Will an Endowment Tax on Rhode Island’s Private Colleges Work, and How Much Could It Bring In?

Industry leaders and university officials in Rhode Island were outraged after a bipartisan slate of lawmakers recently introduced a bill that would allow host cities to impose taxes on endowments on private, nonprofit institutions of higher education. The bill, sponsored by Representative David Morales, a Providence Democrat, would allow municipalities where these institutions are located to impose a tax of up to 2 percent on each endowment. Across all eight private, nonprofit schools this tax would impact, up to $173.4 million could start flowing into host cities annually.