Yale Tax Bill Backers Respond

That’s the version Lemar, a New Haven state representative, told of a conversation he had with a lobbyist from Yale University, Associate Vice President for State and Federal Relations Rich Jacob. He has Jacob’s number; the two talk regularly, he said.

“I called him on his cell phone [and said], ​‘If you have concerns, let me know about them.’ … They have no interest in sitting down and working this through.” Instead, Yale is trying to kill the bill through ​“erroneous grandstanding” and ​“misrepresentation,” Lemar said.

The proposed law in question was state Senate Bill 414, which seeks to update the language in an 1834 law that granted Yale a special tax exemption to Yale (along with four other Connecticut colleges and universities) on buildings that house for-profit commercial activity generating up to $6,000 a year in ​“unrelated business income.”

Lemar told the story Thursday in the company of two other New Haven state lawmakers, a mayoral aide, a probate judge, and a union organizer on WNHH radio’s ​“Dateline New Haven.” (Yale’s Jacob did not return a request for comment by the time this story was published.)

The group arrived to defend themselves and tell their side of the story a day after Yale’s president held an unprecedented press conference along with local business leaders to blast New Haven’s elected officials for supporting SB 414. They’re ​“pursuing a political act that singles out Yale and would harm New Haven’s ability to grow its economy,” Yale President Peter Salovey declared. (Watch his remarks in the video.) Yale Vice-President Bruce Alexander accused them of ​“taking directions” from Yale’s labor unions and acting to destroy New Haven’s growing bioscience and tech economy to help a private interest group rather than the public interest.

Salovey, Alexander and company talked specifics, too. They argued that SB 414 would tax ​“academic” properties in contravention of Constitutional law. The lawmakers and advocates on ​“Dateline New Haven” Thursday insisted that the law merely spells out what kinds of ​“commercial” uses leading to ​“unrelated income,” which may not have existed back in 1834, render a building taxable under existing law.

Alexander argued that a 35-word clause in the bill would hamper research on potentially life-saving drugs and other medical breakthroughs by taxing academic buildings based on future royalties and other commercial activities conducted by separate for-profit firms that market the discoveries. That specific clause is subdivision (8) of section 12 – 81 of the 2016 supplement to Connecticut’s General Statutes, which would make a university building taxable based on ​“fees, charges or royalties for any goods designed, produced, manufactured or generated on all or any part of such real estate, provided such goods are for sale to the public and to for-profit entities.”

Thursday’s ​“Dateline” guests insisted the bill would not lead to any taxation to buildings housing academic labs and that a section of the law immediately preceding subdivision (8) makes that clear. Keyes dismissed Yale’s isolated interpretation of the clause subdivision (8) as ​“a contortion for the purposes of a press release.”

“They’re pretending that section 7 of that statute does not exist,” Lemar said. ​“Royalties get generated in a for-profit commercial facility all the time. We’re trying to clarify what happens in commercial facilities,” not university labs.

Beyond the specifics, a larger battle is clearly at stake: a new chapter in the up-and-down saga of relations between a $26 billion-endowed internationally renowned university and its host city. Both sides this week accused the other of making moves in this SB 414 to return to old ways that poison that relationship.

The Yale officials’ position was laid out in this article. On WNHH Thursday, SB 414’s supporters offered a different take on town-gown relations and on how to define ​“special interests.”

Whose ​“Air” Is It?

To Judge Keyes, Yale’s Wednesday attacks and its hard-line stance on SB 414 brings him back 40 years, when he had taken a job with New Haven’s Guida Administration after law school. The city tried at the time to tax the Yale University Press building under the 1834 law targeted in SB 414. Yale fought back in court. ​“Yale resisted with the vigor and the same fundamental press” statements it issued this week, Keyes observed.

Yale won in court. A lower-court judge ruled that the Yale Press is an education institution under the 1834 law. The state Supreme Court ruled that the Press netted less than $6,000 a year back in the 1970s. Meanwhile, the city of West Haven tried to tax Yale’s golf course — and lost in court because, the judge ruled, the 1834 law is too vague to apply, meaning that until the law is clarified, the city will have a hard time ever prevailing in an effort to tax a Yale-owned building that it feels should qualify under existing rules.

Keyes remembers then-Mayor Bart Guida’s take afterwards on the approach Yale takes to New Haven trying to negotiate how to interpret its legal special tax exemption, after leaving a meeting with then-Yale President Kingman Brewster: ​“Yale’s position is that we can share their air in New Haven.” He said that Brewster back then, like Salovey this week, argued that ​“the poor and the taxpayers of New Haven are offensive to inquire into the taxation” of Yale.

Reps. Porter and Lemar and State Sen. Gary Winfield, who ran for mayor in 2013, all said they constantly hear form constituents who feel Yale should either pay more in taxes or at least be held to the same rules for commercial property taxation as are everyday New Haveners. They hear it on their kids’ Little League field. They hear it every day they’re on the campaign trail.

“Whether it was on the Board of Aldermen or working in the mayor’s office or now in the state legislature, I cannot go a day without a constituent saying, ​‘Why doesn’t Yale get treated the same as any other entity in the state?’” Lemar said.

He and his fellow legislators added that while it merely redefines and updates existing rules rather than generating significant new tax revenue, SB 414 is popular with New Haveners.

Mayoral Chief of Staff Reyes said City Hall was startled to hear Yale officials personally attack the mayor and the State Senate President Martin Looney at the press conference over a bill that the administration views as simply clarifying rules. (He noted that Mayor Toni Harp did not support a separate labor-backed bill this session to actually seek tax revenue from Yale’s endowment; that bill died.)

Harp and Salovey, like their predecessors, have enjoyed a productive and warm working relationship.

“I’ve never seen anything like this,” Reyes, a former Board of Alders president, said Wednesday’s Yale press conference.

“We’re still trying to figure out what would lead to that kind of behavior,” Reyes said.

“I think we’ll get over this,” Reyes predicted. ​“We’ll continue to talk to each other…. I don’t think anyone is interested in undoing” the progress town and gown have made in recent years.

Labor Vs. Business ​“Special Interests”

The ​“Dateline” guests were also asked about the accusation that elected officials are fronting for self-interested unions rather than representing the public interest in supporting SB 414, which Yale’s UNITE HERE unions urged legislators to pass.

Lemar pointed out that Yale was accompanied at its press conference by the head of the Chamber of Commerce and Webster Bank. ​“When the Chamber of Commerce comes out against raising the minimum wage … or paid medical or family leave … no one accuses him of being a stooge of businesses,” Lemar said. ​“When the president of Webster Bank comes out against establishing a retirement savings plan for retired workers, no one accuses him of representing ​‘special interests.’”

Unions, too, have the right to play that same role in suggesting and weighing in on legislation that would affect the fortunes of working families they represent, he argued.

“It makes you a good legislator” to talk to all sides and consider their pitches, Winfield said. ​“Something would be wrong with me as a legislator if I said, ​‘Because it comes from a union,’” he shouldn’t listen. He said that he takes heat from listening to all sides: For instance, while he generally has a liberal voting record and supports the gun-control side of the public debate, he sided with opponents of a bill to micro-stamp firearms.

“Yale has interests. They’re bringing up the specter of ​‘the unions’” to advance those interests, Winfield said. ​“Yale doesn’t express the interest of the public. UNITE HERE doesn’t express the interest of the public. The public” does, he argued. And the ​“public” has clearly spoken in favor of measures like SB 414.

Gwen Mills has played a central role in UNITE HERE’s support of pro-labor officials’ electoral campaigns. She called it ​“a popular tactic to try to say labor unions are a narrow special interest when an institution is trying to protect their own interest.

“The reality is the union is made up of thousands of people, thousands of families that live in and around New Haven,” Mills said. What we try do is not a narrow thing. We try to work for good benefits and wages and contracts for our members that then sustain their families and their communities. We also think about the policies that impact our members, where they live, where they send their kids to school, public safety.”

“‘It’s a special interest’ — that’s an easy thing to say. The question for us is: Is it good policy? Will it improve the lives of working people?”

Click on or download the above sound file to hear the full discussion on WNHH’s ​“Dateline New Haven.”

Previous coverage of this issue:
• Yale Tax Fight Turns To Tech
• Law Profs Dispute Yale’s Tax Arguments
• Yale Threatens To Evict Symphony
• Clergy Back Bill To Clarify Special Yale Tax Exemption
• Yale Fights Back; Lemar Rips ​“Scare Tactics”