It's a funny thing. I've been telling lots of people about Yale University in recent weeks and nearly everyone has had the same reaction: "Imagine Johns Hopkins doing something like that!"
Here's the scoop: Yale University has announced that since it pays no city taxes on its academic properties, it wants to help New Haven, Connecticut, in other ways. It has established a $5 million fund to match investments by other venture-capital funds in new technology companies locating at two New Haven sites.
But that's not all.
Yale President Richard C. Levin proclaimed that Yale would give $2,000 a year for 10 years to all permanent university faculty or staff members who buy a home in New Haven this year. No strings attached -- as long as they work for Yale at least 20 hours a week and pledge to live in the houses they buy.
"We hope it will attract additional residents to the city who will be active in their neighborhoods and who will, of course, contribute as taxpayers and customers to the economic health of the city," the president said of the program.
No one has any idea how many will take the offer.
"It's a gamble. If lots of people take advantage of it, costs can mount very quickly," spokeswoman Cynthia Atwood acknowledged.
More than 3,300 of Yale's 9,400 employees live in New Haven. The tax burden there is so high it is certain to shock even heavily taxed Baltimore homeowners: The annual tax bill on a $120,000 house in New Haven is more than $5,000 -- twice as high as in Baltimore.
And the squeezing of New Haven residents does not end there. They are also taxed each year on the value of their cars, according to tax collector Salvatore Calderaro.
These kinds of extreme measures are consequences of the perilous financial straits of New Haven. It is a city of 130,000 people which, except for the famous university, has little else but slums. It is doubtful that Yale alone can save New Haven, however hard it tries.
Which brings us to Baltimore. This city has a far larger population and sounder economic base. Yet it is in trouble, just like New Haven.
Each year, more than 5,000 people -- mostly middle-class taxpayers -- move out of Baltimore. As they go, the burden hardens on the backs of the remaining property owners.
Members of the City Council have become increasingly curious about some $2 billion worth of property in Baltimore whose owners -- state and federal governments, churches, colleges and non-profit organizations -- pay no taxes. Yet many of those institutions take advantage of such city services as police and fire protection and street cleaning.
"We have to impress upon them to look at the future of Baltimore," says Councilwoman Vera Hall, who has been reviewing the situation with a number of her colleagues.
She thinks the city should go to the state and federal zTC governments asking for added "disparity grants" and "impact aid" for all the tax-free office space.
At the same time, she feels the city ought to start a "dialogue" to getthe other tax-exempt property owners to pay at least for their share of police and fire protection. (Yale voluntarily pays New Haven $1.2 million a year for fire protection).
"It's a public safety issue, as far as I'm concerned. And everybody has a responsibility," Mrs. Hall explained.
A high city official -- who declined to be identified -- said Baltimore's problem is that "we just have too damned many tax-exempts."
"We are at a point now where any future conversion of properties to tax-exempt status should have to be approved by the City Council," the official said.
In the past several years, some non-profit organizations have negotiated payments in lieu of taxes. But many do not pay anything at all.
"It's clearly something we have to look at," said Councilman Anthony J. Ambridge.
After learning about City Council ruminations, some non-profit organizations -- particularly churches -- have mounted a fierce behind-the-scenes lobbying campaign against any fees. Many argue that by employing city residents and providing social services, they are more than compensating for whatever tax losses the city is accruing.
As Baltimore tackles its fiscal problems, politicians are scrambling for more revenues. Tax-exempt property owners are
seen as an attractive target. The Yale example shows that there are ways to defuse a confrontation.
Antero Pietila writes editorials for The Baltimore Sun.