Connecticut House Bill HB05098

Connecticut 2016 Regular Session

• Introduced: 2/9/16
• Refer: 2/9/16

Caption

An Act Concerning A Tax On Certain Educational Institutions.

Impact

If enacted, the legislation would amend the general statutes to include provisions for taxing the endowments of qualifying educational institutions. This could potentially reshape the financial landscape for these institutions and their ability to manage their endowments. The proceeds from the tax would directly support the funding of community colleges, which could lead to a significant increase in enrollment and accessibility for residents. Supporters assert that this could enhance workforce development and provide essential skills for a larger segment of the population.

Summary

House Bill 05098 proposes a tax on the endowments of certain educational institutions, specifically those possessing endowments of one billion dollars or more. The objective of the bill is to establish a revenue stream that will fund universal free community college for residents of the state. By taxing endowments that do not meet the required spending threshold of five percent on educational support activities, the bill aims to ensure that large educational assets contribute to the public educational system rather than remain untapped resources. This initiative reflects a growing concern about the affordability of higher education and the need for increased access to community colleges.

Contention

The proposal has faced criticism and support, leading to a diverse range of opinions among legislators and stakeholders. Proponents argue that large educational institutions should play a role in funding public education, especially considering their substantial financial resources. On the other hand, opponents of the bill may contend that taxing endowments could discourage donations and financial contributions that are critical to the funding of educational programs and initiatives. Concerns have also been raised about whether this approach could limit the autonomy of these institutions and how it might affect their long-term financial strategies.