Congress Looking at College Sports Tax Exemption

Republican Sen. Charles Grassley is making noises on this nonsense again. See Congressional report: College-sports tax may not help feds

Hopefully Congress will understand what is going on here.

If there is a time for various feminist and women's rights group to use their political muscle it is now. The tax exemption especially in the major conferences allows the funding of many women sports team. Something that is now required of course under the gender equality legislation applied to college sports.

Further at many of the more healthy programs Universities obtain a substantial "donation" to the general fund.

At LSU for example university also receives half of the monies generated by the licensing and royalties from athletic merchandise. That amount is expected to be about $1.2 million during the 2008-09 year.

As recently noted
However, there are other payments by the athletics department to the university. The main payment is the Overhead Administrative Charge. That fee can be considered a tax the athletics department pays to the university.

For the present year, that amount is projected to be $2.4 million. According to LSU athletics department sources, the Overhead Administrative Charge is three percent of the department's budget.In addition, the athletics department makes yearly payments to the university in four other areas - Chancellor's Excellence Fund, Classroom Building Fund, Campus Beautification Fund and Parking Lots Fund.It seems that the athletics department will pay the university nearly $2 million to cover those four funds for 2008-09.

The Chancellor's Excellence Fund was started by former chancellor Mark Emmert.The university gets $1 for every football and men's basketball ticket sold. That money goes to the Campus Beautification Fund. There is also a set fee the athletics department must give the university for parking rights.In addition, there are two donations by the athletics department to the university for the 2008-09 fiscal year only.

There is a Band Hall donation and a Southeastern Conference Television signing bonus. Those two amounts will total $5.5 million.

Excluding the cost of scholarships and the licensing and royalties, the athletics department will pay the university nearly $10 million for the present school year.

Now, the situation is not going to get better even though LSU is about ready to benefit from new television contracts with CBS and ESPN.Due to the university cuts, it appears that the Overhead Administrative Charge will jump to five percent of the athletics department budget for 2009-10.Working with the same approximate budget for next year as this year, the Overhead Administrative Charge would increase from $2.4 million to $4 million. That's a jump of $1.6 million.

There are similar arrangements at most major Universities around the Country. Messing around with the Goose that lays the golden egg is not very advised