College Town Businesses Cry Foul

State lawmakers and local officials told the House Municipal and County Government Committee about the economic impact schools have on their communities.

Plymouth State Representative Deb Naro says local tax payers are forced to pick up Plymouth State's tab..

T.15
:51 For example, the University System, has a 41% documented impact on the local Plymouth Police Department. Yet they refuse to acknowledge that impact and pay nothing. It's a wide gap between what they use and what they pay.

Naro says House Bill 1679 is designed to recoup some of those costs.

The measure would require on-campus businesses- the companies that run food service, the book store, and the Taco Bell in the student union- to pay property taxes.

Under state law those businesses are exempt because they are located on university land which is exempt from paying property taxes.

The University System opposes the bill because it says if those businesses began paying property taxes than they would want to rework contracts- costing the system millions.

But a number of Durham business owners, like Paul Berton, are not worried about potential hardships to the University System.

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5:20 as the owner of Hotel New Hampshire, I have to compete daily with a tax-exempt hotel.

That tax-exempt hotel is the New England Center on the Durham campus.

Berton says so-called 'Main Street' businesses like his struggle to match the prices that on-campus business can offer.

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8:01 the director of hospitality services told me this in a private conversation that he could offer a $39 stay at the New England Center if he had to. Folks, all of us have trouble staying in our homes for $39 a night. if the playing field was level. If that New England Center was paying a property tax, they wouldn't be able to offer a $39 night, as I am not.

Berton's testimony clearly alarmed some committee members.

But University System Vice Chancellor Ed MacKay told lawmakers schools are not engaging in direct competition with area businesses.

He also reminded House members the schools already compensate communities.

Last year alone, schools made more than four million dollars in payments for local municipal services.

MacKay considers the bill misguided because it attempts to tax those businesses that are central to the University System's mission.

He says it may sound funny to say but Taco Bell is essential, but it is.

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13:40 they are providing food to our faculty, students and staff. It's important for us, in positioning ourselves in the market, it's what's students demand and expect.

MacKay says the University System is in a tough spot.

The bill would tax a private company that runs a food service, but it would not tax the school if it ran the same service.

The irony in that, says MacKay, is that the bill would penalize the University System for making prudent, financial decisions.

T.16
15:46 the reason we have Sodexho on two of our campuses is b/c some number of years ago, we made an analysis that it was more cost effective and efficient to outsource that particular service...we've decided that's the best business decision for us...we think we are acting in the way most public officials would want us to, the best business practices and the most efficient as possible.

The Committee is expected to hold onto the bill until next session.

For NHPR News, I'm DG.