I agree with Mayor David Cicilline when he says that he has a fiscal and moral obligation to find creative solutions for Providence's budget deficit that do not further burden those who already contribute significantly to the city's financial well-being. Unfortunately, the mayor does not consider private colleges and their students among those who already bear their fair share of the fiscal burden. On this point we deeply disagree.
By proposing a $300 annual tax on every student who enrolls at one of Providence's private colleges, the mayor would create a fee for the right to become educated in the city.
The mayor argues that since these students do not pay for city services, they have a civic duty to contribute to Providence's revenue base. However, Providence College students already contribute when they pay their tuition. On behalf of their students, Brown University, Johnson & Wales University, Rhode Island School of Design, and Providence College agreed in 2003 to make voluntary annual PILOT (payment in lieu of taxes) payments to the city totaling some $48 million over a 20-year period. This agreement appropriately recognized the services provided to our students and the 9.6 percent of city property that is owned by these tax-exempt institutions. As a tuition-dependent institution, Providence College's PILOT payments are made from tuition revenue.
While we continue to honor that historic pact, we also make other financial contributions to the city. Although Providence College owns only a few properties outside the campus gates, we pay taxes on every one of these properties, and we will continue to do so. While Providence College employs its own public safety officers and EMTs, we also pay for the public-safety services used by students. In the last three years, we have paid more than $180,000 for police details to enhance security for students and residents in the Elmhurst neighborhood. Since 2003, the college has paid approximately $80,000 for fire alarm dispatches to the campus.
In 2003, in support of Police Chief Dean Esserman's community-policing initiative, the college renovated to police specifications a property it owned near the campus and the Chad Brown housing development for use as a neighborhood policing sub-station. Cited by the chief as a model facility for community policing, the post now provides a high-profile law enforcement presence in this part of Providence, at no cost to the city. Earlier this year, a neighborhood parole office was relocated to this site, again at no cost to the city. And the college recently provided financial assistance to support refurbishing city firefighters' second floor living quarters at the Admiral Street fire station.
Providence College also contributes to the local economy by drawing thousands of parents, family members, alumni, and fans to the city for sporting events, commencement, homecoming, and reunion events--filling Providence's hotel rooms, restaurants, shopping venues, and tourist attractions to generate robust revenue for local businesses and related taxes for the city and state. We continue to enrich our community through educational, cultural, and religious programming and events that are open to the public at little or no cost. Providence College students volunteer thousands of community service hours to improve the city's quality of life.
The mayor seems to regard the $300 tax as a minor expense. But for students who never counted on their family's college savings fund diminishing in value, or loan sources drying up, or a parent losing a job, an additional expense would indeed be a heavy burden. We have many students struggling mightily to stay in school. To ensure that that every Providence College student has the opportunity to continue his or her education, earlier this year I authorized an emergency reallocation of some $450,000 of the College's current operating funds to meet a dramatic increase in financial-aid appeals.
Our institutional investment in financial aid now exceeds $44 million, or more then 30 percent of our operating budget. Given the breadth and depth of the economic crisis, students from all socio-economic backgrounds are asking for and benefiting from this financial aid. Currently, more than two-thirds of PC students receive PC-funded financial aid, and we anticipate that the significant increase in aid appeals received this year will not subside any time soon.
Even putting aside the formidable challenge to meet future financial aid demands, how do I reassure students who would be taxed $300 next year under this proposal that they will not see this "user fee" increased each year as a convenient device to fill the city's budget gap? How do I convince parents, who pay the tuition, room, and board fees that comprise most of Providence College's operating budget, that a portion of the investment in their child's education is appropriately being diverted to the City of Providence?
When we originally entered into the PILOT agreement with the City of Providence, we mutually agreed on our fair share over a long period of time so that both parties could plan accordingly. We did not go to the city this year when we needed more money for financial aid to ask it to accept a lower contribution from us. That would not have been right. We found other ways to meet unexpected expenses in such a way that we could honor our agreement. We believe the city should do the same.
Providence College wants to honor its agreement with the city. But Providence College also must honor its agreement with its students and parents to invest in education. I will continue to do everything I can to fulfill my promise to parents and students that their substantial financial investment in a Providence College liberal arts education will be appropriately used to carry out our Catholic and Dominican mission. That promise does not include supporting demands to divert their investment elsewhere.
Finally, what philosophically troubles me the most about the mayor's proposed student tax is that it represents a radical departure from the longstanding recognition of the value of educational and religious institutions to the life of the city. One of the ways that government promotes the important public goods of education and religion is by granting tax-exempt status to institutions like Providence College. By proposing to tax our students, Providence is, in effect, revoking our non-profit tax-exempt status. Who will be next? And what will it do to the fabric of our city?
In difficult economic times, our deepest values are put to the test. Providence needs to pass this test without damaging the very goods it needs the most.
The Rev. Brian J. Shanley is president of Providence College.