By CHRIS POWELL
How much is Yale University worth to New Haven, the state, and the country?
Yale is the city’s largest employer and, while its educational property is exempt from property taxes, the university is still the city’s third-largest taxpayer.
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Attracting students from all over the world and conducting research in many fields, the university aims to spread light and truth — Lux et veritas being Yale’s ancient motto. Thus the university puts the city and the state favorably in the public mind almost everywhere.
But back home the university is increasingly viewed as more of a political colossus and a cash cow.
Resenting the support Yale gives to the far left and political correctness, the new Republican administration in Washington has imposed a heavy tax increase on huge university endowments. Yale’s stands at $44 billion and this year the tax increase will start costing Yale $300 million, so the university is cutting expenses by reducing graduate student programs.
Meanwhile Yale’s labor unions and other union activists in New Haven are agitating to induce the university to increase its voluntary annual payment to city government, $24 million, to $110 million, an increase of 460%.
Together those new expenses might knock 1% off Yale’s endowment every year.
While the university could survive that for a long time, of more concern is the attitude of both the Republican national administration and the laborites in New Haven that the university’s property should be theirs to dispose.
At least the revenue raised by the federal tax on university endowments would be available for general national purposes, and the next Democratic national administration might sharply reduce the tax to reward its friends just as the current administration raised the tax to punish its enemies. (The Yale Daily News reported the other day that in 2025 Yale professors made 1,099 contributions to federal political campaigns and not even one went to a Republican.)
The extra revenue the local laborites want Yale to pay to city government on a “voluntary” basis wouldn’t be “voluntary” at all. It is being extorted by the implicit threat of a strike by university employees and other hostile action by labor-affiliated people in New Haven. They don’t see extra payments from Yale as financing a reduction in the city’s high property taxes. No, they see higher compensation for the government class, the class to which most of them belong.
Yale’s tax-exempt property in the city is hugely disproportionate, about 45% of the value of all property in the city. Removing the university’s tax exemption probably would produce another $140 million in city tax revenue every year.
But then Yale’s economic contribution to the city is hugely disproportionate too. Without the university New Haven would be just another poverty factory like Bridgeport. New Haven’s suburbs, where many Yale employees live, would be greatly diminished as well.
Geographically Yale is either too big or New Haven is too small. State policy ratifies the disproportion. The problem should be solved by changing that policy, not by subjecting Yale to more extortion by the unions.
The problem could be fixed simply, at least in principle.
State law could cap property tax exemptions for nonprofit entities. Yale’s tax-exempt property in the city is estimated to be worth $4.5 billion. A cap on property tax exemptions for any single entity — say, $2 billion — would add $2.5 billion to New Haven’s tax rolls. The cap could be implemented gradually to give the university plenty of time to adjust.
Or state government could greatly increase its own financial aid to New Haven and other cities, like Hartford, that are home to much tax-exempt property, though state government already disproportionately finances them.
In any case, insofar as New Haven’s delegation in the General Assembly is large and so influential — it is entirely Democratic and includes the Senate president, Martin M. Looney — it’s a wonder that Yale’s huge property tax exemption remains untouched even as New Haven’s legislators keep hastening illegal immigration, which is very costly to the city, especially its schools.
Chris Powell has written about Connecticut government and politics for many years. (CPowell@cox.net)
Chris Powell column 
Chris, you are incorrect. Yale’s tax exemption is codified in our state’s Constitution. Even if the Constitution was amended, there is a contract clause argument that would prevent it from being amended as applied to Yale.
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Please see this column from last year:
https://chrispowellcolumn.com/2025/09/03/yale-has-become-too-big-for-its-property-tax-break/
“Yale has claimed that the charter it received from Connecticut’s colonial legislature in the 1700s gives the university permanent exemption from property taxes. But the charter and its revisions under state law during the next two centuries put limits on Yale’s tax exemption, the first limit being a mere 500 pounds sterling. The tax exemption was thought justified in large part because, in its early years, Yale was heavily subsidized by cash from state government and was a de-facto government institution. A remnant of this connection to state government is the continuing ‘ex-officio’ membership of Connecticut’s governor and lieutenant governor on the university’s Board of Trustees.
“Yale no longer gets a direct annual cash stipend from state government but its $146 million tax break is worth a lot more. That money is paid not just by New Haven’s residents through their property taxes and rents but by all state taxpayers as well, since New Haven city government is so heavily subsidized by state government.
“Even if the courts concluded that the university’s charter, as amended over the years, puts it beyond all property taxes on educational buildings, state government could coerce Yale by restricting the acreage it owns in the city, thereby forcing it to sell property and rent it back.”
cp
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Hypothetical comparison of Yale’s contribution to local schools with that of Princeton. Courtesy of ChatGPT:
“what if Yale/Harvard paid Princeton-level recovery rates
Alright—let’s do the counterfactual math: What would happen to local school funding if Yale and Harvard paid at Princeton-level recovery rates (≈50–60¢ per $1 of foregone property tax), instead of their current much lower rates?
I’ll keep this concrete and conservative.Assumption (explicit)
🏫 Yale → New Haven (Schools)Baseline (current reality)
If Yale paid at Princeton-level (55%)
0.55 × $145M = ~$79.8M / year
$79.8M − $22.5M = ~$57M additional per year
What that means for New Haven Public Schools
With +$57M/year, the city could realistically:
Plain English:
🎓 Harvard → Boston & Cambridge (Schools)
Because Harvard straddles two cities, I’ll combine them (this slightly favors Harvard in the math).Baseline (current reality)
If Harvard paid at Princeton-level (55%)
0.55 × $160M = ~$88M / year
$88M − $9M = ~$79M additional per year
What that means for Boston & Cambridge schools
For scale:
An extra $79M/year could:
Plain English:
📊 Side-by-side impactUniversityExtra $/yr at Princeton RateEffect on SchoolsYale → New Haven~$57MEliminates chronic deficits; major quality improvementsHarvard → Boston/Cambridge~$79MMaterial per-pupil gains; reduces tax & state pressureCombined~$136M/yearOne of the largest education funding shifts in the Northeast🧠 The key insight
This isn’t about “taxing nonprofits” in the abstract.
It’s about this reality:
If Yale and Harvard matched that already-existing Ivy League norm:
Just a different recovery ratio.
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