Impact on state and local government revenues

Despite its status as a nonprofit institution, Brown — like any other major enterprise — generates revenue for state and local governments in a variety of ways. Overall, we estimate that in fiscal year 2012 Brown directly contributed more $22.9 million to the state and city treasuries. 

At the local level, we estimate that Brown’s payments to the City of Providence in fiscal year 2012 (including real property taxes, voluntary payments and fees) totaled more than $8.8 million. This total represented an increase of almost 80 percent in the financial support the University annually provides to the City. The increase resulted primarily from a new agreement between the two parties, under which Brown — in consideration of several actions to be taken by the City — committed to making an additional voluntary payment of $3.9 million annually through June of 2016; and $2 million annually through 2022.

Table 7 provides an overview of the University’s payments to the City.

Table 7: University payments to Providence, fiscal year 2012

Type of payment Payments in FY 2012

Voluntary payment (pursuant to the 2003 Memorandum of Understanding with the City)

$1,200,000

Voluntary payment on buildings purchased since 2003 and used for academic purposes

$1,274,000

Voluntary payment (pursuant to the 2012 Memorandum of Agreement with the City)

$3,900,000

Real property taxes paid on non-tax-exempt properties

$1,128,000

Real property taxes paid on leased properties

$466,000

Providence Water Supply fee

$785,000

Other fees

$73,000

Total

$8,826,000

 

Brown also generates revenues for the state. In fiscal year 2012, University employees paid approximately $11.94 million in state income taxes on the salaries and wages they earned at Brown. [2] The University also paid about $904,000 in state unemployment insurance taxes; and $1.257 million in fees to the Narragansett Bay Commission.

 


[1] Providence Business News 2012 Book of Lists

[2] The $11.94 million cited here is the amount withheld from Brown employees’ salaries and wages and paid to the state. Taxes finally paid by University employees may vary somewhat from this figure.