Though both Union and Skidmore colleges saw their endowments grow by about 10 percent last year, neither is big enough to qualify for a new endowment tax.
Union’s endowment rose from just under $389 million to more than $427 million in the year that ended June 30 – a 9.8 percent increase – according to the college’s annual financial statement.
Skidmore’s endowment grew by 10 percent, increasing from nearly $330 million to more than $363 million, according to its financial statement. The growth in both endowments reflects nationwide trends.
Both endowments, along with most schools across the country, lost money the year before, with Union shedding more than 10 percent of its endowment in 2015.
A new tax provision – a 1.4 percent excise tax on annual investment growth realized by wealthy private colleges’ endowments – was included as part of the sweeping tax overhaul signed into law last week.
Initially, it looked like both Skidmore and Union could have been hit by the new tax, as it was written in the House version of the bill. But in the final law, the tax was narrowed to affect around 25 of the country’s wealthiest colleges – those with endowments of at least $500,000 per student enrolled.
Colleges with endowments of all sizes aggressively lobbied against the provision, worrying the new tax could set a bad precedent for all schools.
“An excise tax on the endowments of some private colleges and universities, regardless of how many or how few institutions it affects, is a remarkably bad idea,” said Ted Mitchell, president of The American Council on Education, a higher education lobbying group, in a prepared statement.