Feb. 7, 2018 | The Reflector

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CMYK

THE OFFICIAL STUDENT NEWSPAPER OF THE UNIVERSITY OF INDIANAPOLIS

VOL.

96

I S S UE 7

FEBRUARY 7, 2018

UIndy responds to tax cut act The Tax Cuts and Jobs Act will impact bonds, endowments, donations and other financial supports of higher education How does the tax plan impact UIndy’s direct placement bonds? T

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One term of the contract say that any change in corporate interest rates will cause UIndy’s interest rate to rise

UINDY

The new tax rate decreases corporate interest, but still triggers an increase in UIndy’s interest rate for the direct placement bond

BANK

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UIn

DIRECT PLACEMENT BOND According to University President Robert Manuel

Any change in the corporate interest rate triggers and interest increase for UIndy Graphic by Zoë Berg

By Erik Cliburn MANAGING EDITOR The Tax Cuts and Jobs Act was signed into law on Dec. 22, 2017. Under the new tax plan, both corporate and individual tax rates are being cut. Corporations and individuals, however, are not the only ones who will be impacted, higher education will be as well, according to University President Robert Manuel. The tax plan essentially doubles standard deductions for taxpayers to $24,000 for joint-filers, and $12,000 for single filers. The increase in standard deductions also applies to charitable donations made by taxpayers, meaning they would have to donate more they would previously to reap the tax benefits that come with them. According to President and CEO of the Independent Colleges of Indiana David Wantz, the incentive for making charitable donations to universities could be diminished by the increased rate of standard deductions. “Small donors become large donors over time,” Wantz said. “If there is no incentive to give the small gift, it makes it harder to encourage people to give a larger gift. Giving is all about relationships, and so colleges and universities... want to start the habit of giving early to continue to grow and encourage that habit.” Between June 30, 2016 and June 30, 2017 5,852 donations were made to UIndy, totaling $11,978,151; and of those donations, 75 percent were gifts of $250 or less, said Vice President for University Advancement Christopher Molloy. According to Wantz, the reduction

in individual tax rates also could mean that some people may be more willing to donate because they have extra money left over that previously would have been taxed. “The contrary argument to this is, ‘Wait a minute. If people have more money in their pocket at the end of the day, they may be more inclined to give,’” Wantz said. “We don’t know that…. I’m not as hopeful about that one. But I think in Indiana, in particular, there is an additional problem. At the statehouse, there’s an amendment to a bill to repeal the state tax credit for giving to colleges and universities.” Whereas deductions are b a s e d on t h e adjusted gross income of an individual or jointfilers, tax credits give donors a specific amount of money that they can reduce from the amount of state taxes that they owe, based on how much they donated. According to Wantz, if the bill passes it could mean a double-whammy for universities in Indiana, because of the reduction in donation deductions and the elimination of the state tax credit for donating. Along with the possible impact the tax plan will have on donations to the university, it will have an effect on UIndy’s direct placement bonds, according to Manuel. Direct placement bonds are generally loaned out by a bank for an institution, such as a university, to invest, according to financial-dictionary.thefreedictionary. com.

If any university sets up a direct placement bond, it must adhere to the contract established between the university and the bank. According to Manuel, one of the terms of UIndy’s direct placement bond contract is that if the corporate interest rate changes in any way—either an increase of decrease—then the interest rate of the university’s bond would increase. In the case of the new tax plan, the corporate interest rate has decreased, but the change still triggers an increase in the university’s interest rates for the borrowed money, Manuel said. “The bank is in a better position financially because the interest rates have gone down, and they are just making more money because of that contract issue,” Manuel said. “We go to the bank and say, ‘Wouldn’t it be nice if you gave us a gift equivalent to the amount of money that you are making, because for no reason of your own, you’re just making more money.’ So that conversation is happening now. And the other thing we do is we look to see what kind of impact that is and whether or not you can refinance it [the direct placement bond].” Manuel said the rise in the bonds’ interest rates will not create significant financial stress, and that refinancing the bonds may be possible, which would allow for new terms to be place on the contract. Some of UIndy’s bonds, however, are publicly placed and will not be impacted by the new tax plan, according to

“...It [the tax plan] just means you’ve got to change some of your operations as you go.”

Manuel. Publicly placed bonds, which generally help fund construction of new facilities, renovation of existing facilities, purchase of real property, the purchase of equipment, etc., are tax-exempt and therefore are unaffected by the changes that increase the direct placement bonds according to higheredcompliance.org. The new endowment tax that has been included in the tax plan will impose a 1.4 percent excise tax on investment income at private colleges with an enrollment of at least 500 students valued at $500,00 per full-time student, according to insidehighered.com. Although the change does not directly impact UIndy, according to Wantz, the tax feeds into a larger issue of distrust against higher education institutions. “This is part of the national dialogue, that colleges and universities are sitting on these huge bank accounts—they are constantly growing these investments— and yet that money is not reducing the cost of attendance,” Wantz said. “It couldn’t be further from the truth. At one point, seven of our colleges in Indiana were targeted, and the colleges in Indiana use that money to fund a lot of things, including student scholarships.… If I give you money, and I say, ‘I want you to use this money to fund student scholarships,’ you can’t use it for any other purpose than the one I gave it to you for. So it [university endowment] is not a big savings account; it’s money held in trust.” Although the tax plan will have some impact, whether large or small, on UIndy’s finance the price of tuition for students will not be affected by the changes, according to Manuel.

> See Tax Plan on page 10

Shreves honored for donation to Professional Edge Center By Maia Gibson & Shontel Carter NEWS EDITOR & STAFF WRITER

The Schwitzer Student Center Atrium was renamed on Jan. 15 to recognize donors Jefferson and Mary Shreve for their financial contribution to the University of Indianapolis. According to UIndy360, the Shreves currently reside on the south side of Indianapolis. Jefferson Shreve is the owner of Storage Express, a self-storage company with locations in five states. He is a former Indianapolis City-County Council member, representing part of the Indianapolis south side, where he was born. Vice President for University Advancement Christopher Molloy said that Shreve wanted to be involved with UIndy because he saw it as an important south side institution. “He started to support the university in smaller ways,” Molloy said. “He liked President Robert Manuel’s vision. I think he recognized that the university is an important institution on the south side.” Molloy said that he and Manuel spent time getting to know Shreve on campus. Eventually, Shreve decided he wanted to do something bigger for the university by donating a major gift. The Shreves’ donation falls into the naming gift category, which at UIndy is any gift between $100,000 to $5,000,000, although they did not want to disclose the amount. The gift will support the Professional Edge Center, according to Molloy. “He [Shreve] felt like it [donating to ProEdge] was a really good opportunity

Photo by Zoë Berg

Photo by Noah Crenshaw

Schwitzer Student Center’s atrium was recently renamed Shreve Atrium during a dedication ceremony on Jan. 15. It was renamed in recognition of Jefferson and Mary Shreve, who donated to the university. Their donation was in the naming gift category and will benefit the Professional Edge Center and their programming. to help the students get ready for what’s next—whether it would be the world of work or going to graduate school—and to identify what they wanted to do,” Molloy said. In an effort to recognize and honor Shreve and his wife for their gift, Molloy and the university asked if they would allow a campus space to be named after them. The Shreves and university officials discussed potential spaces.They ultimately decided on the atrium because it is a community space that reflected Shreve’s

interest in community, according to Molloy. In a statement from UIndy360, Shreve said that he is proud to be associated with UIndy. “I am so thankful and grateful to have our name associated with this campus and with this space, which is particularly meaningful to us, because this space is that connecting point not just for the student and faculty life but for the community that reaches its fingers through the south side,” Shreve said. Molloy said that while some donors

like to remain anonymous, the university encourages those who contribute to be recognized, including the Shreves. In a statement from UIndy360, Manuel said that renaming the atrium allowed for a connection between the Shreves and the university: “[The naming] is a wonderful opportunity to be able to connect to the Shreves as they think about their philanthropy, engaging the community and facilitating the conversation as the University Heights neighborhood develops,” Manuel said.

reflector.uindy.edu

UIndy announces new Executive Director of Facilities By Noah Crenshaw ENTERTAINMENT EDITOR Last semester, Facilities Management had a change in leadership with the hiring of a new Executive Director, Layne Maloney. Maloney said that the application and interview process for the position started in July and was a long process. “I applied online directly to the university website and then I received a phone call to set up a phone interview, which I had,” Maloney said. “Then I went to have an in-person interview on campus, and then I had an essay question that was a possible facilities issue scenario… then I had five professional references that they checked and, actually Mr. Holstein [Vice President and Chief Financial Officer Michael Holstein] called each one of those personally.” A search committee was formed to find the new Executive Director, according to Maloney. Maloney said that she was in constant contact with Holstein and that her background had moved the committee towards her. “I think that one of the things that attracted them to me is that I have an educational background, but [that] I also have a corporate and industrial background in facilities,” Maloney said. Maloney said that she found out that she was chosen for the position in Nov. and that she chose to wait to start until Dec., so that she could finish up some work at her previous job. “I was with the Galen College of Nursing and I was heavily involved in some very large construction projects that they had there and I wanted to be able to transfer as much knowledge, and as much of all the deadlines, and all these things in planning that I had in place and get that successfully transferred before I left,” Maloney said.

MALONEY Maloney was also the Vice President of Operations and Chief Operating Officer at Western Michigan University’s Cooley Law School. Maloney said that while she was there, she was involved with environmental sustainability projects involving the U.S. Green Build Council. According to Maloney, one of the main reasons why she wanted to work at UIndy was due to the university’s mission and vision, and more specifically the Vision 2030 Plan and its incorporation of Facilities. Maloney said that another reason why she came to UIndy is because she is from and currently resides in Indianapolis. She also said that she is ready for the changes that are happening to urban campuses. “I'm very much excited about the direction that, overall, campuses, [the] students are wanting now,” Maloney said. “They’re wanting that urban experience and I know this is just a little bit on the outskirts, not exactly downtown, but it still has that urban feel and I think I see that a lot of students want, in their college experience… the reason they want the urban is because they want the university be part of a big part of their experience but not the whole of their experience. They want to be out and exploring the city and enjoying the benefits of being in a city.” Maloney said that she likes that UIndy is a located in a city and that it’s enrollment is increasing. Maloney also said that she enjoys the energy that is present on campus. “I like…that sense of community that I felt when I was on campus and that came, not only from the students, but even from faculty and staff who, as you walked around, [are] people who looked genuinely happy to be here,” Maloney said.

> See Facilities on page 10


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