Worcester Business Journal

wbjournal.com | May 5, 2025 | Worcester Business Journal 41 Don't tax endowments; invest in Worcester's students instead BY ROSANNA GARCIA Special to WBJ W orcester Mayor Joseph Petty has proposed tax- ing 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 val- id: 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. is perspective comes from living in that ivory tower of higher education myself. I've been in uni- versities 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 work- ing-class families and in particular to students of color. 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. at might mean higher tuition, reduced financial aid, or fewer student services. At WPI, just 8.2% of students identify as Hispanic, 2.8% as Black, and 12.6% as Asian. ese 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? e most obvious barrier is cost. Tuition, room, and board now top $90,000 per year. e average household in Worcester earns about $67,900. 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. 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. Mayor Petty, I urge you to look beyond quick-fix reve- nue. Let's build a long-term partnership between the city and our universities to open doors for Worcester's youth. Rosanna Garcia is the Paul R. Beswick endowed chair of innovation & entrepreneurship at Worcester Polytechnic Institute. Clean energy momentum Rosanna Garcia O ne of the many impressive aspects of the new $316-million Doherty Memorial High School in Worcester is the in- stallation of nearly $3 million worth of rooop solar panels, designed to offset the energy costs of the new building. e late April un- veiling of the Doherty solar panels came less than two weeks aer Massport announced plans to build a 44- acre solar field near Worcester Regional Airport, part of Massport's $500-million commitment to net-zero energy projects over the next five years. While large solar installations have become more common, the need for clean energy projects like these feels more important than ever, along with home- grown companies and technology to support them. Central Massachusetts is home to dozens of com- panies set to play a major role in transitioning the world away from fossil fuels. Among the major players leading the charge is Commonwealth Fusion Systems in Devens, which plans to build the first grid-scale commercial fusion power plant in Virginia in the early 2030s. Another relative newcomer is Ascend Ele- ments in Westborough, which is making deals all over the world to recycle and produce minerals for large batteries, like those in electric vehicles, including the construction of a $43-million plant in Georgia. Other cleantech companies like AMSC in Ayer have been around for decades. Founded in 1987 and once largely focused on wind turbines, AMSC endured the the of its trade secrets by a Chinese company, won its court battle, and reported a 56% increase in its revenues last year, in addition to pulling off an acquisition. e strength of these homegrown companies reflects the strength of the innovation ecosystem in the region, particularly at institutes of higher education. Ascend is a direct spin-off of technology developed at Worcester Polytechnic Institute, while Commonwealth Fusion has its research roots at MIT. e commercial- ization of raw research into well capitalized companies looking to solve big challenges is all the more reason to support research and funding at colleges and univer- sities. e kind of raw research that produces such innovative enterprises comes from a long, slow trickle of experimentation, and it's widely recognized that paradigm-shiing innovations would not be possible in the private sector without government-university research partnerships. While federal funding for cleantech initiatives such remains an open question, Mass. has maintained a strong commitment to making the state a climatetech hub for the future. To that end, the state's economic de- velopment bill signed into law by Gov. Maura Healey in November includes $400 million for climatetech initiatives and tax incentives, which includes support- ing the manufacturing of cleantech in Massachusetts. e state's strategy to provide long-term funding for the life sciences industry more than a decade ago was a game changer, turning the state into a world leader. With life sciences facing a lull in its growth, it is more important than ever to extend our investment to expand cleantech throughout the state. High energy costs remain a challenge, and investing in a clean energy future should not only produce com- pany expansions and more jobs, but help us become more efficient energy producers. Worcester Business Journal is hosting its annual Mass Energy Summit on June 11; if you want to stay up with the latest in best practices, incentives and innovations, please join us. The Worcester Business Journal welcomes letters to the editor and commentary submissions. Please send submissions to Brad Kane, editor, at bkane@wbjournal.com. W W

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