ROANOKE, Va. (WDBJ7) The tax reform plan that's now taking shape in Washington, DC is raising concerns on college campuses in Virginia. One proposal could have a significant impact on two of the private universities in our area, and students who depend on scholarships.
At issue is a proposal to tax the endowments of private colleges and universities. Hollins and Washington and Lee are two of 70 institutions across the country that would be targeted under the plan that's now under consideration
"I was like 'my heavens, why are they doing that," said Kerry Edmonds, Hollins University Vice President for Finance and Administration. "And why are they only focusing on private institutions."
The plan that sent shock waves across many college campuses, proposes a 1.4% tax on the endowment earnings of private colleges and universities.
That might not sound like much, but because Hollins has an endowment that totals more than $180 million, the tax could claim more than $250,000.
"Our focus for many years has been to grow the endowment in order to support the institution, and more specifically scholarships for our students," Edmonds said. "And so any kind of excise tax on our endowment and any of the earnings would limit our ability to provide those much needed scholarships."
Both Hollins and Washington and Lee draw about 40 percent of their operating revenues from their endowments.
Senator Tim Kaine says he also has questions about the plan.
"Is it fair to tax private colleges and not public," Kaine asked during a recent teleconference with reporters. "Is it a good idea to do that at all? These are the kind of questions we're going to have to grapple with."
We also received a statement from 6th District Congressman Bob Goodlatte.
He said the proposal was meant to ensure that private colleges and universities are focused on the mission of education, not growing a financial portfolio.
But he also said he will continue to work with the leaders of institutions in the 6th district to advocate for what he describes as "an equitable solution."