Columbia University and New York University save millions on property taxes each year because of exemptions written into the state constitution. Those days may be near an end.

State lawmakers are introducing legislation on Tuesday that would strip the property tax breaks from the universities, the New York Times reported. The legislation comes as New York City struggles with a drained budget, which could at least be partially alleviated by collecting property taxes from two of the city’s largest private landlords.

Universities, museums and some nonprofits are exempt from paying property taxes in New York. For Columbia and NYU, those savings amounted to a combined $327 million this year alone.

Legislators are concerned about the budget ramifications as the two universities amass larger and more valuable collections of real estate. As the schools grow in size, the property taxes the city can rely on dwindle.

“This bill seeks to address universities that have so blatantly gone beyond primarily operating as institutions of higher education and are instead acting as landlords and developers,” said Assemblyman Zohran Mamdani, the Queens Democrat introducing the bill in the Assembly. Another Queens Democrat, John Liu, is introducing the bill in the State Senate.

Under the planned legislation, the school’s annual property taxes would be redistributed to the City University of New York.

Spokespeople from the two universities both emphasized the schools’ contributions to the surrounding communities. NYU’s spokesperson added that it was “misguided and unfair” for legislation to target only the two schools while other large private universities such as Cornell need not worry.

While the two schools would need to pay full property taxes, the legislation would create a $100 million real estate tax exemption threshold for other universities and nonprofits. 

Even if lawmakers manage to adopt the tax repeals in consecutive legislative sessions, a statewide ballot would still be required to make the changes law.

— Holden Walter-Warner