Colleges Clash with Towns over the Cost of Public Services

With increased financial pressures on municipalities across the country, as well as on places of higher learning, town-versus-gown squabbles over Pilot payments — an acronym for payments in lieu of taxes — are increasingly common and often contentious.
September 17, 2013
 

It was just about the time they were going to turn off the water that this village recognized it might have a college problem.

For years, residents have lived in symbiosis alongside two schools: the private Alfred University and Alfred State College, a part of the State University of New York system. The schools capitalize on Alfred’s small-town charms — the single stoplight, the deer wandering in the street — while the village enjoys thousands of students eating, drinking and spending at local establishments, an annual rush of revenue and revelry that arrives as autumn does.

But cleaning up after those students is less appealing, and made all the more difficult because the colleges, as nonprofit, tax-exempt entities, are under no legal requirement to pay anything for public services. A former tile-manufacturing town in western New York, Alfred has a shockingly skinny tax base: a whopping 90 percent of its assessed value is estimated to be tax-exempt.

So last year, to try to cover its costs, the village told the schools they would have to pay more for their water. SUNY balked. And that is when the village made a quiet but firm ultimatum: Pay up or go thirsty.

“It got their attention,” said Virginia Rasmussen, a Village Board member. “And we got the check.”

With increased financial pressures on municipalities across the country, as well as on places of higher learning, town-versus-gown squabbles over Pilot payments — an acronym for payments in lieu of taxes — are increasingly common and often contentious.

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