But real estate taxes are paid on only 17 percent of Harvard's 7.2 million square feet. The rest is tax exempt.

Some residents see a discrepancy between the University's wealth, it's corporate-sponsored research and it's not-for-profit status.

"It is the world's most fabulously rich university," says R. Philip Dowds, former president of Cambridge's Civic Association and founder and former president of Cambridge Citizens for Livable Neighborhoods.

"I guess I have some misgivings about supporting that kind of extravagance in the educational system," he says.

"If you're researching a drug for a major pharmaceutical company, is that really a tax exempt activity?" he asks, referring to corporate-funded research performed on not-for-profit land.

Between taxable and exempt property lies a gray area of affiliated housing, which includes properties like Peabody Terrace where staff and students lease apartments.

In the 1960s Cambridge proposed to tax the property. Harvard resisted initially but then compromised with the city to make "payments in lieu of taxes" (PILOT), voluntary contributions to the city which at the time were "essentially" what the University would have paid were the properties taxed, says James P. Maloney, assistant city manager for finance.

A 1989 renewal of the PILOT agreement fixed the University's payments, which consequently have not kept up with inflation, leading residents to argue that the voluntary payments should be higher.

Officials at Harvard's Office of Government, Community and Public Affairs are quick to point to the hundreds of millions of dollars that the University generates in the local economy through payroll, purchasing and fees, as well as services the University provides to some extent for itself, such as garbage collection and police protection.

Beyond the financial, University officials also point to a host of non-financial programs through which Harvard contributes to the community, for example the involvement of Harvard students in Cambridge schools and the opportunities for local residents to partake in the academy's cultural mecca.

These contributions cannot be quantified monetarily, but University officials say they more than make up for any losses to the city in taxes. They also note that Harvard's tax-exempt status is critical to fulfilling its mission.

But critics say the University contributes to the economy more as an accident than out of benevolence. And community leaders, like John Pitkin, president of the mid-Cambridge neighborhood association, say the comparison between taxes and teachers is one of "apples and oranges."

"Volunteers going to the schools doesn't make it any cheaper to build storm sewers," he says.

Priscilla J. McMillan, a local civic activist, says Harvard's physical size and enormous wealth create an imbalance in the city.

"I think it's unhealthy if one organization is so much larger than any other. Imagine the deliberations in the city manager's office when Harvard comes up."