Gov. Rick Scott's Attempt To Woo Yale To Florida Falls Flat

By FEROZE DHANOA

TALLAHASSEE, FL - Florida Gov. Rick Scott is inviting Yale University to consider moving operations from Connecticut to the Sunshine State following the Connecticut state legislature's proposal that would tax income from the university's $25.6 billion endowment.

The legislation (which has already been shot down) would apply to schools in the state with endowments of $10 billion or greater, which only includes Yale. In a written testimony, Democratic State Sen. Martin Looney whose district includes New Haven said the bill creates an incentive for exceptionally well-endowed universities, like Yale, to spend more to support access to higher education and create innovative, high paying jobs.

The state senate passed a bipartisan deal that would close the estimated $220 million budget shortfall for the current fiscal year while preserving funding for hospitals, non-profits and municipalities.

The legislature will have to figure out a way to close the estimated $900 million budget deficit for the next fiscal year.

Bloomberg explains:

"Connecticut is facing a $266 million shortfallfor fiscal 2016, according to the state Office of Fiscal Analysis, and taxing the endowment’s earnings could help close the gap."

Along with the proposal, New Haven mayor Toni Harp is backing a proposal to tax Yale's commercial real estate, the Associated Press reported. City officials say a new approach is needed to help distinguish between the university's commercial real estate from its tax-exempt educational real estate holdings.

In a testimony Harp said, "more modern guidelines as to what’s taxable and what’s tax exempt are essential." She cited an example of a building purchased by Yale last month that could come off the city's tax rolls even though the building "could become a Yale-operated technology hub from which products and services are sold to surrounding businesses."

“The proposed taxes on Yale would diminish the university’s ability to carry out its charitable mission and to enable and support growth in New Haven,” Richard Jacob the school’s associate vice president for federal and state relations wrote in written testimony, Bloomberg reported. “Yale’s generous financial aid policies, which enable Yale College students to avoid any loans, and which waive any parent contribution for low-income students, exist because of the endowment.”

However, as reported by the CT Mirror, Yale has shot down the Florida governor's offer. And on Tuesday, the proposed tax on Yale's endowment was shot down by the administration of Gov. Dannel Malloy.

So while Yale will not be going anywhere just yet, an editorial in the New York Sun explains while relocating an entire university is not simple, it isn't impossible either.

And it's not the first time Florida has tried to steal a revenue generator from Connecticut. When GE was considering leaving the state, Scott made a pitch to the business.

Image credit m01299 via Flickr Creative Commons