The co-authors use as examples larger universities including Virginia Tech, Notre Dame, and Cornell as well as Hamilton. In explaining the types of economic contributions they make, Wippman and Altschuler write, “These public and private institutions draw hundreds of thousands of students every year, along with parents and visitors, sometimes doubling the resident population for at least nine months. All these new arrivals spend money in local stores, restaurants, and hotels. … Colleges and universities provide steady employment for faculty and staff, who buy homes in the area, enroll their children in local schools, and contribute to local tax rolls. Although tax exempt themselves, a substantial number of colleges and universities make annual contributions to their local municipalities.
“Ironically, the very thing that insulated college towns in past recessions — the share of their economies dependent on higher education — has rendered them more vulnerable than most communities to the economic impact of the pandemic,” the co-authors write. They outline the specific losses anticipated by the Village of Clinton and the city of Ithaca and report on the hopes of each entity’s mayor that college life returns to normal.
In conclusion, they warn, “Without a CARES Act providing financial assistance to state and local governments, a significant number of college towns may well face bankruptcy, an outcome that could contribute to a second wave of unemployment and underconsumption throughout the nation.”