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College try: It's not ideal, but the tuition tax is fair game
Wednesday, November 11, 2009

Pittsburgh's back is against a financial wall, and Mayor Luke Ravenstahl has to come up with $15 million for its pension fund or face a state takeover and a much higher annual tab. That's why he is proposing an unusual measure -- a 1 percent tax on the tuition of college, university and trade school students.

Right now, an estimated 96,000 students attend institutions of higher education within the city limits -- not just four-year and two-year colleges, but also schools that teach art, cooking, welding and other trades. The students, predominantly young people, add to the city's vitality, but they also contribute to its costs.

The most obvious examples are in Oakland, home to the University of Pittsburgh, Carlow, Carnegie Mellon and Chatham universities and where the mayor early in his administration tackled the problems associated with a proliferation of decrepit rental housing. That meant assigning building inspectors who issued hundreds of citations for unkempt, dilapidated properties in order to keep students safe. When local sports teams are successful on the field, their victories sometimes are accompanied by off-the-field exploits by students that demand extra police officers working in the neighborhood's streets.

Many of the largest educational institutions are tax-exempt, and they argue that the proposed "post-secondary education privilege tax" unjustly chips away at the benefits they derive from their tax status. That claim is weak because the levy also will be charged to students of for-profit schools.

The stronger argument against the levy is that no one believes it's a good idea to increase the cost of an education and students can least afford to pay more. It's an argument that has been made against colleges themselves, yet they routinely raise their prices higher than the rate of inflation.

The city has been tightening its belt so it will fit the smaller Pittsburgh that exists today. Harrisburg has refused to provide other alternatives that would allow the city to tap nonprofit institutions or commuters. The city cannot raise property taxes higher or make further significant cuts in public services and still expect to hold on to its middle-class base.

The tuition tax would generate $16 million a year, with $15 million to boost the city's annual contribution to its pension fund, and the remaining $1 million for the Carnegie Library system, provided it agrees to keep open all of its branches that were slated to close early next year.

City Council already agreed to higher pension contributions when members approved the city's Act 47 financial recovery plan, so it is their responsibility, along with the mayor, to find the money to make the payment. The mayor's plan, though not ideal, gives the city a way to reap revenue from the burgeoning educational enterprises that have grown up to replace its shrunken manufacturing base.

Unless someone has a better idea.

Cartoonist Rob Rogers does "Rob's Rough," an early look at his work and his creative process, exclusively at PG+, a members-only web site of the Pittsburgh Post-Gazette. Our introduction to PG+ gives you all the details.
First published on November 11, 2009 at 12:00 am