INDIANAPOLIS – Four private colleges in Indiana would face new tax hikes on their endowments that could force the schools to cut their operating budgets if the House Republican tax bill were enacted.
Both the House and Senate bills raise excise taxes on the investments of endowments for certain private colleges and universities. The House bill, which is more far-reaching, raises the taxes of 68 schools nationwide, including four in Indiana – all of which are major employers in the districts of three Republicans who all voted for the tax bill.
Indiana’s four schools are:
Wabash College is also the alma mater of Congressman Messer, Congressman Rokita, and Rep. Mike Braun.
For smaller colleges, including many of those targeted in the House tax plan, their endowment is not only an investment vehicle but a crucial reserve fund for covering budget shortfalls that otherwise would be passed onto students in the form of higher tuitions and fees. Earlham, for instance, funds over a third of its operating budget through its endowment, according to an Indy Star story today.
“Earlham offers an elite quality education, but most of our students are from middle to lower-income families,” Phil Morgan, Earlham’s CIO, told the Star. “…I don’t think it’s well understood how [endowments are] actually broadening access to education.”
“Indiana schools create good-paying jobs and drive the economies in their districts on top of trying to provide affordable educations, but the Hoosier Republicans who voted for the McConnell tax bill are more interested in using them to fund further tax breaks for the rich,” said Will Baskin-Gerwitz, Senior Media Strategist for the Indiana Democratic Party. “By voting to raise taxes on their own alma mater, Congressmen Messer and Rokita are preventing the next generation of Hoosier students who are simply trying to better themselves through education from receiving the same opportunity to learn that they themselves had.”
This release is part of day four of the Indiana Democrats’ 12 Days of Taxes, a daily series highlighting the problems the McConnell tax bill would create if passed this holiday season. While the McConnell plan would raise taxes on middle class Americans to fund more tax breaks for the wealthy and major corporations, its consequences stretch across American life.