The tax plan passed by Congressional Republicans today repeals a deduction for season ticket holders of many university sports programs, a move LSU Athletic Director Joe Alleva previously called “disastrous” for college sports.
The provision is one of the dozens of changes that will be made to U.S. tax law when President Donald Trump signs the legislation, billed as the largest tax overhaul in 30 years.
LSU, like many schools, requires a charitable donation for people to obtain certain season tickets for athletic events, and donors are partly incentivized to make that contribution by the 80% tax write-off. As part of the Tax Cuts and Jobs Act, the deduction will no longer be available.
Officials at the school worry that the $50 million annual revenue stream from the donations will take a hit. While LSU sports has been shielded from most discussions about higher education funding recently because its athletics program is profitable—mainly on the back of the football team—school leaders say the tax bill makes it unlikely the athletics department will be able to continue to sustain itself.
The Tiger Athletic Foundation has been advising potential donors to consult with tax experts to decide if donating before the new law goes into effect will save them money, says TAF CEO Rick Perry.
“Our disappointment is we had hoped that they would phase this in,” Perry says. “It’s just the magnitude of the change and the short period of time that are the biggest concerns for everyone.”
The deduction has helped fund the increase in programs and facilities at schools like LSU following Title XI, Perry says, and until now, it has worked like it was supposed to.
While Perry says it will take time to determine if there will be a downturn in revenues at all, the threat to college athletics has been widely covered in recent months. Perry noted other tax changes, including decreased tax rates, could mitigate the impact of the change on donors, but economists and tax experts have said the move will almost certainly hurt donations.
“The concerns of LSU regarding TAF donations came to fruition,” says Philip Hackney, a tax expert and LSU law professor. “LSU will have to see how that impacts its bottom line.”
Hackney, who notes he doesn’t speak for LSU, says while it’s unclear exactly how much the repeal of the deduction will hurt LSU’s revenues, simple economics suggests donations will dip.
Congressional leaders in Louisiana, with the exception of Democratic Congressman Cedric Richmond, widely lauded the bill as a boon to the economy that will send more money to Louisianans.
“This is a game-changing rewrite of our tax system that finally puts what’s best for people—not government—first,” Congressman Garret Graves says in a statement.
Graves and others also say the bill includes tax breaks for victims of flooding and other disasters and preserves the historic tax credit, which many developers say has served a vital role in the revitalization of downtown Baton Rouge, among other places.