June 7, 2003
Dear Brown faculty and staff,
I write today with good news about the University’s relationship with the City of Providence.
As you may know, Brown and the three other Providence-based private, nonprofit colleges and universities have been negotiating with the city for many months. We have been working to arrive at an agreement on how our four institutions can be helpful to the city in an economic climate that is difficult for us all. We made it clear from the beginning that any agreement must fully respect our status as tax-exempt institutions and not compromise our ability to advance our own educational missions.
I am pleased to report that we have achieved exactly such an agreement. Shortly before noon on Thursday, the four presidents joined Mayor Cicilline at a news conference to outline provisions of the plan. They include:
- voluntary cash contributions totaling $8.472 million. These contributions will start in the fiscal year beginning July 1, 2003, and will be spread over the next four years for several properties that were either acquired by the colleges in 2002 or are in the process of being acquired in 2003. Brown’s contribution under this provision will be $1.3 million;
- voluntary contributions totaling $1.730 million in fiscal year 2003-04 and rising at a rate of 1.5 percent for 20 years, reaching $2.295 million in the 20th year. Under this provision, Brown’s voluntary annual payments will begin at $1.065 million and grow to $1.413 million in the 20th year;
- voluntary contributions for any properties acquired by the colleges and universities in the future, according to an agreed-upon schedule: five years at 100 percent of the property's existing taxes at the time of purchase; five years at 66.67 percent and five years at 33.33 percent. These payments would be reduced to zero after 15 years and remain at zero for as long as the respective college or university owned the property.
Brown University and the City of Providence have sustained each other since before the American Revolution. Brown’s efforts on behalf of the city are well-known to most of you:
- students who volunteer tens of thousands of hours every year in schools and social service agencies;
- a medical school that has dramatically increased the quality of health care in our state during the last 25 years;
- more than $100 million in federal research attracted annually to the state;
- faculty and student expertise that helps the city address problems from education to environment to fiscal analysis and urban planning;
- contributions to the cultural, artistic, social and intellectual life of the city.
All of that has been underway for decades and will continue above and beyond the provisions of our new agreement. Brown also has a more direct fiscal impact on the state and city, totaling $22,225,000 in 2001-02:
- state income taxes withheld by Brown: $7,400,000;
- temporary disability insurance payments: $1,800,000;
- unemployment insurance: $335,000;
- state income taxes on indirect and induced wages: $6,000,000;
- payroll taxes on indirect and induced wages: $1,500,000;
- sales tax paid by companies doing business with Brown: $3,000,000;
- real property taxes to the city: $191,000;
- other fees and charges: $750,000;
- avoided costs for the city: $1,250,000.
Brown generates more than $400 million in total economic output for Rhode Island every year, a far greater proportional impact than most of our peer institutions have on their host states.
Throughout these negotiations with the city, we have been mindful of the University’s need to sustain its own programs, and we are aware of the special efforts that will be required to meet this new obligation.
I am very hopeful that the agreement we announced this week will accomplish the difficult goal of sustaining the University’s mission while at the same time allowing it to nurture and extend the mutually supportive relationship it has enjoyed with the city for so many years.
The successful conclusion to these questions was the result of the diligent efforts of a wide array of community leaders, staff and Corporation members. I am grateful to all of them for their hard work. Finally, I wish to express our gratitude to our colleagues at RISD, Providence College, and Johnson & Wales University for the spirit of collegiality that helped us work together to bring about this outcome.
Ruth J. Simmons