National Association of College and University Business Officers (NACUBO) President and CEO John Walda today issued the following statement on the Senate Finance Committee consideration of the Tax Cuts and Jobs Act and its damaging effects on higher education institutions, students, and professionals.
“The Senate Finance Committee has just approved legislation that will seriously disrupt nonprofit and tax-exempt organizations across the United States. This measure diminishes the independence these entities have relied upon to serve their constituencies and meet the demands of their public purpose missions. These are organizations that help their communities thrive, from small charities to universities and cultural organizations.
NACUBO is disheartened by the sheer number of provisions in the bill that impair the ability of colleges and universities to serve students and deliver on their research and public service endeavors. It is a direct hit on higher education, and the pain will be particularly severe at colleges facing enrollment drops and public colleges where state appropriations have declined. This legislation works squarely against affordability by taking revenues previously used for scholarships and academics and directing those dollars to the federal treasury to support tax cuts.
- The proposed excise tax on college and university endowments will result in fewer dollars available for scholarships, student services, research, and college and university operating expenses.
- The changes to the taxation of unrelated business income include a new tax standard for nonprofit entities not faced in the corporate sector, and a tax on revenue streams that for large institutions can generate significant income for student aid.
- Doubling the standard deduction without creating another charitable giving incentive will have a damaging impact on gifts to colleges and universities that rely on giving to enhance their ability to provide scholarship aid and deliver on education and research expectations.
- Limiting access to the bond market will dramatically increase borrowing costs and will likely result in diminished investments in infrastructure and renovation of aging facilities. Colleges use these bonds to acquire, construct, and restore hospitals, academic buildings, residence halls, athletic facilities, research laboratories, energy plants, and more.
Collectively, these and other provisions will have adverse effects on both revenue streams and expenditures at colleges and universities, negatively impacting the students they serve and the education students are provided, as well as the professionals they employ.
NACUBO has previously stated that it supports the goal of a simplified tax system that seeks to grow the economy and helps all Americans to prosper and succeed. However, we cannot support legislation that seeks to deliberately weaken our unparalleled system of postsecondary education.”
About NACUBO: NACUBO, founded in 1962, is a nonprofit professional organization representing chief administrative and financial officers at more than 1,900 colleges and universities across the country. NACUBO's mission is to advance the economic vitality, business practices, and support of higher education institutions in pursuit of their missions.