Cornell University’s founding principle, “… any person … any study,” speaks to an expansive vision of access and opportunity. However, while the university strives to provide a high-quality education for its student body, it simultaneously undermines educational quality for a different student population — that of the Ithaca City School District (ICSD).

Cornell has an annual operating budget of $6.3 million and enjoys an endowment of about $10.7 billion. Meanwhile, its neighbor, the ICSD, is confronted with a $7 million budget deficit and has already been forced to cut programs and increase class sizes. Despite their polarity, these financial circumstances are not unrelated. The ICSD receives far less state funding per student than the other school districts in Tompkins County, a product of the community’s wealth. Unfortunately for local residents, the majority of this wealth is locked behind university gates. While the ICSD generates nearly 70% of its operating costs from local property taxes, it can tax only 40% of this property — Cornell owns the majority of the remainder, which, as a result of the university’s status as an educational institution, is exempt from taxation under Internal Revenue Code Section 501(c)(3). According to the Ithaca Common Council, if the university were called upon to pay property taxes, it would owe the district about $46 million per year. Instead, it is required to contribute just $1.6 million in taxes for its non-education property holdings and reluctantly scrounges its pockets to produce a voluntary annual contribution of just $650,000.

While Cornell University does choose to make small contributions to the ICSD, its lack of obligation to do so creates a stark power disparity between the secondary and undergraduate systems of education. In June 2024, Ithaca voters rejected an ICSD school board budget that proposed raising local property taxes by 8.42%. Facing limited options, the district proposed that Cornell’s yearly donation be raised to $10 million, a fraction of the revenue they would receive without the university's tax exemption. In response, Cornell threatened to withdraw all funding. Leaving the funding of the ICSD at the whims of Cornell makes it difficult for the district to predict the resources they will have access to and threatens the stability of student education.

In addition to inhibiting school district quality, Cornell University’s avoidance of property taxes places a heavy burden on the community’s low- and middle-class taxpayers and homeowners. Ithaca has the highest rent of any small city in the United States, in part due to the high property taxes required to fund critical infrastructure like the public school system. The flood of Cornell students, staff, and faculty, who consume available units and drive up prices, exacerbate this crisis of affordability. The high and rising cost of living displaces local students and families and forces much of Cornell’s non-local staff to make long commutes to work.

Some justify the absence of the imposition of taxes on universities by citing the benefits these schools bring to college towns. These positives are legitimate — Cornell is Tompkins County’s largest employer, draws in tourism and student spending, and fosters student volunteerism. However, this benefit is mutual. Cornell students make use of the public services in Ithaca, including maintenance of roads and sewage services, despite not financially contributing to their upkeep. This imbalance raises a pressing question: Shouldn’t those who benefit from the Ithaca community also help to sustain it?

This town-gown taxation tension extends beyond Cornell. In 2021, in response to vehement protests, Yale University pledged a six year, $135 million voluntary contribution to New Haven. Similarly, the University of Pennsylvania committed to a yearly contribution of $10 million to Philadelphia public schools. Pressure to bring such changes to the state of New York has mounted in recent years. A series of bills were introduced to the New York State Assembly, targeting the ability of wealthy universities to skirt property taxes. One such bill, NY State Assembly Bill 2023-A8479, aimed to repeal the property tax exemption given to private universities that would otherwise be taxed at least one hundred million dollars annually. While this legislation would not apply to Cornell, as the university retains a revenue of “only” $32.5 billion, the sentiment holds. Wealthy universities should no longer be permitted to pass off the tax burden to struggling locals. It is time for Cornell to pay its fair share.