Universities Fuel Local Economy, Report Says

In an effort to dispel the idea that tax-exempt, land-eating universities rob towns of their rightful revenue, Harvard and seven other area schools will release a report today declaring that Boston-area research universities pump more than 7.4 billion dollars into the regional economy each year.

The 102-page report, the first-ever to detail the collective, cumulative impact of educational institutions on the Boston region, says that the universities benefit the region both by directly employing area residents and by attracting the nation’s top minds, who often start successful companies locally.

“Originally, each institution wanted to present their own story, but this report is much more comprehensive—it is the collective story of eight unique institutions as a phenomenon in the Boston area,” said Mary H. Power, Harvard’s senior director of community relations.

“This is a story about these eight institutions—as purchasers, employers, and incubators—that’s never been told before,” she added. “Their collective economic strength is unmatched by any other group of universities within the nation.”

Paul S. Grogan, the author of Comeback Cities: A Blueprint for Urban Neighborhood Revival and Harvard’s former vice president for government, community and public affairs who oversaw the beginning of the report, praised the results yesterday.


“These universities have a staggering impact on the greater Boston area, and this report is an attempt to show that influence,” said Grogan, who is currently the president of the Boston Foundation, a charity group.

The study, entitled “Engines of Economic Growth,” reports that these eight research universities—Harvard, Boston College, Boston University, MIT, University of Massachusetts at Boston, Brandeis, Northeastern and Tufts—are particularly vital in helping the region’s economy recover from the recession.

“The report is an emphasis that in a world where knowledge is power, not only the huge businesses are generating huge revenues,” Grogan said.

Historically, Harvard has had a strife-filled relationship with the City of Cambridge. One major source of tension is Harvard’s payment in lieu of taxes (PILOT)—which currently amounts to about $1.5 million annually.

But the University maintains its tax-exempt status on land holdings that would otherwise generate $35 million in tax revenues per year.

State representative and city councillor Timothy P. Toomey Jr. calls Harvard’s PILOT payments “woefully inadequate” and hopes that the recently-released report will provide some explanations.

“I understand that Harvard provides the city with other economic benefits besides this tax money, but they could clearly contribute more than they have in the past,” he said.

Toomey added that he and other Cambridge City Council members hope the report is as comprehensive as many have promised.

“We are very interested in who is directly involved with the report and how exactly the data was collected and where from,” he said.

Grogan says this report will lend some credence to the notion that Harvard and other area universities have positive effects on the region.