November 27, 2017
Dear Hendrix College alumni, faculty, staff, students, and
friends,
At Hendrix, we have so much to be thankful for this year, from
one of our most diverse student bodies in history, to welcoming new facilities
on campus, to the many distinctions earned by our faculty, students, and
athletic teams.
But even on a lovely fall
afternoon in Arkansas, it is hard not to be worried by the storm clouds
gathering in Washington. At Hendrix, we are absolutely committed to keeping one
of the nation’s top liberal arts educations affordable for all
students and families. But managing costs amid political
polarization and ever-increasing federal regulation is a challenge, even on a
good day. That’s why I am troubled by the current tax reform
legislation. A number of provisions would be extremely disruptive to higher
education, to say the least.
I am particularly concerned about the proposal to tax tuition
assistance programs as income. These programs help us (and many other colleges
and universities) recruit and retain talented employees in a very competitive
job market. And they help many individuals, including those of modest means,
further their educations. Under the current tax reform proposal, a Hendrix
staff member who takes a course each semester toward a B.A. would have to pay personal
income tax on the value of that benefit. Similarly, the numerous faculty and
staff members who participate in tuition remission programs for their children
would face steep new federal tax bills every year. Such a dramatic change to
our tax code is not only mean-spirited, but it flies in the face of our shared
faith that higher education is good not just for the individuals who receive
it, but also for our society as a whole.
I am also worried about the proposed elimination of Private
Activity Bonds, which have long allowed private colleges and universities like
Hendrix (along with hospitals, retirement homes, and low-income housing
projects) to issue tax-exempt bonds. This drastic and short-sighted change will
hurt many non-profits by ending an important low-interest option for financing
new investments in facilities and programs.
Finally, even though the tax reform legislation as currently
written would exempt Hendrix from the proposed federal excise tax on large
college and university endowments, establishing such a levy would set a
dangerous precedent for American private higher education. I am particularly
troubled that the excise tax would only apply to endowments at private
institutions and not public ones. Not only is this patently unfair, but it would
also make higher education less accessible to students, especially those with
limited financial resources, at institutions that offer high-quality academic
programs and higher four-year graduation rates than their public peers.
Tax reform, in whatever final form
it takes, should not be funded on the backs of private, non-profit, church-affiliated
colleges, their hard-working employees, and the students who depend on
institutional financial aid to make ends meet. If you agree, I encourage you to
take a moment to contact your elected officials and share your concerns about the impact of tax reform on
higher education.
Thank you for all that you do
for Hendrix.
All the best,
William M. Tsutsui
President and Professor of History