Photo | Courtesy of Rosanna Garcia
Rosanna Garcia, Paul R. Beswick endowed chair of innovation & entrepreneurship at Worcester Polytechnic Institute
April 15, 2025
Opinion
Viewpoint: Don’t tax endowments; invest in Worcester’s students instead
Worcester Mayor Joseph Petty recently proposed taxing university endowments, including those of Worcester Polytechnic Institute, College of the Holy Cross, and Massachusetts College of Public Health Sciences, citing concern over these institutions buying local properties. His concern is valid: When large nonprofits acquire private property, the City’s tax base shrinks. But taxing endowments is a shortsighted solution. It won’t fix the deeper issue of academic elitism, and may even worsen it.
This perspective comes from living in that ivory tower of higher education myself. I’ve been in universities for more than 40 years, first as a college student graduating with engineering and business degrees and now as a professor of innovation and entrepreneurship at WPI. I understand the insular nature of academia. I’ve seen how inaccessible elite universities remain to working-class families and, in particular to students of color. I’ve experienced how rising costs only deepen those divides.
However, viewing university taxation as a substitute for lost revenue overlooks fundamental economic principles. As a professor of entrepreneurship, I teach my students when costs rise, you either raise prices, reduce services, or find new ways to create value. A tax on endowments is a cost increase, and universities will respond accordingly. That might mean higher tuition, reduced financial aid, or fewer student services. Each of those outcomes would make college less accessible to those already on the margins.
At WPI, just 8.2% of students identify as Hispanic, 2.8% as Black, and 12.6% as Asian. These numbers fall short of Worcester’s own population, which is nearly 25% Hispanic, almost 14% Black and 7% Asian. Why aren’t more local students at WPI? The most obvious barrier is cost. Tuition, room, and board now top $90,000 per year. The average household in Worcester earns about $67,900. The finances don’t work for most local families. A tax on endowments won’t change that dynamic. But scholarships will.
Mayor Petty, I urge you to negotiate with WPI to fund full scholarships for Worcester students, particularly students of color. This may not deliver the $19 million in immediate tax revenue that a 0.5% endowment tax might bring, but it could generate hundreds of millions in long-term economic impact.
Here’s the math: If WPI were to double its enrollment of underrepresented students by admitting 1,200 more, and just 600 of them graduate and remain in Worcester with high-paying STEM degrees, the economic return would be significant. Assuming they earn $80,000 per year and spend 70% of their income in the city, using a modest economic multiplier of 1.6, that’s $537.6 million in local economic activity over 10 years. And that’s just one graduating cohort.
The infrastructure for bringing Worcester-based students to WPI already exists as it has a transfer partnership with Quinsigamond Community College. What’s needed now is investment through full scholarships for Worcester students, particularly students of color.
Some will say there aren’t 1,200 minority Worcester students ready for WPI. I ask, “Why not?” I’m a first-generation college graduate, Mexican-American woman who earned a chemical engineering degree, an MBA, and a Ph.D. in business. “Sí, se puede” — yes, we can become STEM professionals. And yes, Worcester students of any race and ethnicity can, too.
Mayor Petty, I urge you to look beyond quick-fix revenue. Let’s build a long-term partnership between the city and our universities to open doors for Worcester’s youth. Don’t settle for $19 million.
Ask for full scholarships. Ask for systemic change. Because that’s how we build a stronger, more inclusive Worcester, together.
Rosanna Garcia is the Paul R. Beswick endowed chair of innovation & entrepreneurship at Worcester Polytechnic Institute.
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Anonymous
April 15, 2025
Love this Rosanna!
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