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The largest tax exempt entity in Santa Clara County is depriving neighboring cities of much-needed tax revenue, local leaders say.
Stanford University received more than $16.8 billion in tax exemptions last year for its various campus properties, nearly half of the $35.2 billion of property tax exemptions in the county, according to the Santa Clara County Assessor. This means there is less tax revenue to support local public schools, community colleges, special districts like VTA and county and city governments.
As Stanford considers plans to build more student and faculty housing and continues buying off-campus homes for faculty, some local leaders are concerned about the university’s impact on neighboring cities.
“Every time (Stanford) buys a home, that home potentially comes off the property tax rolls,” Palo Alto Councilmember Tom DuBois told San José Spotlight. “That’s kind of a big deal because it means their property will never be reassessed.”
The Santa Clara County Board of Supervisors voted earlier this week to accept a report from the university and local stakeholders outlining expansion plans in several areas, including building more housing for students and faculty. But before accepting the report, some officials expressed their own concerns about the university’s impact on cities like Palo Alto.
“It’s a double-whammy,” County Supervisor Otto Lee said. “It’s taking housing stock from the public. And two, it’s now the county… (that) is also losing out on that (revenue).”
Since the 1980s, Stanford and Palo Alto have had an ongoing agreement under which the university compensates the city for utilities, police and fire assistance and public transit. But DuBois and Vice Mayor Lydia Kou said they’re interested in exploring models similar to those followed by some Ivy League universities, in which the universities pay more for city services as a way to recoup lost tax revenue. The funds could be used for increasing local library hours, subsidizing child care programs and expanding public transit systems, Kou said.
“Palo Alto’s needs have not been fully vetted,” she told San José Spotlight. “I think it benefits all of us if we all work together.”
The councilmembers have also urged the university to build more housing for its service workers and contribute to Caltrain’s electrification project, which would help students and faculty who live far from campus to access the university more easily.
“The exemption supports the university in fulfilling its mission of research, education and service to the benefit of the region, country and world,” Stanford spokesperson Luisa Rapport told San José Spotlight. “Stanford has also devoted significant lands in the Stanford Research Park and at the Stanford Shopping Center to commercial uses that are not exempt and generate significant tax revenues for the Palo Alto Unified School District, the City of Palo Alto and the County of Santa Clara.”
Private universities, hospitals, religious organizations and public schools are among the organizations eligible for property tax exemptions under state law. The spirit of these exemptions is that the loss of tax revenue is recouped through the community services provided by these organizations. Stanford recently surpassed the Getty Museum in Los Angeles as the largest recipient of property tax exemptions in California.
Stanford’s recent moves to buy up local homes for its faculty has sparked a separate controversy at the county assessor’s office.
“The people in Palo Alto make the argument that Stanford doesn’t pay their fair share, and that’s understandable,” Assessor Larry Stone told San José Spotlight.
Stone said Stanford has sold homes to its professors at below-market rates. Those professors have then expected their homes to be assessed at those below-market rates.
“The professors are all up in arms with my office,” Stone said. “They say we should assess them at the purchase price. We tell them no. The job of the assessor is assess all assess-able property at its fair market value.”
Rapport said the assessments have created economic hardship for its professors. In response, Stanford has requested further tax exemptions on those homes in order to make up the added costs of those assessments.
“It is critical to Stanford’s educational mission to provide housing that is affordable for faculty,” Rapport said. “We have met with the Santa Clara County Assessor’s Office, and we welcome working with them to identify a resolution on this issue.
Contact Brian Howey at [email protected] or @SteelandBallast on Twitter.
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If all public and private universities are similarly exempt, why are they picking on Stanford? BTW, I am not a Stanford Alum, nor is anyone in my family. On the other hand, I have to wonder why the Getty Museum, founded and endowed by one of the richest families in CA, is exempt from taxation. If Gordon Getty can fund Gavin Newsom’s political career, he can pay taxes on the family museum.
This is unfair. These exemptions were made by officials who put them in place. Billions of dollars that could go towards health care for county residents and services. The hospital should be made available for county and its local residence. The exemption should be re-written. The campus should provide services or pay the tax value of its properties…
What a bunch of BS.. Another round of “What’s yours should be mine” misappropriation of assets.. There wouldn’t be a “Silicon Valley” without Stanford and its graduates. What about San Jose State or University of Santa Clara? Aren’t they also tax dodgers? How about the churches in the county? What do they contribute to the county’s bottomless appetite for tax revenues? Stanford is building housing for students and staff. Stanford is compensating the most affected neighbor (Palo Alto) for services provided.. I wish I knew why so many so-called reporters and editorials at Spotlight feel such a sense of entitlement to take a piece of the pie whenever an entity or individual has a perceived economic advantage over their less “fortunate” fellow citizens.
Was the point of this article simply to complain, as a child would, or many a liberal politician and activist, as with Proposition 13?
That’s a revealing way to view it, that someone getting a break on taxes is depriving others of tax revenue. They’re not Sharing™, that is.
San Jose’s proposed COPA, which will convert market rate rental housing units to low-income housing units, run by the greedy non-profit grifters will do EXACTLY the same thing.
Anyone interested in reporting that??
“Much-needed” — false.
Government should not be in the business of collecting “revenue” in the first place. Exemption is normalcy.
Funds can and should be voluntary and assurance contract-based.
Self-inflicted revenue collapse driven by having a governor and health directors with a blood in their eyes intent to take actions that destroyed so many businesses has now led them to start to panic about future revenues. You’ll read more and more stories about how corporations, schools and just about everyone else needs to pay more in taxes to make up for the losses caused by the actions of the health directors and politicians. “Mask up, shut down and shut up! We don’t need to show you any data justifying why we’re ordering it. Just do it or we’ll fine you.” Yet we still vote for the same exact people who destroyed our lives and harmed a generation of children. Shame on us all.
Some context on the significance of Stanford University is needed here. Silicon Valley’s staggeringly large wealth accumulations—and their hyperbolically unequal distribution—stem in large part from the example and role of Leland Stanford, a pioneer in leveraging government power and policy for private gain. By 1861, he was simultaneously the governor of California and the president of the Central Pacific Railroad (later the Southern Pacific Railroad), what became a massive private enterprise that took large loans from the federal government, as well as state and local governments, to build the western portion of the Transcontinental Railroad.
Stanford (along with co-conspirators Huntington, Hopkins and Crocker) built this fortune on the backs of working people–including thousands of Chinese immigrants—and by extorting public entities and leaching public money at every step of the way. The Southern Pacific enterprise also became prolific in buying up any possible competitors, as well as large tracts of strategic real estate all over the Bay Area and California to create a behemoth transportation monopoly.
Stanford and his cohorts were quintessential and unrivaled robber barons. For a glimpse of Leland Stanford’s nefarious history and its significance in the process of capitalist development in the Bay Area (see https://www.youtube.com/watch?v=r2t-bCHhOf4 and compare it to the sanitized, politically correct “reverse-CRT” version of Stanford’s biography here: https://en.wikipedia.org/wiki/Leland_Stanford).
In addition to using his position as governor to obtain an exclusive exemption from California property taxes for his private university, he defaulted on the loans he received from the federal government to build his railroad. Stanford and the university he established has continued to foster significant private capital accumulations by tapping into public money. Stanford enabled the likes of Varian Associates–considered the original DNA of Silicon Valley start-ups–the university under the leadership of Frederick Terman and William Shockley, was transformed into a conduit for the development of weapons of mass destruction—especially nuclear ones—during and after the Second World War.
Over the past 75 years, Stanford University has been the recipient of billions in Defense Department, Energy Department and intelligence agency (e.g. NSA and CIA) research and development money. As the motivating force behind Silicon Valley, it has been at the center of the U.S. military-industrial-research-tech complex (see “The Secret History of Silicon Valley” at https://www.youtube.com/watch?v=ZTC_RxWN_xo; https://www.fastcompany.com/90686262/silicon-valley-wants-to-power-the-u-s-war-machine; https://www.ft.com/content/541f0a02-ea27-43a4-b554-96048c40040d).
U.S. taxpayer money heavily funded Leland Stanford’s railroad in the 19th century and continued to pour into the University he established in the 20th and 21st centuries. The amassed wealth has made Stanford the largest commercial property owner, the largest owner of single-family homes and the seventh largest owner of multi-unit housing in Santa Clara County (https://revealnews.org/article/who-owns-silicon-valley/). As one of the largest recipients of public money of any institution in the country, it is especially ironic that Stanford is the home of the Hoover Institution, an organization that peddles libertarian claptrap about the free-market economy while berating government, public education and taxation (https://www.hoover.org/msclkid=78237277a30b1d1bd78a11d6f9bf34e6).
In the context of the above, Santa Clara County supervisors should be aggressively broadening and deepening the taxation of Stanford property at every turn.
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