Allston Tax Extended To 25 Years

Some Professors Object To Flat Tax On Harvard Schools

Top University financial officials told the Faculty Council on Wednesday that the central administration will continue to tax all of Harvard’s schools to fund development of the University’s new campus in Allston—a reversal of a previous promise that this assessment would last no more than five years.

Created in early 2001 by a vote of the deans of Harvard’s faculties, the fund annually assesses each faculty one-half of one percent of its endowment.

The tax most hurts the Faculty of Arts and Sciences (FAS), since the school has by far the largest endowment payout. When it was first established, it was projected that FAS would foot 40 percent of the total bill.

Though it was originally slated to last no longer than five years, Vice President for Finance Ann E. Berman and FAS Associate Dean of Finance Cheryl Hoffman-Bray informed the council Wednesday that Harvard’s schools would see their endowments docked for up to 25 years.

“We discussed an extension of the assessment for the first phase of Allston development (25 years),” Berman wrote in an e-mail. “The fund being raised by this assessment is an infrastructure fund, and so will be used for infrastructure: land acquisitions, roads, utilities, site cleanup, buildings, et cetera.”

Berman did not respond to a question about whether the rate of the assessment would change over time.

The initial decision to establish the fund was controversial because of the tremendous disparities in endowment among the schools. While FAS controlled $7.99 billion as of June 30, 2000, the Dental School controlled a mere $124 million.

Therefore, since the tax on endowment is flat, FAS will be forced to put up significantly more cash to clean chemical spills and construct buildings in Allston than will Harvard’s other schools.

Then-dean of the Faculty Jeremy R. Knowles voted against the 2001 proposal to establish the fund.

Current Dean of the Faculty William C. Kirby said last night that he approves of the assessment’s continuation.

“This is, after all, a long-term investment for the University and for the FAS,” Kirby wrote in an e-mail. “As Dean Hoffman noted in her presentation, our budgetary plans have assumed the continuation of such a fund, and its effect on our truly discretionary income is small.”

Arnold Professor of Science William H. Bossert, who spoke against the establishment of the fund in 2001, said in an interview yesterday that Harvard would be paying more than its share to build a campus that will not provide it with equivalent returns.

“Those faculties that benefit from it should pay for it,” said Bossert. “If in fact the FAS is going reap 60 percent of

the benefits then we should pay our fair share.”

He said, however, that as other faculties would benefit more from the Allston campus, FAS would be a loser in the deal.

He added that he felt it was less than honest to use funds that might have been earmarked for other projects to go across the river.