New York Times, ‘The Untouchables’: How Columbia and N.Y.U. Benefit From Huge Tax Breaks:

As New York City’s budget tightens, its wealthiest universities are bigger and richer than ever. Now, some officials think it’s time for the schools to pay more in taxes.

As Columbia University puts the last touches on its brand-new campus in Harlem, it has reached a milestone: The university is now the largest private landowner in New York City.

In a city where land is more valuable than almost anywhere in the nation, the school now owns more than 320 properties, with a combined value of nearly $4 billion. The growth has helped it stay competitive within the Ivy League and meet its broader ambitions to become a global institution.

By many measures, those ambitions have also helped lift the city around it, attracting higher numbers of students, producing new jobs and boosting New York’s reputation as an international center of knowledge.

But as Columbia has expanded its footprint, it has also become more of a drain on the city budget because of a state law more than 200 years old that allows universities, museums and other nonprofits to pay almost no property taxes.

The law saves Columbia more than $182 million annually, according to an analysis by The New York Times. The amount has soared from $38 million just 15 years ago as the university has bought up more properties and their value has increased.

Columbia’s property tax savings, which are a fraction of its $14.3 billion endowment, far exceed the tax breaks granted to many high-profile commercial developments, including large-scale sites like Hudson Yards. They are 50 percent larger than those at Yankee Stadium and greater than the combined tax deals for Citi Field and Madison Square Garden.

Even as Columbia has swallowed up more land, it has taken fewer students from New York City. Since 2010, the number of city students enrolled in Columbia’s undergraduate ranks has declined by 37 percent.

Nearly every state has property tax exemptions for nonprofits, including universities, which are exempt from paying taxes on their academic buildings and dormitories. (Universities, including Columbia, pay tax on properties they own that are not used for educational purposes.)

But they are often contentious, and the seven other Ivy League universities pay some property taxes on those buildings or voluntarily pay millions of dollars every year to their local governments and school districts.

Not one university in New York City does, including two of the nation’s wealthiest institutions, Columbia and New York University. N.Y.U., with its sprawling campus in Greenwich Village, had property tax savings of $145 million this year.

“I call them the untouchables: I can’t think of anyone who has been willing to take on this issue,” said Harvey Robins, who worked for Mayor Edward I. Koch and Mayor David N. Dinkins and has followed the issue of tax exemptions for universities. “It’s really important that we begin a conversation finally about who pays what and who subsidizes whom.” …

[W]ith financial challenges looming, a growing number of city and state officials are re-examining the longstanding exemptions for private universities. Property tax revenue accounts for more than 40 percent of the city’s total tax collections. …

The state’s tax breaks for nonprofits date to 1799, long before Columbia and other higher education institutions became vast enterprises with billion-dollar endowments. At the time, the country’s first universities were primarily connected to religious denominations and were deemed charitable enterprises. …

Local public schools have questioned Columbia’s commitment to its surrounding community. As recently as 2010, a quarter of Columbia’s undergraduate students came from New York City: 2,236 students. By 2022, that number had decreased to 1,416, or about 15 percent of the student body. …

Other major universities in the city have a larger percentage of New Yorkers. At Fordham University in the Bronx, 23 percent of undergraduates come from New York City, a percentage that has been stable for the last decade. At N.Y.U., about 17 percent of undergraduate students are New York City residents.

Like Columbia, N.Y.U. has sought to transform itself into a national and global powerhouse. It has been expanding since the 1980s and recently began to build out its campus. …

New York is among 49 other states with property tax exemptions for private, nonprofit entities, which supporters say allow them to provide crucial social, economic and cultural benefits to their communities. In the case of universities, they conduct often costly research and public-policy studies and employ people who pay income taxes. …

But in other cities, officials have pressured universities to make voluntary payments, known as payments in lieu of taxes, or PILOTs, or similar annual donations. Even within New York State, other cities have charted a different course.

In upstate Ithaca, Cornell University started making annual payments decades ago that have now grown to $1.6 million and are expected to climb to $4 million in October.

Columbia has sought to maintain close ties to many of the people who might put pressure on it to contribute, spending more than $2.2 million since 2017 on firms that lobby city and state officials. The university said that the firms that it employs provided other services in addition to lobbying and spent most of their lobbying efforts on education, research and health care. …

During the 2021 mayoral campaign, candidates including Andrew Yang and Curtis Sliwa called for ending the property tax exemptions altogether.

But forcing the universities to pay property taxes would require lawmakers in Albany to change state law.

Zohran Mamdani, a state assemblyman who represents parts of Queens, has said he plans to try this year, with a bill that would end property tax exemptions for private higher education institutions with exemptions of more than $50 million in real estate.

The only private universities that meet that threshold are Columbia and N.Y.U.

This story was produced in collaboration with The Hechinger Report, a nonprofit news outlet that covers education. Hechinger is an independent unit at Teachers College, Columbia University.