(Reuters) - In 1978, after New York City had barely escaped bankruptcy, Mayor Ed Koch went looking for cash from an unlikely source: the city's colleges and other nonprofits, which do not pay taxes on their valuable land. Koch was trying to do then what cash-starved cities are now pulling off: extracting more money from colleges, universities and private hospitals to help restore bare-boned budgets. Two weeks ago, Providence, Rhode Island, Mayor Angel Taveras struck a deal with Brown University, which doubled its annual voluntary contribution to nearly $8 million for five years. Brown's city property is worth $1 billion and its $2.5 billion endowment is four times the size of Providence's budget. The city has laid off workers and reformed its public pensions in an effort to stave off a potential bankruptcy. Across the country, at least 154 municipalities in 27 states have persuaded nonprofits to make voluntary payments in lieu of taxes for the period from 2000 to 2011, according to researchers at the Lincoln Institute of Land Policy in Cambridge, Massachusetts. "It's in the university's best interest to help the city thrive. And the city has to realize it can't kill the goose," said Daphne Kenyon, co-author of Lincoln's report, regarded as the most comprehensive on the issue.
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