Universities have a commitment not only to learning and scholarship, but also to their local communities.  When these two obligations clash, how does an institution like Yale cope?

Poison Ivy: The Problem of Tax Exemption in a Deindustrializing City, Yale and New Haven, 1967-1973

Nikolas Bowie

Yale University

Abstract

This paper addresses the question of what the role of a tax-exempt university has been in a deindustrializing city, and how the university has conceived of its responsibilities as an “institutional/corporate citizen” when confronting the need to expand. In 1973, Yale University attempted to build two new residential colleges, but the New Haven city council vetoed construction on the grounds that such expansion would deprive the city of needed tax revenue. This fight was well recorded in Yale president Kingman Brewster’s archives, which also reveal how Yale saw its conflicting responsibilities towards the nation and towards the city.

On a brisk, November afternoon in 1968, John Ecklund, treasurer of Yale University, walked into New Haven Alderman Bartholomew Guida’s office to meet the upstart legislator for the first time. Ecklund, one of the many self-described Protestant “patricians” on Yale President Kingman Brewster’s staff, was already close to many of the Ivy-educated administrators working for the city. Indeed, Yale’s Office of the Treasury had formed an intimate working relationship with Mayor Richard Lee’s Redevelopment Agency, and in 1961, both had partnered to seek several million dollars in federal funds to assist Yale’s construction of two new residential colleges on the site of several old high schools.[1] But Ecklund was not friends with Guida, who himself was anything but a patrician. A lower-middle class Italian-American Catholic who had lived in New Haven all of his life, Guida’s political rhetoric had centered around “sticking it” to Yale, the tax-exempt university whose history in New Haven was as well-established as its trustees’ bloodlines. In 1967, Guida had gone so far as to propose an amendment to New Haven’s zoning ordinance to ensure that New Haven’s institutions of higher education would “not gobble up taxable property and convert it to a nontaxable use.”[2] So in 1968, as the university was again considering further expansion to prepare for the possible admission of women, President Brewster dispatched Ecklund to meet with Guida, the Board of Alderman’s most visible critic of Yale.

            This meeting was succinct. “If the University decided to ‘take’ twenty acres for a girls’ college between Temple and Church Streets,” Guida said, “this would be a very serious matter for the City of New Haven. It would be entirely fair for the Board of Aldermen to see the plans for this and consider the question.” And while Guida spoke highly of “the bright young men with planning training employed by the Redevelopment Agency,” Ecklund reported, “their ideas, although possibly very good for planning a new city on vacant land in Arizona, were not good for a city which is 300 years old and doesn’t want to be torn apart.”[3]

That 1968 exchange was one of the first in a series of engagements between Yale and the City of New Haven that culminated in outright political war. Yale would indeed seek land for new residential colleges, but in 1973, the Board of Aldermen would reject Yale’s proposal. The Board’s motive was fixing New Haven’s tax structure. Throughout its history, the state of Connecticut had allowed its municipalities to collect only property taxes for revenue. As New Haven’s industrial base moved to the suburbs in the late 1960s to escape the city’s high tax rates, however, the city government increasingly looked towards Yale’s tax-exempt endowment and property for remedies. Yale’s administration even agreed that the state’s property tax system was inherently inequitable, but the university left New Haven’s taxpayers to subsidize an institution whose exemption was granted by suburban state legislators.

As the largest property owner in the city after the municipal government, the University acknowledged that it had a civic responsibility as an “institutional citizen” to contribute to the welfare of its host city. But a confluence of detrimental economic conditions in the late 1960s pressured Yale to increase its revenue and compelled the state of Connecticut to recruit capital investment in its suburbs. Yale and the state therefore pursued their respective interests at New Haven’s expense: Yale wanted to earn the revenue it needed by expanding, while the resulting increase in municipal taxes and services—paid for by the urban residents who could not afford to move—would push urban industries towards Connecticut’s suburbs. The city would be left with no recourse but to subsidize its own deindustrialization. So in 1969, when the New Haven Board of Aldermen passed the so-called Guida Amendment that prevented Yale from expanding without aldermanic approval, and in 1973, when the Board followed by voting to reject Yale’s proposal to construct two new residential colleges near New Haven’s Whitney-Grove Business District, the city was not simply responding to concerns over the specifics of the two colleges. More generally, the city was reasserting its authority over its own capital controls to slow a process of suburbanization that the state was already facilitating.

*          *          *

The history of Yale’s engagement with the city of New Haven stretches back two hundred years before Bart Guida met with John Ecklund, as Yale’s unique position as a nationally oriented, publicly subsidized institution had long created a disjuncture between its international reputation and its civic responsibility of contributing to the welfare of its local environment. Despite its private management, Yale was born a public university. From the date of its incorporation in 1745, Yale enjoyed special tax exemptions, and until the twentieth century its most important source of revenue for the school was state legislative grants.[4] Before the nineteenth century, in fact, many New Haven residents regarded Yale as a blessing. Unlike Harvard, many of Yale’s students were the children of farmers who could not expect to inherit family farms, and for the first century of Yale’s existence, between 74 and 94 percent of each year’s class came from the surrounding area and other parts of Connecticut.[5] Even the students who were not from New Haven contributed to the benefits Yale provided the town, as many undergraduates obtained room and board in private rented quarters. Yale was the only non-municipal and non-ecclesiastical corporation in the entire colony, and the colonial legislature singled it out with special privileges, including tax exemption, for its public service.[6] Although this cost Connecticut several thousand dollars in revenue, state and municipal governments in the eighteenth century were not expected to provide many public services anyway, so the loss did not affect many of the colony’s citizens. 

            Through the nineteenth century, however, the benefits Yale provided New Haven became less easily discernable. Despite the rapid growth of New Haven’s population during the Industrial Revolution, by 1820, less than 60 percent of Yale’s students came from Connecticut, and by 1850 this figure dropped to 30 percent. As historian Peter Dobkin Hall writes, “Over the course of the 19th century, as more students came from out of town and out of state, and were steadily less willing to stay in the state, the public extending the tax subsidy was increasingly less likely to be the public benefiting from it.”[7] 

During this time, Yale remained physically small; most of the faculty lived in the city limits, and Yale’s students still patronized boarding houses and restaurants. But in 1898, in an action that inaugurated many of the thematic disagreements that would reemerge in 1967, the University decided to use alumni donations to expand its dormitory and dining hall operations, threatening one of the main benefits Yale still provided the city. To preempt this expansion, New Haven’s tax assessor challenged Yale’s exemption on its already existing dining halls and dormitories in a case that went to the Connecticut Supreme Court in 1899.[8] 

Attorneys for the city argued that Yale’s dining halls and dormitories competed with local businesses and earned revenue for the university. They also contended that the operations raised the cost of attending the university, excluding the relatively poor New Haven residents from attending. Yale, in turn, argued that once land was used for the public good, any income it provided was simply an ancillary investment in the public service Yale offered.[9] “The reason for treating this institution in an exceptional manner is that it contributes to the welfare of the State,” Yale’s lawyers argued. “Its function is largely a public function. Its work is done primarily, indeed, for individuals, but ultimately for the public good.”[10] Furthermore, the lawyers said, even if Yale provided no direct public service to its neighbors, Yale’s presence alone brought business and investment to New Haven that would not otherwise exist. Such an argument was repeated often over the course of the next century, such as when one 1972 Yale student asked, “What would New Haven be without Yale, another Bridgeport?”[11] 

Echoing another theme that would become familiar, in 1899 the Connecticut Supreme Court adopted Yale’s argument wholesale.[12] After the decision, Yale began a massive capital campaign and expansionary binge that continued through the Depression. Yale quickly grew from its 1834-era eight acres with endowment funds aggregating less than $100,000 to property worth more than $10.4 million by 1911.[13] In 1915, this figure climbed to $12.2 million, and by 1936, Yale’s property values ballooned to $67.1 million, representing almost eight percent of New Haven’s total area.[14] Much of Yale’s expansion, especially after it inaugurated its residential college system in 1933, was in New Haven’s downtown business district, which actually began to shift southeast to accommodate Yale’s purchases.[15] Yet with an endowment growing towards $100 million by 1937, Yale’s expansion was not close to finished—even in the middle of the Depression. In one contemporary joke, which referenced the inscription on New Haven’s Grove Street Cemetery that read, “The Dead Shall Be Raised,” a Yale dean supposedly looked at the sign and remarked, “They certainly will be ‘raised’ whenever Yale needs the space for new buildings.”[16]

As early as the 1930s, therefore, it was clear to many New Haven residents that Yale’s expansion would threaten the future of New Haven’s tax base, especially if the city remained tied to property taxes. Anticipating Bart Guida’s campaign, in 1937 the mayor, city tax assessor and aldermanic president wrote a public letter to Yale, admitting “that the value of university buildings is far greater than the value of any that they may have replaced and in excess of the value of any that might have been erected there if Yale were not there,” and that a few residents did benefit from Yale’s services that were open to the public, such as Woolsey Hall and Sterling Memorial Library. But, the officials argued, “We submit that if Yale were not here, this land would probably be occupied by taxable buildings and the land would be taxable.” They concluded by pointing out that the number of residents who patronized Yale’s services “represent but a very small proportion of the people of this city who feel that their tax bill is increased by the presence of the university in this city. They are continually requesting city officials to obtain relief from the burden which they claim the Yale tax exemption places upon them.”[17] 

This search for relief took many forms over the next forty years, but never came. It was largely abandoned in the 1940s and 1950s, when New Haven boomed thanks to its large weapons manufacturing sector. After the Korean War ended, however, these large manufacturers began relocating their operations to Connecticut’s suburbs, where tax rates were much lower. Between 1964 and 1974, manufacturers razed 44 buildings in downtown New Haven. Despite an influx of immigrants from Europe and black migrants from the South during World War II, the proportion of New Haven residents employed in manufacturing declined from 50 percent in 1950 to 31 percent in 1960 and to only 25 percent in 1971.[18] The city was dealt its most devastating blow in 1965 when Winchester Repeating Arms Co., the largest employer in New Haven, decided to move its main production lines to its secondary plant in East Alton, Illinois.[19] 

Even though the city and state subsidized Yale during its critical formative years, in the twentieth century Yale began to think of itself as a private institution meant to serve the entire nation—independent of its geographic commitments. Yale continued to expand as New Haven deindustrialized, and some city officials even helped secure the university with federal and municipal aid. Beginning in 1955, newly elected Mayor Richard Lee authorized the creation of a Redevelopment Agency, which solicited federal monies for highway construction, urban renewal and slum clearance projects that often took the form of new Yale property. Yale’s art gallery (1957), ice rink (1957), Morse and Stiles colleges (1962), Art and Architecture Building (1963), and Beinecke Rare Book Library (1963) were all constructed with aid from New Haven and the federal government. Mayor Lee believed the side effects of Yale’s growth and the transition of New Haven’s industry to a service economy would save his “dying” city, and after Lyndon Johnson became president in 1963, Johnson even designated New Haven as the prototype for his new “Model Cities Program” to receive federal grants and subsidies.[20] 

Yet when Richard Nixon was elected president in 1968, these subsidies dramatically declined, and the state of Connecticut refused to compensate New Haven for the tax revenue it lost to Yale’s expansion. In fact, Republican Governor Thomas Meskill actively wooed industry and capital to Connecticut’s tax-friendly suburbs.[21] The exempt portion of New Haven’s grand list of taxable property increased from 27 percent in 1950 to 44 percent in 1970. [22] Moreover, race riots plagued the city in the summers of 1967 and 1969, and unemployment due to manufacturing job cuts remained high. Many New Haven residents blamed the city’s financial problems on the university’s unrelenting tax-exempt expansion. In this context, in 1967, Alderman Bartholomew Guida proposed an amendment to New Haven’s zoning ordinance to restrict any future expansion by Yale or any other tax-exempt university.

*          *          *

Bart Guida was a quiet but influential politician. A New Haven native and son of a career Democratic Party worker, Guida was elected alderman seven times,[23] and by November 1968 he had positioned himself to become president of the Board of Alderman.[24] Guida also was very close with Arthur T. Barbieri, the Democratic Town Committee chairman who dominated the coalition of Italian, Irish, Jewish, and “patrician” politicians that composed New Haven’s one-party government. Barbieri had worked closely with Lee in the 1950s to assemble this broad ethnic and working-class coalition that broke the longstanding feud between New Haven’s Democratic-leaning Irish and Republican-leaning Italian populations.[25] According to historian Douglas Rae, Barbieri was so successful that when his chosen candidate Guida successfully ran for mayor in 1969, “A half-serious joke from the period held that Barbieri had bragged of his own power to make anyone mayor, and set out to prove the point with Guida’s candidacy.”[26] 

On October 2, 1967, Guida proposed an ordinance to repeal the parts of New Haven’s 1963 zoning ordinances that permitted all uses of land by public and private colleges and universities. Guida hoped to replace these clauses with amendments that required “A Special Permit…subject to the approval of a two-thirds (2/3) vote of the Board of Alderman…for the expansion of any such institutions and/or connected uses in existence at the effective date hereof.”[27] His intent was to apply aldermanic oversight to Yale’s rapid expansion; even though Yale had cooperated with New Haven’s Redevelopment Agency and City Plan Commission for years, Guida and many of his colleagues saw these agencies as Yale-controlled. As Barbieri told Yale’s treasurer in a meeting, “the simple truth is that the Board of Aldermen do not trust the City Plan Commission…the City Plan Commission on too many occasions has lied…to the Board of the Alderman.”[28] Guida wanted to reassert control over the institutions he believed were “gobbling up” taxable property.[29]

Representatives of Yale University, along with three other New Haven schools, vociferously attacked the proposed amendments as “standardless,” contrary to “good zoning practice,” and most importantly, “illegal.” In a letter to the City Plan Commission, the representatives argued that “The purpose of the Amendments is to enable such growth [of New Haven’s four colleges] to be blocked altogether by political means when desired for political purposes,” in contrast with the fair zoning practices that existed already. Not only did the amendments violate fundamental state policy, the representatives argued, but they were unconstitutional as well. “The ‘equal protection of the laws’ is guaranteed to New Haven’s Four Colleges, as it is to all citizens, by the Fourteenth Amendment of the United States Constitution…The Amendments would violate these Constitution[al] guarantees,” they wrote. Referencing relevant Connecticut Supreme Court cases, the representatives wrote that New Haven had no right to treat institutions of higher education differently than any other public service:

“The amendments classify New Haven’s Four Colleges separately from elementary and secondary schools, private and public, although there is no fair basis whatever for such discrimination. Beyond this, they classify New Haven’s Four Colleges separately from churches, synagogues, hospitals, community centers, and other beneficial nonprofit activities to which the policy of nontaxation extends. This discrimination, proposed by the Amendments, is arbitrary and unreasonable, and is therefore unconstitutional.”[30]

This argument presumed that Yale and New Haven’s colleges were “institutional citizens” who provided a similar public service to the city of New Haven as hospitals or churches—a presumption with which Guida and his allies explicitly disagreed.

            In a public hearing before the City Plan Commission on February 19, 1968, Guida defended his proposed “Guida Amendment,” arguing that there seemed “to be little reason why the citizens of New Haven should be obliged to support Yale University through additional tax payments.” He acknowledged “the great public interest in quality education,” but contended there was “a greater public interest in community financial stability.”[31] Nevertheless, the City Plan Commission advised the Board of Aldermen to table the amendment, citing “critical legal defects”: “Nowhere in the proposed ordinance are any standards set up to guide the Board of Aldermen in these matters so that it operates under uniform rules….the absence of standards is alone sufficient to settle the question of legality or illegality.”[32] The Commission did, however, encourage the city to further investigate the fiscal relationship between Yale and the city of New Haven, noting, “While colleges and universities make many contributions to the life of the community, their development programs can create difficult problems for the City, such as the impact upon residential neighborhoods, commercial districts, transportation, and the City’s tax base.”[33] Accordingly, on June 3, the ordinance was tabled and revised, and on October 9, one month before Guida met with Yale’s treasurer for the first time, the revised ordinance was referred back to the Committee on Legislation.[34] 

            The contest between Guida and Yale became increasingly urgent as Yale faced a “financial crisis” of its own: one of its first budget deficits in the university’s history. Yale had prospered even during the Great Depression, building its first nine residential colleges in the 1930s, but by 1968, the University was spending almost one million dollars more than it earned. Even though Yale’s 1968 endowment of $545.7 million was the highest in its history, as a service institution whose costs primarily came in the form of wages and services, the University was particularly vulnerable to inflation. Increasing expenses during the late 1960s dramatically outpaced Yale’s revenue, which actually declined in 1969 and 1970 because of fewer alumni contributions. Alumni “recoiled” in reaction to Kingman Brewster’s controversial proposals to reduce legacy admissions and admit women to increase revenue and compete with its archrival, the co-educational Harvard.[35] Then, in April 1970, “alumni outrage exploded” in reaction to Brewster’s statements perceived as sympathetic to the Black Panthers then on trial in New Haven.[36] To compensate, Yale cut back on costs, dropping almost two hundred faculty positions. The university also experimented with new forms of revenue, preparing to increase its student body by admitting women.[37] With fewer professors and more students, however, complaints of overcrowding and too few resources plagued the university.

A potential solution for this crisis came in the form of two new residential colleges that could relieve overcrowding and allow Yale to generate more revenue through tuition. Many male students and alumni worried that proposals of coeducation without increasing the size of Yale’s campus would lead to the annual admission of fewer than the “magic number” of 1000 male leaders “required” for Yale to function. “More girls means fewer boys,” one Yale Daily News reporter wrote, “which in turn puts pressure on a few documented male strongholds, such as the football field and the fields of science and engineering. But the addition of two new colleges could take care of this problem quite nicely. With enough girls and boys to go around, everyone would be happy.”[38] Indeed, as another YDN article reported in 1973, the idea of using two additional residential colleges to house more students “must be viewed as [an effort] to generate new sources of income.”[39] 

            Unfortunately for Yale, New Haven was also looking for new sources of income. Facing a severe budget deficit in November 1968, five months after the Commission meeting, Alderman Guida met with John Ecklund, Yale’s treasurer, to discuss how the Board of Aldermen could cooperate with Yale to address both institutions’ financial problems. “Yale need have no fear of the Board of Aldermen,” Guida told Ecklund. “In exercising the powers under the Ordinance, [we] wished only to be entirely reasonable…anything reasonable that Yale wanted to do would be approved.” Ecklund, meanwhile, argued that New Haven’s financial well being depended on the continued eminence of Yale. Without a “very large” financial gift or cooperation from the city, Yale could not afford to purchase any new taxable property to house women, which in turn would decrease Yale’s ability to contribute to the city. “Yale is a great help to New Haven now, but if the general opinion of the country were that ‘Yale is slipping,’” Ecklund reported, “this would not at all be the case.”[40]

In the meeting, Ecklund tried to mollify Guida’s worry that Yale would expand at the city’s expense, telling the alderman, “Yale cannot ‘take’ land…Yale has to buy it, and [you] would be familiar with the fact that people [are] not averse to asking high prices of Yale.”[41] As Ecklund spoke, however, Yale was, in fact, furtively preparing to receive a “very large” gift to expand its student body and compensate for declining revenue. To avoid paying the artificially inflated prices developers expected of Yale, the treasury office had set up a front company, WTG Inc., to purchase land near New Haven’s rundown Whitney-Grove Business District. “When dealing with high-priced property, it is wise to keep your activities private,” explained Spencer Miller, associate treasurer of the University, to the Yale Daily News in 1972. “Yale is especially vulnerable when the seller knows we need a particular piece of land.”[42] Later that year, a wealthy benefactor, John Hay Whitney, donated $15 million for the express purpose of housing women. “With the aftermath of the admission of women and the subsequent overcrowding,” President Kingman Brewster later explained, “Mr. Whitney wanted to ensure that Yale could still count on the college system.”[43] When John Hay Whitney’s gift to the University was made public in the fall of 1970, Yale recognized that it faced an uphill battle in convincing the city legislature to approve the construction of its two new residential colleges. Indeed, members the Board of Aldermen passed a revised version of the Guida Amendment that gave the aldermen authority to reject new construction by New Haven’s universities,[44] and bluntly told Yale representatives that they would reject all expansion proposals until Yale was willing to pay the city payments in lieu of taxes.[45] Even worse for Yale, Bartholomew Guida was also elected New Haven’s mayor that fall.[46] In one of the final acts of his administration, Mayor Richard Lee created the Tax Exempt Property Study Commission to research the effects of Yale’s tax exemption on New Haven’s budget.[47] Kingman Brewster responded by authorizing Yale’s own committee to study the effect of Yale’s tax exemption on the city of New Haven.

*          *          *

“Predictably,” Yale’s secretary of town-gown relations, Henry “Sam” Chauncey, wrote in 1976, “the [studies] resulted in Yale calculating that it did more for New Haven than New Haven provided for Yale, and the City feeling that the reverse was true.”[48] In its own study, Yale’s economists used three arguments to justify both Yale’s tax exemption and its refusal to pay the city payments in lieu of taxes for the residential colleges. First, they argued, Yale and other tax exempt institutions provided services that would otherwise be provided publicly and financed through taxation. Thanks to Yale, all New Haven residents had free access to world-class libraries, museums, and art galleries, and Yale’s post-secondary educational programs, mental health programs, and day care centers constituted direct public services often provided by state governments. “It could certainly be argued that in Yale’s absence the city would not necessarily provide all the services Yale currently provides,” the authors wrote. But “at a minimum, it seems highly probable that if Yale were not in the community, the city of New Haven would have to spend a good deal more than it now does on health, education, and day care services.”[49] 

Second, these public services, which the economists accounted at a value of $4.5 million annually, came at “a total cost in excess of any seemingly defensible tax assessment that might be placed on the university.” While Yale did consume city services such as fire protection and sewage, these represented a very low cost for the city: slightly over 1 percent of the city’s total budget and less than 6 percent of the cost to the city of all identifiable direct services.[50] 

Third, and most important, the economists argued, the problems caused by Yale’s tax exemption had less to do with Yale itself than with Connecticut’s tax policies. “The state government, and not the city government, is the prime beneficiary” of Yale’s public services, yet the state did not pay New Haven anything for the municipality’s subsidization of Yale’s exemption. Instead, government immunity from property taxation had actually led to an oversupply of public capital facilities in New Haven, meaning that the numerous state agencies with buildings in New Haven represented an even bigger threat to the city’s tax base than Yale. So not only were New Haven residents footing the bill for Yale’s exemption, they argued, but, more generally, they were subsidizing state activities that Connecticut’s suburban residents did not have to pay for.

            New Haven’s Tax Exempt Property Student Commission, led by a team of University of Connecticut law professors, in some respects agreed with this conclusion, noting that “The failure of the city’s revenue system to generate adequate funds is due, in part, to the availability of only one substantially productive tax—the property tax. In addition, the base on which that tax is levied is substantially diminished by the exemption of large amounts of property by state statute.”[51] But even if one assumed that Yale did provide direct public services to the residents of New Haven, they wrote, the city’s fiscal load was unfair. “While it may be true that certain activities should be tax-exempt because they provide public benefits, this does not justify the current Connecticut practice of placing the entire burden of those exemptions on only one of the localities they serve.”[52] Residents of New Haven’s suburbs who benefitted from Yale’s presence without subsidizing Yale’s tax exemption were essentially throwing “the burden of its public protection and the support of its employees wholly on the citizens who happen[ed] to reside nearest to it.”[53] Yale’s tax exemption was unjust, the commission concluded, but “rather than attempting to use the coercive force of the law to exact taxes from tax-exempt organizations in the city,” the mayor and others should petition Yale and Connecticut to make payments in lieu of taxes to municipalities to compensate them for their lost revenue.[54] “We do urge the City to the extent it suggests legislative reform of the exemption system, to seek the most equitable system possible. That goal is not inconsistent with, and in some cases it is coterminous with, the goal of higher revenue.”[55]

            Accordingly, Guida, Barbieri, and other New Haven representatives petitioned the state for comprehensive tax reform, but met stiff resistance from suburban legislators. In 1969, for example, when House Democrats proposed a state personal income and payroll tax to mitigate cities’ dependence on property taxation, the state’s manufacturing interests brought “unconscionable pressure” on House leaders to have the proposals killed.[56] In 1971, Guida coauthored six different bills to be introduced to the State Committee on Finance, ranging from reimbursing municipalities for tax exempt organizations to allowing municipalities to tax nonresident users of exempt institutions.[57] Guida also kept his gaze turned toward Yale, writing in a letter to New Haven’s Democratic residents, “I have started the battle and will continue this fight to make Yale pay their fair share for the services we render them. This can and will be accomplished through my personal perseverance.”[58] In a 1971 letter to Kingman Brewster, Guida explicitly charged the University with benefiting nonresidents of New Haven more than the people who were subsidizing the school and asked the President to join his “broad base support” for a program “to accomplish a more equitable distribution of the tax burden.”[59] After a meeting with the President and other members of the Yale Corporation that October, Guida and the University even agreed to cooperate to petition for legislative tax reform. “With your help,” Guida wrote, “this can be a landmark in achieving a more equitable society.”[60]

            Despite these agreements, however, Guida was not supportive of Yale’s attempt to build two new residential colleges in the fall of 1972. Yale had purchased the land for the colleges in the late 1960s on the corner of Whitney Ave and Grove Street, a relatively rundown neighborhood between Yale’s Timothy Dwight College and one of New Haven’s business districts. In September 1972, Yale announced its planned designs for the colleges: two massive brick towers with wall-length glass windows and elevated Astroturf courtyards.[61]  In planning the colleges, Yale had worked closely with the City Plan Commission, making several key concessions, including a taxable commercial arcade on the colleges’ street side.[62] Yet at a December meeting with the commission to discuss the final design, the commission complained that the proposed amount of commercial space, parking places, and delivery room were inadequate to maintain the taxable base over the entire site.[63] The commission therefore recommended to the Board of Aldermen that they reject Yale’s proposals if they did not change before the scheduled hearing in March.

            Yale went forward with its proposal in 1973 knowing that the tax issue alone did not constitute sufficient legal grounds for a denial of a zoning charge.[64] Yet the Board of Aldermen, in a crafty strategic maneuver, subverted this legal obstacle by publically objecting not to Yale’s tax exemptions, but to superficial issues concerning the colleges’ layout and aesthetics. “The only indication I have [about the aldermen’s position] is that parking is a major problem,” the special assistant to Yale’s president told reporters in February.[65]

            Yet at the last minute, days before the scheduled March 5 vote, Yale agreed to allow the city to tax the land under the proposed residential colleges—but not the buildings themselves—demonstrating the hidden relevance of the tax problem. This was a precedent-shattering agreement, but also one in a series of concessions by Yale since Guida had been elected mayor. From March 1970 to 1972, the city had added more than $4 million in Yale properties to its grand list of taxable property, including the Yale University Press, the Yale Golf Course, and the Ingalls ice rink.[66] Yale also claimed the Whitney-Grove area, once developed, would provide an increase in tax yield of over 50 percent its present value and generate over $500,000 annually from the new students in the area.[67]

            Nevertheless, at the March 5 vote, the New Haven Board of Alderman rejected Yale’s plan by a vote of 15-10. Many aldermen took the vote as an opportunity to air their grievances about Yale’s policy towards the city. One city official afterwards told reporters, “There was an air of the battle. Even if Yale had made major concessions along the way, the sentiment to ‘get Yale’ was very strong at the highest levels of the city administration.”[68] Edward Piazza, an alderman who rejected the plan, rejoiced, “We will no longer be subservient to Yale’s high-handed methods and pressure,”[69] and asserted that Yale’s concession on the tax issue was inadequate so long as Yale did not also pay for property taxes and city services on its existing property.[70] Fred Wilson, a black alderman, argued in defense of his negative vote that “the question is whether poor working people will continue to subsidize rich kids for their education.”[71] And even some Yale students agreed that the aldermen’s rejection of Yale’s expansion on principle was honorable. “Well, the unthinkable has finally happened,” one student editorialized in the YDN. “Yale has been brought to an abrupt halt in its seemingly inexorable campaign to bury New Haven in ivy.”[72]

            Many aldermen encouraged Yale to amend and resubmit its proposal before the final deadline of mid-April, but it was clear that the city wanted more from Yale than just better-looking colleges. Alderman Edward Rubino, who had cited design problems in his opposition to the colleges, told reporters that he and many of his fellow aldermen were not satisfied with Yale’s position on paying for the cost of city services. “I personally would look much more kindly on the whole situation if they (Yale) made an offer to the city to pay their fair share on sewerage,” he said.[73] LeRoy Jones, Mayor Guida’s top aide, even suggested that an arbitrarily computed annual donation of $500,000 for city services would lead to a quick resolution. But while Yale President Kingman Brewster agreed to support state legislation that would provide a formula whereby cities could levy such service charges on tax-exempt institutions, he worried about the dangerous precedent of making “an extra-legal lump sum payment to the city in order to gain aldermanic approval.”[74] Brewster argued Yale would be happy to pay for city services, but only after a state mandate provided standards. As Alderman Stuart Miller, an ally of the University, told reporters, “I don’t think there are any aldermen opposed to the two colleges; they just want to shake Yale down for more money.”[75]

            So when Yale resubmitted its unchanged proposal in April, the aldermen again rejected it, this time by a vote of 17-12. Yale’s allies thought it was “blatantly obvious” that the city was holding out for more money, “whether Yale wants to call it taxes or something else.”[76] Yet Yale also began to publicly recognize the role it had to play in New Haven politics if it ever wanted the support of its aldermen in the future. New Haven “depends not only on its citizens, but also upon the regard with which it is held by its privileged University citizens,” Kingman Brewster told listeners at the Park Plaza Hotel, days after the vote.[77] Yale began looking to house its growing student body with private boarders, such as the Holiday Inn and the Taft Hotel, which would benefit local businesses.[78] And even though the University continued to oppose state bills proposed by Mayor Guida that would force it to pay property taxes or for “standby services” such as fire protection, Yale officials developed a new attitude towards New Haven in the years after the residential college controversy.[79] As Sam Chauncey reflected in 1976, “Yale has not been as good an institutional citizen of New Haven as it might be,” but “it is in Yale’s self-interest to be a good institutional citizen.” Otherwise, Yale might “be surrounded by a ghetto.”[80]

            Yale’s shifting institutional stance towards New Haven effectively undermined the “stick it to Yale” posturing of Bart Guida and his allies, and Yale finally began to cooperate with the city to petition the state for redress. In 1975, Guida was handed a series of political defeats when the Connecticut Superior Court declared the Guida Amendment illegal,[81] the owner of the Winchester Arms company moved its remaining gun plant out of New Haven,[82] and Guida lost a narrow primary to the pro-Yale alderman Frank Logue. Logue, who had run on a platform of establishing free trade zones in the land around the New Haven harbor,[83] was much less hostile to Yale than Guida had been, and his administration worked with Yale officials to petition the state for PILOTs to reimburse cities for university tax exemptions. Sam Chauncey also hoped to enlist the business community in Yale’s cooperation with the city, privately writing that “if Yale can find a way to be a partner in economic development, it could channel its own resources into a program over which it would have some supervision, rather than just putting dollars into a City exchequer where the decisions as to how it might be used could be disputed.”[84] For the next three years, Logue led a series of meetings with representatives of tax-exempt institutions from around the state to generate support for his bill. Kingman Brewster, for his part, met with legislators in the state finance committee such as Yale alum and state senator Joseph Lieberman.[85] In 1978, under intense pressure by urban legislators, labor groups, and nonprofit officials, the state legislature finally passed the College and Hospital PILOT Program, which planned to reimburse cities for 25 percent of the value of their nonprofit tax exemptions.[86] Unfortunately, however, the legislature did not make the necessary appropriations to cover this commitment, and in 1982, when New Haven was due to receive $5.2 million from the state, it actually received only $3.2 million.[87]

*          *          *

Connecticut’s 1978 legislation demonstrated that the state of Connecticut, once pressured, was willing to take at least some responsibility for the problems of its citizens. It also demonstrated that Yale and New Haven could work together around a common issue—fixing Connecticut’s inequitable tax structure—when it became necessary to cooperate. But the legislation also brings to question why Yale and New Haven did not cooperate in 1971 when Bart Guida first proposed such legislation, and why instead the city and university scrapped for two years as Yale tried to construct two new residential colleges.

            As a university in an imagined landscape of virtual seclusion from its immediate municipal responsibilities, Yale considered itself part of both New Haven and a larger, more important Ivy-League neighborhood, in which it constantly competed for students and revenue. More than anything, Yale did not want to be caught “slipping,” and the university was determined to ensure that its quest for glory would continue to be publicly subsidized.  So when presented with a dilemma with its residential colleges in 1972—fight the city, or set a precedent for paying the city “extra-legal” lump sums for redevelopment projects that would be out of Yale’s control—Yale took the former option, arguing that it needed to expand to fulfill its role as a national educational leader and would not be extorted by city leaders.

            From New Haven’s perspective, however, Yale’s national pre-eminence came at the cost of its civic responsibilities. Bart Guida truly believed that the massive fiscal problems faced by his city government and the taxpayers of New Haven “must be laid at the conscience of the governing body of Yale University,” and he demanded that someone, be it Yale or Connecticut’s legislature, take responsibility for the state’s inequitable tax system.[88] Guida’s forcefulness put Yale in a position where it had to argue that its public responsibility to the state was more important than its civic responsibilities to New Haven, even though these two responsibilities were never irreconcilable. Indeed, throughout the fight, both Yale and New Haven recognized that the city was subsidizing a state institution that primarily benefitted nonresidents of New Haven, so if Yale could not afford to pay taxes, the state was the real source of the town-gown conflict.

            The conflict over the residential colleges thereby showed that despite the fact that Yale and New Haven were natural allies in favor of a more equitable tax system, Yale and Connecticut were more effective allies in fulfilling the direct needs of the university and the state. To meet its own financial crisis, Yale needed to expand to appeal to its alumni and male student body, while legislators in the state of Connecticut wanted to appease their own manufacturing patrons who favored low suburban taxes. So long as the city government lacked the power to control its own tax rates, therefore, the state and university could force the city to subsidize their own capital gains. The residential college conflict must therefore be looked at as an attempt by New Haven to reassert its authority over its own economy, rather than a simple fight over the residential colleges’ architectural designs.

            The solution that Yale and New Haven came up with—state PILOTs—thus did not represent a shift in the balance of university, state, and municipal power as much as a continued assertion of state and university power over cities, relaxed to provide cities with a minimum standard of revenue. Yale never planned to give the city free reign to plan its own redevelopment. Nor was it interested in partnering with the city to promote both municipal prosperity and university growth. Throughout the history of redevelopment in New Haven, Yale administrators insisted on playing a controlling rather than collaborative role. As Sam Chauncey wrote in 1976, Yale wanted to maintain its supervision over the course of future urban renewal. Indeed, once Yale began its own PILOT program to the city in the early 1990s, Yale sponsored redevelopment programs that directly benefited the university, turning the Whitney-Grove site, for example, into a strip of arts and food establishments that could be patronized by students and Yale administrators. The state of Connecticut, meanwhile, used its PILOT legislation as a mere guideline to decide how much money it would grant cities every year. As demonstrated in 1982, the state paid its cities far less than the amount of money cities lose by subsidizing the state’s tax exempt institutions.

            So while Yale and the state may not have actively colluded to render the city’s tax collecting abilities ineffective, they did both condone a regressive tax structure that punished the urban residents who lived within New Haven’s borders. And even though the Board of Aldermen won a “victory” by preventing Yale from expanding, the municipal legislators were unable to leverage their power to persuade Yale to pay for property taxes or city services. When Yale wanted to influence state policy, as when Kingman Brewster got involved lobbying state legislators and U.S. senators, Yale was very effective. But, consistent with the trajectory of an institutional citizen that increasingly located its “residence” in a national or even international sphere, Yale chose to fulfill its civic responsibilities very selectively. This reflected a pattern of retreat from Yale’s historic sense of civic responsibility on which New Haven had depended, and helps explain the conflict between Yale and New Haven in the 1970s.

Yale’s limited sense of obligation to its physical home was set in motion by the late nineteenth century. Yale’s decisions—whether to expand its own dormitories and dining facilities, to recruit students from outside of Connecticut, or to lobby against payment of property taxes—consistently blocked revenue streams on which local entrepreneurs had depended and created an asymmetry between the local community whose residents increasingly subsidized the school and the national and international community whose children increasingly benefited from it. Yale was determined to “bury New Haven in ivy” in order to keep its Ivy-League reputation. But the state also failed to use its resources to promote comprehensive reform towards a fair tax system, such as a statewide income or payroll tax, so Yale and Connecticut suburbanites continued to prosper at the expense of Connecticut’s cities. Unfortunately, Yale’s claim of institutional citizenship fell flat when its most immediate neighbors saw its ivy-covered walls as a site of municipal poison rather than shared promise.

Bibliography

Primary Sources

City of New Haven, Exempt Property Tax Commission. Recommendations. New Haven, CT: City of New Haven, 1970.

Corbin v. Baldwin. 92 Conn. 99, 107 (1917).

Dana, Arnold G. New Haven’s Problems: Whither the City? All Cities? New Haven, CT: Tuttle, Morehouse & Taylor, 1937.

Krattenmaker, Thomas, Snyder, Lester B., and Warren, Allen C., Jr. Report of the Mayor’s Tax Exempt Property Study Commission, 1970. Unpublished manuscript. Hartford, CT: University of Connecticut School of Law, 1970. Available at New Haven Historical Society.

Leone, Robert A. and Meyer, John R. “Tax Exemption and the Local Property Tax.” In Local Public Finance and the Fiscal Squeeze: A Case Study, edited by John R. Meyer and John M. Quigley, 41-68. Cambridge, MA: Ballinger Publishing Company, 1977.

Stokes, Anson P. Yale and New Haven: A Study of the Taxation Question and of the Benefits Derived Locally from an Endowed University. New Haven, CT: Yale University Press, 1920.

The Kingman Brewster Jr. Presidential Papers. Yale University Manuscripts and Archives, Sterling Memorial Library, Yale University.

Yale v. New Haven. 17 Conn. Supp. 155 (1950).

Yale v. New Haven. 17 Conn. Supp. 163, 176 (1951).

Yale v. New Haven. 169 Conn. 4541 (1975).

Yale University v. New Haven. 71 Conn. 316, 332 (1899).

Secondary Sources

Bass, Paul and Rae, Douglas. Murder in the Model City: The Black Panthers, Yale, and the Redemption of a Killer. New York: Basic Books, 2006.

Carbone, Nicholas R. and Brody, Evelyn. “PILOTs: Hartford and Connecticut.” In Property-Tax Exemption for Charities, edited by Evelyn Brody, 233-252. Washington, D.C.: The Urban Institute Press, 2002.

Hall, Peter D. Inventing the Nonprofit Sector and Other Essays on Philanthropy, Voluntarism, and Nonprofit Organizations. Baltimore: John Hopkins University Press, 1992.

. “Is Tax Exemption Intrinsic or Contingent? Tax Treatment of Voluntary Associations, Nonprofit Organizations, and Religious Bodies in New Haven, Connecticut, 1750-2000.” In Property-Tax Exemption for Charities, edited by Evelyn Brody, 253-300. Washington, D.C.: The Urban Institute Press, 2002.

. “Organizational Population Trends and Civic Engagement in New Haven, Connecticut, 1850-1998.” In Civic Engagement in American Democracy, by Theda Skocpol and Morris P. Fiorina, 211-296. Washington, D.C.: The Brookings Institution Press, 1999.

Karabel, Jerome. The Chosen: The Hidden History of Admission and Exclusion at Harvard, Yale, and Princeton. Boston: Houghton Mifflin Co., 2005.

Kuttner, Robert. Revolt of the Haves: Tax Rebellions and Hard Times. New York: Simon & Schuster, 1980.

Leeney, Robert J. Elms, Arms, and Ivy: New Haven in the Twentieth Century. Montgomery, AL: Community Communications, 2000.

Newfield, Christopher. Ivy and Industry: Business and the Making of the American University, 1880-1980. Durham: Duke University Press, 2003.

Rae, Douglas. City: Urbanism and its End. New Haven: Yale University Press, 2003.

Wareck, Stephen A. Consultant’s Conclusions, Comments, and Recommendations. Unpublished manuscript., New Haven, CT: New Haven Revenue Commission, 1985. Available at New Haven Historical Society.

. New Haven Board of Aldermen Revenue Commission. Report on Tax Exemptions. Partial Preliminary Draft Report. Unpublished manuscript, New Haven, CT: New Haven Revenue Commission, 1985. Available at New Haven Historical Society.