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Tax bill includes excise tax on large university endowments

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WBFO News File Photo

The tax reform bill passed by the U.S. Senate early Saturday includes an excise tax that would affect universities and colleges who have large endowments.

Congressman Tom Reed, a Republican from the Southern Tier, is a backer of the tax, saying some institutions engage in questionable expenditures from endowments. But he did offer an olive branch to higher education leaders who are concerned.

"I’d be more than willing to work with the universities and say, you know what, we’ll suspend this tax and advocate for it, so long as we know where the money’s going and the money is going to hard-working kids on these college campuses across the nation because that’s really where I believe it needs to be in this college-cost crisis we find ourselves," Reed said.

The Association of American Universities criticized the 1.4 percent excise tax, arguing it will harm students and their families. The group says endowments support student aid and other programs.

Reporting on this story came from our public radio colleagues at WXXI in Rochester.