On Feb. 16, Massachusetts State Representatives Natalie Higgins and Christine Barber proposed legislation to impose an annual 2.5-percent excise tax on endowments of higher education institutions whose assets are valued over $1 billion. In October 2023, the Record reported that the market value of the College’s endowment stood at $3.48 billion, putting the College among the 11 private schools subject to the tax.
If enacted, the bill — titled “An Act to Support Educational Opportunity for All” — will direct the funds collected from the endowments of institutions like Williams, Harvard, Amherst, and MIT toward statewide educational initiatives, such as reducing tuition at public Massachusetts universities.
Higgins explained that the tax could benefit an array of students across Massachusetts. “If we passed this bill tomorrow, the revenue gained would be over $2 billion, which could fully fund debt-free higher education at 29 public colleges and universities across the commonwealth and would provide cost-of-living grants for eligible students,” she told the Record. “The leftover funds will be used to make investments in universal pre-K, benefiting the whole state.”
Critics of the bill claim that it will hamper these institutions’ abilities to conduct research and offer financial aid. In response to this sentiment, Higgins pointed to the bill’s potential to mitigate education inequality by redistributing the disproportionate wealth concentrated within the endowments of elite colleges and universities. “University endowments capture so much wealth, and they grow disproportionately,” she said. “We’re not asking to have an impact on the endowment but on that revenue that the endowment sees year over year.”
As of 2023, the College’s endowment has realized an average annual return of 9.89 percent over the past decade, Chief Investment Officer Abigail Wattley ’05 wrote in an email to the Record in October 2023.
Michael Wagner, vice president for finance and operations at the College, declined to comment on the bill at this time.
Higgins emphasized that the bill would allow for students across Massachusetts to have access to higher education. “Not every resident of the commonwealth has a shot at going to these colleges, but their endowments can make sure that every single resident of the commonwealth has a shot at getting a college degree,” she said. She added that she is hopeful and optimistic about the bill’s success.
