institutionalfinance

Town-Gown Dispute and New Law in Rhode Island

Rhode Island Governor Lincoln Chafee has signed legislation that could require Bryant University to reimburse the town of Smithfield for police and fire department service, The Providence Journal reported. The legislation requires that university and town officials try to negotiate an agreement. If they fail to reach a deal, the town can start charging the university on March 1. Bryant, like many private colleges, said it does not object to discussing ways to compensate the town, but that it is inappropriate for a state government to force a private, nonprofit college to pay its locality. The university, which urged Governor Chafee to veto the legislation, said it will negotiate with the town but may also consider litigation against the law.

 

Research officers warn of long-term effects of sequestration

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Research officers warn of the long-term effects of federal budget cuts earlier this year.

$19M in Spending on Building That Won't Be Built

Amherst College spent $19 million on architectural and other expenses for a planned $245 million science building that the college has now decided not to build, The Boston Globe reported. Amherst officials say that they still need and plan to find a way to build a new science facility, but that the planned building was creating too many problems. The Globe article uses the Amherst situation to discuss competing pressures on colleges as the plan the best spaces for scientists. In the Amherst case, some science professors say that the project grew more expensive and more complicated in part because of a desire for architectural details (a light filled atrium, for example) as opposed to focusing on the basic lab spaces that the professors need.

 

Senate Panel Seeks Increases in Pell Maximum and NIH Budget

A Senate subcommittee on Tuesday approved a fiscal year 2014 spending bill that supports the launch of a “Race to the Top” program focusing on college affordability and calls for a significant increase in funding for the National Institutes of Health.

The Senate Appropriations Subcommittee on Labor, Health and Human Services, and Education and Related Agencies bill set discretionary spending at $164.3 billion. The bill includes $400 million to support the Obama administration’s “Race to the Top” initiative. This is a noticeable difference from last year’s budget plan, which omitted the $1 billion the administration had requested for the initiative. The funding for the program will be an incentive for states to reduce college costs and improve academic outcomes. The subcommittee would also allocate $850 million for the TRIO programs, which help low-income, first generation college students prepare for and succeed in postsecondary education. 

The Senate’s bill would also provide $31 billion to the National Institutes of Health, an increase of $307 million from last year, to fund biomedical research. The funding would allow the NIH to allocate $40 million for the new Brain Research through Application of Innovative Neurotechnologies (BRAIN) Initiative.

Under the plan, the total maximum Pell Grant would rise by $140 to $5,785.

The House has not yet introduced its version of the appropriations bill. It is considered unlikely that the two bills will be reconciled and passed. The full appropriations committee will meet on Thursday.

Oregon plan would shift tuition payment to after graduation

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Oregon will study plan to let students forgo tuition upfront in exchange for a proportion of their wages upon graduation. Critics say it is a bad idea that will never get off the ground.

Wealthy American Universities Start to Invest in Africa

Some of the wealthiest American universities are starting to invest in Africa, seeing the potential for large gains, Reuters reported. Northwestern University, with holdings in companies in Kenya and Nigeria, recently doubled its African investments. Other large endowments investing in Africa include those of the Universities of Michigan, Notre Dame, Texas and Wisconsin. Rockefeller University is expected to make such an investment this year.

 

Questions on William Peace U. Plan to Buy Retail Center

Some alumni and others are questioning a plan by William Peace University to use two-thirds of its $33 million endowment to buy a retail center adjacent to campus, The Raleigh News & Observer reported. University officials said that the center would provide income now and could at some point in the future provide facilities for expanding the university. Others question devoting so much of the university's endowment to the project. Still others have raised questions about the university's refusal to release the names of the trustees who voted on the matter.

 

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Deans Decry 'Financial Mismanagement'

A letter from deans at Howard University decries "financial mismanagement" at the institution, including the use of "inaccurate, misleading data" to make decisions on cuts, The Washington Post reported. The deans blame Robert M. Tarola, an independent contractor is senior vice president for administration, chief financial officer and treasurer, and questioned the "fiscal direction" in which he is leading Howard. "We believe this direction places the very survival of the university at risk,” the deans wrote in the letter addressed to Howard trustees. University officials defended Tarola, and said that he has helped improve the university's financial condition.

 

Suit Challenges Princeton's Tax-Exempt Status

A New Jersey judge has refused to dismiss a suit by residents of Princeton, N.J., challenging the tax-exempt status of much property at Princeton University, The Times of Trenton reported. Like challenges to the tax-exempt status of college and university facilities elsewhere, the suit argues that some facilities are used for purposes removed from Princeton's educational missions. But the novel argument (disputed by the university) in the suit is that because of Princeton's extensive activities with patent royalty income -- and the sharing of that income with faculty members -- Princeton has become a commercial enterprise, and thus should pay taxes.

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