Somewhere along the line, many people in America have gotten the idea that government money is ‘free money.’ It has not occurred to many Americans that the government has no money except money it takes from people who earned it. It also has not occurred to many Americans that government money usually has strings attached–taking government money generally gives the government permission to get involved in whatever you are doing with the money. This is true at all levels of government–from local to federal.

A recent example of this appeared in yesterday’s Wall Street Journal. The headline states, “New York Attorney General Eric Schneiderman Is Investigating Cooper Union.” Under that headline, the article states, “Probe focuses on financial decisions that led to school’s move to charge tuition.”

In the interest of full disclosure, I need to mention that one of my daughters graduated from Cooper Union with a degree in electrical engineering, so this article is very interesting to me. When she attended the school, it was tuition-free and she did get some help with her New York City living expenses.

So what did Cooper Union do that gives the State of New York the right to examine their decision to charge tuition? There are two actions that implicitly grant that right to the State of New York. The school owns the land in New York City that the Chrysler Building sits on.

The article explains:

As part of a long-running agreement between the school and the state, the school doesn’t pay property taxes on the Chrysler land and an amount equivalent to the Chrysler building’s property taxes are paid to Cooper Union rather than the city.

The agreement is partly due to the school’s status as a nonprofit and what its officials have argued is a force for social good.

Evidently these two conditions supposedly allow the State of New York to investigate the finances of a private college.

I think the telling paragraph in the article is:

Cooper Union’s financial portfolio is heavily invested in real-estate assets, public financial statements show. As it faced financial difficulties, the school declined to sell its land under the Chrysler building.

If Cooper Union sells that land, the property taxes from that land would be paid to New York City and not to Cooper Union. New York City is facing severe financial problems because of constant overspending and overtaxing–businesses and people are moving out of the city because they cannot afford to live there. I hope that this investigation does not force Cooper Union into selling the land under the Chrysler building–that is a permanent fix to a temporary problem. They are better off charging tuition until they get their books balanced. The State of New York really has no reason to investigate this other than to go after the land the has allowed the school to continue to operate. This is another example of government money with strings attached that are the size of the cables that hold up the Throgs Neck Bridge.