As you know, our Congress is currently working on legislation to change our tax code.听The House of Representatives passed H.R.1, the Tax Cuts and Jobs Act out of the Ways and Means committee on Wednesday, and we expect a floor vote sometime next week. The Senate has introduced its own version of this bill, which differs from the House bill, and we are analyzing that legislation now.
While both have many provisions affecting various industries and all of us as individuals, today we are writing to inform you of the impact on higher education.
Chancellor Philip P. DiStefano
Today, President Benson, myself and the three other 抖阴短视频 chancellors will be contacting our federal delegation to let them know our concerns about the proposed legislation.听A number of associations to which we belong, such as the , the , the and ,听have weighed in on the negative impact this legislation will have on higher education and our students.
Here are the key elements of the House bill that concern us, the possible impacts and what we have shared with our Congressional delegation:
Eliminating the Lifetime Learning Credit (LLC), Student Loan Interest Deduction (SLID)听and Section 117(d)
Eliminating and consolidating these tax credits will hurt graduate students in particular, who already receive limited federal educational support. Section 117(d)(5) currently treats qualified tuition reductions for graduate students, who are serving as teaching and research assistants, as a tax-exempt benefit.
Eliminating this benefit will make it dramatically more costly for students to pursue a graduate degree and harm the research enterprise, as well as the STEM pipeline. On our campus alone, this change would subject many graduate students to additional tax liability with no new funds to address that liability.
Encouraging private support of 抖阴短视频鈥檚 missions
For public colleges and universities like 抖阴短视频, the charitable deduction is vital to generating private support to help achieve our educational missions of teaching, research, public service and patient care. H.R. 1 nearly doubles the standard deduction, a change that is projected to eliminate use of the charitable deduction for more than 90 percent of U.S. taxpayers.
This week, the nonpartisan Joint Committee on Taxation (JCT) estimated that H.R. 1 would decrease use of the charitable giving tax credit by $95 billion next year alone. This could result in a loss of millions of dollars for financial aid programs that benefit 抖阴短视频 students, groundbreaking teaching and research activities by 抖阴短视频 faculty, and vital patient care programs.
We are likewise concerned by the repeal of the charitable deduction for the right to purchase tickets at college athletic events. This is another tool that incentivizes charitable giving to support our students, research and public service.
Finally, H.R. 1 creates a tax on endowments targeted at private colleges as universities. While this provision does not directly impact 抖阴短视频, we remain deeply concerned about the precedent of an endowment tax. 抖阴短视频's endowment is a vital tool for philanthropists to fund the important missions of the university in perpetuity. Taxing these funds will rob future generations of Coloradans of opportunities in education and science.
Financing Colorado鈥檚 infrastructure investment needs
抖阴短视频 uses tax-exempt bond financing to make important capital infrastructure investments, such as the construction of academic buildings, residence halls, student centers and many other facilities. 抖阴短视频 is particularly concerned by the inclusion of Section 3602 in H.R.1, which would repeal the tax exemption for advanced refunding bonds.
Public university systems like 抖阴短视频 have used advanced refunds to great effect over the last decade鈥攔educing costs for students and faculty, even as state financial resources have been severely restricted. We estimate 抖阴短视频 has saved approximately $60 million in borrowing costs over the last decade by using advanced refunds. Eliminating this tax-exemption will dramatically increase 抖阴短视频's borrowing costs in the future.
Likewise, 抖阴短视频 has concerns about Section 3601, which eliminates private activity bonds. 抖阴短视频 has worked closely with entities such as our hospital partners, our faculty practice plan and the 抖阴短视频 Foundation to utilize private activity bonds to lower the costs of many important facilities on our campuses. Ultimately, savings to 抖阴短视频 campuses on bond payments free up our budget to focus on student affordability.
While there are other provisions, as well, that will affect higher education, these are the key impact areas.听We encourage you to .
Our government relations team also is analyzing the effect of the proposed Senate legislation, and we will be reaching out to our Colorado senators.
The university adheres to all of the requirements for representing our interests and engaging with our lobbyists to represent us. We remind you that faculty and staff, and of course students, are always free to engage in the political conversation as individual citizens. Here is a link to the for your reference.
Please contact Kirsten Schuchman in Strategic Relations and Communications for more information at kirsten.schuchman@colorado.edu.
Philip P. DiStefano,
Chancellor
