Dive Brief:
- A recent multi-million dollar settlement between Princeton University and residents from the community surrounding the institution could set the stage for a number of legal challenges to universities' tax exempt status throughout the U.S., Inside Higher Education reports.
- Princeton, which will pay more than $18 million to satisfy claims that it earns and shares profits from facilities located off campus instead of paying taxes on it, could be a model for how other towns and cities view auxiliary properties throughout communities which may be tax exempt.
- Already the largest tax payer in the city of Princeton, NJ, university officials say the settlement is a good faith showing of support for the community and an unwillingness to logjam the justice system or to deplete resources from the institution.
Dive Insight:
While most colleges and universities being challenged on the tax exempt status of businesses orbiting the campus could withstand certain legal challenges, it is true that it is cheaper and more socially responsible to side with communities than against them on matters of municipal support.
National fallout from how "smart" it may be to avoid paying taxes is clear; and colleges, already in the news cycle for the billions they have but do not spend on decreasing costs for students and families, probably are best suited with leaders who commit to community support rather than a college's right to operate within it tax-free.