We may get a new on campus football stadium soon but not for the reason you think

[jivecat]

I have seen every argument possible about why we need an on campus stadium (of which I am not in favor). An issue that most people missed during this election was the future administration's disdain for higher education both because of political leanings (left) and the absurd price. It is early but it does sound like Trump's administration is going to closely look at endowments and taxing them along with potential penalties. They plan to create the "American Academy" with these funds. It was explained to me that the best way to move around those punitive measures would be to spend the endowment. Real estate and construction are the most conservative measures and would easily move around any type of federal tax scrutiny. PITT has the 29th largest endowment ($5.5 billion) in the country and would certainly be under attack. I think much depends on how aggressive the endowment tax would be (it could be upwards of 20%) but PITT would need to quickly take money out of the endowment for a project to benefit the University. A stadium is a no brainer. They would actually lose money by not buying land and building the stadium.

 

[Sean Miller Fan]

I have seen every argument possible about why we need an on campus stadium (of which I am not in favor). An issue that most people missed during this election was the future administration's disdain for higher education both because of political leanings (left) and the absurd price. It is early but it does sound like Trump's administration is going to closely look at endowments and taxing them along with potential penalties. They plan to create the "American Academy" with these funds. It was explained to me that the best way to move around those punitive measures would be to spend the endowment. Real estate and construction are the most conservative measures and would easily move around any type of federal tax scrutiny. PITT has the 29th largest endowment ($5.5 billion) in the country and would certainly be under attack. I think much depends on how aggressive the endowment tax would be (it could be upwards of 20%) but PITT would need to quickly take money out of the endowment for a project to benefit the University. A stadium is a no brainer. They would actually lose money by not buying land and building the stadium.

This is actually a great point and its something that most Americans really didnt consider or care that much about. Regardless of political leanings, I think most people would agree that college costs too much so I dont think even the staunchest lefty would shed too many tears if you told them that endowment gains would start to be taxed. They do have to pay for corporate tax cuts and billionaire tax cuts somehow so this seems like just as good (or bad) as an idea as any. Last time, they took away the charity deduction and state and local income tax deduction to pay for the corporate and billionaire tax cuts.

The thing about your plan though is that endowments cannot be spent on infrastructure. I am assuming perhaps this would change if this new law passes? Maybe they want to incent colleges to spend their endowments to pass savings on to students and to build stuff without asking for government assistance (ie The Pete).

You'd have to give me the downside of this. Pitt won't be able to have as many fellowships now because their investment gains are taxed? I dont really care. I think they'll figure it out. Lets start spending some of that money and build SMF Stadium!

 

[pittdan77]

I think the cascading effect of something like that would probably eliminate the need for a college football program.

 

[joeydavid]

I have seen every argument possible about why we need an on campus stadium (of which I am not in favor). An issue that most people missed during this election was the future administration's disdain for higher education both because of political leanings (left) and the absurd price. It is early but it does sound like Trump's administration is going to closely look at endowments and taxing them along with potential penalties. They plan to create the "American Academy" with these funds. It was explained to me that the best way to move around those punitive measures would be to spend the endowment. Real estate and construction are the most conservative measures and would easily move around any type of federal tax scrutiny. PITT has the 29th largest endowment ($5.5 billion) in the country and would certainly be under attack. I think much depends on how aggressive the endowment tax would be (it could be upwards of 20%) but PITT would need to quickly takmoney out of the endowment for a project to benefit the University. A stadium is a no brainer. They would actually lose money by not buying land and building the stadium.

Churches, hospitals and universities all should be taxed... that said, he's full of shit. Unless congress can change the laws, none of this is happening.

 

[jivecat]

This is actually a great point and its something that most Americans really didnt consider or care that much about. Regardless of political leanings, I think most people would agree that college costs too much so I dont think even the staunchest lefty would shed too many tears if you told them that endowment gains would start to be taxed. They do have to pay for corporate tax cuts and billionaire tax cuts somehow so this seems like just as good (or bad) as an idea as any. Last time, they took away the charity deduction and state and local income tax deduction to pay for the corporate and billionaire tax cuts.

The thing about your plan though is that endowments cannot be spent on infrastructure. I am assuming perhaps this would change if this new law passes? Maybe they want to incent colleges to spend their endowments to pass savings on to students and to build stuff without asking for government assistance (ie The Pete).

You'd have to give me the downside of this. Pitt won't be able to have as many fellowships now because their investment gains are taxed? I dont really care. I think they'll figure it out. Lets start spending some of that money and build SMF Stadium!

This is how it was explained to me. The endowment may not be able to be used for infrastructure (although that is debatable...I think it is more for athletics) but the interest that would get taxed could be. So $275,000,000 per year would get taxed at 20%....let's say $50 million would go toward taxes owed to the government. Now take that $50,000,000 and put it toward a mortgage/construction costs for the new stadium and run that out for the next 15 years. This is how it would work....although I am simplifying much of it.

 

[pittdan77]

The endowment may not be able to be used for infrastructure (although that is debatable..

Endowments usually have very strict limitations on how they're spent.

This has been tried before and the schools it affected just did the usual avoidance that wealthy people and institutions usually do.

 

[Gunga_Galunga]

Endowments usually have very strict limitations on how they're spent.

This has been tried before and the schools it affected just did the usual avoidance that wealthy people and institutions usually do.

First I'll say that I think using endowment money to build a stadium is a dumb idea, and I'd love to have an on campus stadium.

However, only a portion of the endowment is restricted, and this has been discussed many times on this board after people tried to claim it was restricted. Without going back to check, I think something like 40% of Pitt's endowment is unrestricted at this point.

 

[Las Panteras]

First I'll say that I think using endowment money to build a stadium is a dumb idea, and I'd love to have an on campus stadium.

However, only a portion of the endowment is restricted, and this has been discussed many times on this board after people tried to claim it was restricted. Without going back to check, I think something like 40% of Pitt's endowment is unrestricted at this point.

My thought exactly

 

[TheWerewolfFromTwilight]

Higher education is indeed a joke, and I watched a certain Pitt doctorate program turn my ex into a complete goofball. 4.5 years at Pitt didn't turn me into anything but a broke mofo. Could have learned the same amount of pertinent information I needed for the career I chose in about three months of a more intensive course designed specifically for that.

 

[HailtoPitt]

They can't just start spending the endowment principal. Only exception would be for money donated that was not designated and Pitt decided to place it into endowment.

 

[pittdan77]

First I'll say that I think using endowment money to build a stadium is a dumb idea, and I'd love to have an on campus stadium.

However, only a portion of the endowment is restricted, and this has been discussed many times on this board after people tried to claim it was restricted. Without going back to check, I think something like 40% of Pitt's endowment is unrestricted at this point.

I'll take your word for it. I just know that there are usually restrictions.

 

[USN_Panther]

Higher education is indeed a joke, and I watched a certain Pitt doctorate program turn my ex into a complete goofball. 4.5 years at Pitt didn't turn me into anything but a broke mofo. Could have learned the same amount of pertinent information I needed for the career I chose in about three months of a more intensive course designed specifically for that.

I think you are underestimating the value of the writing courses you took at Pitt. You definitely have some skill in that regard. It may not pay the bills, but it keeps us entertained.

 

[jivecat]

They can't just start spending the endowment principal. Only exception would be for money donated that was not designated and Pitt decided to place it into endowment.

I think the principal is safe...it is the interest that is made from the endowment that is the issue. If the PITT endowment is making $275,000,000 year on interest...why are they increasing tuition by 5% per year? This is where I think the government is going to win this standoff since taxpayers help fund many of these schools.