drain on taxpayers”, because they believe their presence is a major financial benefit to the surrounding town, and its residents.
“Since 2000, over 50 startups based on Yale inventions and located in New Haven have attracted over $5 billion in investment to New Haven and surrounding towns,” Tom Conroy, a Yale spokesman, told Fox News. “Alexion, which employs 1,200 people in New Haven, is a prime example of Yale’s impact.”
This may be true, but is that an issue for the national taxpayer? In fact, with voters electing President Trump, who openly campaigned against these lavish grants to very rich schools, the voters have sent a message that they do not see things as Mr. Conroy sees them.