For the past few years, Louisiana legislators have debated whether it’s appropriate for them to be able to hand out highly coveted Tulane University scholarships to constituents, a practice that critics have said can be used to gain political favor.
But the debate took a new turn on Wednesday when a New Orleans City Council member hijacked a House committee meeting, accusing Tulane of using the legislative scholarships as leverage to keep the university’s property tax burden low.
Every member of the Legislature has the authority to grant a scholarship to one constituent per year for Louisiana’s most prestigious private university. The scholarships are tuition waivers, amounting to about $7 million per year, with the cost absorbed by the university. No state dollars are used to provide the scholarships.
For the past three years, Rep. Dee Richard, no party-Thibodaux, has pushed a bill that would preserve the 144 statewide scholarships but make the school — and not the legislators — decide who gets them.
“My goal is to take it out of our hands as a political tool,” Richard said. “Why can’t Tulane take it and do it on their own? Why don’t they do it? You’re not losing anything.”
Richard’s bill got an icy reception from the House and Governmental Affairs Committee. Lawmakers scoffed at the notion they would use the scholarships as a political tool. Some said they don’t even directly award their scholarships, opting to appoint a committee to identify qualified constituents.
His bill was involuntarily deferred — a procedural move that means it’s unlikely to get further consideration by the Legislature this year.
But before the committee took action, New Orleans City Councilwoman Stacy Head took aim at both the individual scholarships and the impact of the program on the city of New Orleans.
“This is a political quid pro quo and a candy jar,” Head said. “You may use it in the most judicious and honorable way, but there have been some very bad situations.”
In 2013, The Advocate and WWL-TV reported that some legislators were giving their scholarships to friends and political supporters.
Head pointed out that Tulane offered the ability to dole out scholarship waivers to the state of Louisiana more than 100 years ago, in exchange for property tax exemptions more generous than any other private university in the state gets.
Private universities in general enjoy exemptions for buildings designated for educational purposes, but they have to pay taxes on their commercial properties. But Tulane, which Head said owns commercial properties including downtown parking lots, enjoys deep discounts on those ancillary parcels.
“The backs of my constituents pay for these scholarships,” she said, noting that the money Tulane saves from the commercial property tax exemptions would otherwise flow to the city’s coffers.
New Orleans voters last week rejected a property tax increase that would have generated new revenue to expand police services and to pay a massive legal settlement owed to city firefighters.
Head said it’s frustrating that the Legislature gets to dictate what taxes Tulane pays to the city of New Orleans.
She said depoliticizing the scholarships would be the first step to getting Tulane to come to the negotiating table and pay a more equitable tax share to the city.
Stephen Wright, director of governmental affairs for Tulane, told the committee that Tulane is deeply committed to the betterment of New Orleans and is the “only university in the nation that has public service requirements for all students.”
He said the value of their community service is an average of $5.4 million dollars and about 200,000 hours per year.
Tulane pays about $135,000 in property taxes on its commercial properties. The school calculates that it saved about $91,000 in property tax payments because of the exemptions.
While the bill stalled in the Legislature, Head also is taking her fight directly to Tulane leaders. She’s written letters to Tulane President Michael Fitts, asking the university to end the legislator scholarship program and voluntarily pay a portion of taxes as a good-faith measure for the city.
Fitts wrote Head a letter saying Tulane already is providing a variety of services to the city. For example, he said, the Tulane University Police Department provides additional police protection to neighborhoods within a one-mile radius of the university, at an annual estimated value of almost $1 million.