Friday, May 9
WILLIAMSTOWN -- Williams College might see the state shave a yearly slice from its $2 billion endowment fund if a plan some legislators are supporting passes into law, but administrators are arguing the law would be unconstiutional.

Legislators asked the Depart-ment of Revenue two weeks ago to study a plan that would place a 2.5 percent tax on college endowments of more than $1 billion. Current law states endowments are tax-exempt, as private colleges are non-profit organizations.

James Kolesar, assistant to the college president for public affairs, said on Thursday that administrators are not worried the law will pass anytime soon.

"We certainly understand the attempt to find revenue for the state, but this is a really, really bad idea," Kolesar said. "The first reason is the law appears to be unconstitutional, and the second reason is, who would give an endowment gift if they knew, over time, the entire gift would be taken away?"

The plan could be unconstitutional because it would tax the otherwise tax-exempt institutions differently based on their wealth, according to state Rep. Daniel E. Bosley, D-North Adams.

"If it's unconstitutional, you might be

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able to amend it to make it constitutional," Bosley said Thursday. "My feeling is, it will have a hard time passing. But, it's certainly something to take a look at."

Eight other institutions in Masssachusetts have endowments of more than $1 billion, including Amherst and Boston colleges, Harvard University, Massachusetts Institute of Technology, Smith College, Tufts University and Wellesley College.

Harvard has the largest endowment at $34 million. Legislators predict taxing the schools could result in revenues of $1.4 billion per year. The state's total budget is about $28.2 billion. State Rep. Paul Kujawski, D-Webster is sponsoring the bill.

"It's appropriate to study this thing," Bosley said.

He added that, if the colleges are taxed, he would question the revenue's placement in the state's general fund. He said money put there would not necessarily help the cities and towns where the colleges lie. He said he understands that colleges still contribute to a community, even without paying taxes.

"Every college has a story to tell," he said. "We'll look and see what happens."