Tax Exemption Battle Simmers As Harvard Defends Privileges

For the 16th time in 16 years, Boston City Councilor Albert L. O'Neil last week proposed that the state legislature remove the property-tax exemption privileges which non-profit institutions, such as Harvard enjoy.

And for the 16th time, O'Neil saw his proposal shot down as the Taxation Committee Tuesday voted unanimously not to endorse his bill.

But O'Neil is not daunted. "One of these days people are going to realize that I'm right," he said.

They are going to realize, O'Neil says, that such institutions are depriving municipalities of a significant portion of their tax base. He argues that in Boston alone, the percentage of tax-exempt property has risen from 31 percent to 63.5 percent since the outspoken official started introducing the bills.

State Rep. Michael Flaherty (D-Boston), who co-sponsored O'Neil's bill, shares the concern. The property tax exemptions, he said, are "really putting a burden on the private homeowner."

While legislative observers may now consider the issue dead, it received a lot of attention two years ago, when Proposition 2 1/2, a property tax cutting measure, drastically cut revenue to cities and towns. At that point, President Bok felt it necessary to fend off attacks on the exemptions in testimony before a legislative committee.

The fact that Harvard--the largest single landowner in the city--is tax exempt, still heightens town-gown tensions.

Mayor Alfred E. Vellucci has constantly criticized the University for shirking its obligations, and he recently called its contribution "a drop in the bucket."

Harvard officials counter that the University, while not paying taxes, does repay the city in several forms. Harvard "performs valuable public services which otherwise would be performed by government itself," spokesman David Rosen says.

Rosen cites a recent Harvard study which showed that in 1981, the University contributed $106 million to the Cambridge economy, and about $360 million to the state economy.

In addition, the University also pays taxes on its property holdings which are not used for education. Rosen explained.