Let's back up for a second.
This is an income inequality thread. For the last few centuries, the best way to move up from poverty is to get an education. Conversely, if elites want to maintain their position atop the income distribution ladder, the best way to do so is to make sure the top institutions of education are dominated by the existing elites and their children.
As a country, we say we value education, and we say we want poor and middle class kids to get educated so they can move up.
If this is the case, we should expect that our government expenditures should be directed at supporting that policy.
In fact, we find (to no one's surprise) that government expenditures are instead greatly weighted toward supporting the elite private institutions that overwhelmingly serve the children of existing elites. How do we know that?
We compare the two. Granted, the article uses estimates, but I think an honest reader of the article would agree that these estimates are not unreasonable.
Princeton vs. College of New Jersey, 2010.
Princeton's tax breaks on its endowment earnings (this is direct money to the bottom line): $151 million in untaxed ordinary gains, $94 million in untaxed capital gains.
The College of New Jersey barely has an endowment.
Princeton received $250 million in research grants. The article does not count the entire amount of the grant, just the approximately $75 million that goes to the school's general fund to cover "overhead". PH and other academics here can tell you how important those overhead dollars are.
Let's leave out the tax expenditures on donations for a moment. The total so far is $320 million in one year in taxpayer subsidies to Princeton University. That's over $41,000 per student.
The state college down the road gets less than $2,000 per student from government sources, according to the article.
For comparison in NC, our flagship state university in 2012
received 486,492,000 in direct state support as well as $578,702,000 in federal grants; using the overhead estimate in the article, 30% of that would be $173,610,000. Add in $181,339 of non-capital grants, most of which is likely Federal financial aid. I don't have time to delve into the full analysis on Carolina's tax exempt endowment earnings and donations. For a partial picture, then, Carolina received at least $841,441,000 in government support, divided by
29,278 students that year for government funding per student of at least $28,739 (underestimate due to excluding the tax-free endowment and investment gains, which for Carolina would be a significant number though far less than Princeton).
So this per student number is substantially less than Princeton, but a lot better than the State College of New Jersey (for which all North Carolinians should be thankful).
Now one could argue that Carolina is itself an elite school that isn't exactly in the business of raising up the poor and middle class. So I looked at my parents' alma mater, Appalachian State, which has for decades served the mission of getting some education into the hinterlands of Western NC.
Here's the 2010 financial report.
If I am reading this right, I think the following line items are essentially government-funded: State Appropriations, State Aid-Federal Recovery Funds, and Noncapital Grants - Student Financial Aid (i.e., Pell grants), and Capital Grants. Those line items total $183,713,095. Investment income was $2,848,096; it's hard to estimate what portion of that represents taxes a for-profit would have paid but clearly it's a small amount in comparison to Princeton's enormous endowment. Let's just round up a little and say ASU received around $185,000,000 in total government support. ASU had probably around 17,000 students in 2010 for a total per student government support of $10,800. Still better than the State College of New Jersey, but less than 40% of UNC Chapel Hill and less than a quarter of Princeton's support.
I am betting that a school like UNC-Pembroke or Western Carolina would show even lower numbers.
What we can see from this exercise is colleges/universities that are actually in the business of educating the poor and middle class receive far less government support,
without even counting tax expenditures on donations, than colleges/universities that are in the business of keeping elites elite. A chunk of this comes from research grants, which at least produce good things for society; a much larger chunk comes from exempting these huge endowments from taxation.