Hundreds of Pittsburgh students fight proposed tax

AP News
Posted: Nov 30, 2009 5:45 PM

A proposal to impose a first-of-its-kind 1 percent tuition tax on Pittsburgh's 65,000 college students brought more than 150 to council Monday to assail what is being promoted as the only way to generate revenue in an almost bankrupt city.

"This economy and job market have made it hard enough as it is," Mackenzie Farone, a 22-year-old graduate student and employee of Point Park University told a rally ahead of the public hearing.

Students, she said, live, play and often work in the city, paying myriad taxes.

"And we are the ones that pay the drink tax," she grinned, referring to a 7 percent poured drink tax imposed by the county nearly two years ago.

Earlier this month, Mayor Luke Ravenstahl revealed a tuition tax would be imposed to fill a $15 million gap in the budget.

Pittsburgh, like many towns and cities, enjoys the jobs and prestige created by its universities, but suffers a cash crisis since the nonprofits are tax exempt. As a result, Ravenstahl said, the institutions do not pay their "fair share" for city services.

Ravenstahl says the tax would amount to just over $130 per student annually, far less than the $500 tuition hike University of Pittsburgh students face this year.

While several college towns have toyed with the idea of a tuition tax _ most recently Providence, R.I. _ most have set it aside as politically risky and reached agreement with the institutions to make voluntary payments.

Councilman Jim Motznik said next year, Pittsburgh's nonprofits will pay in lieu of taxes $1.6 million, an amount he called "an insult ... a slap in the face to city government."

The mayor, himself a 29-year-old whose memories of playing college football at Washington and Jefferson College are still fresh, is pushing ahead with the tax even though a state commission that oversees the city's finances said it cannot be used to balance the 2010 budget because its legality will almost certainly have to be decided in court.

Should Pittsburgh succeed, its likely others will follow.

"If a new source of revenue is proposed and is successful ... other municipalities that are dealing with the same sorts of issues will look at this," said Joseph Bright, a Philadelphia-based tax attorney hired by Pittsburgh as a consultant.

And so, students are setting up Web sites, Facebook pages and an e-mail petition drive designed to pressure council.

"We really, really need to dispel this myth that students are a burden," said Rotimi Abimbola, the student body president at Carnegie Mellon University and one of the creators of the Web site.

Clad in sneakers and jeans and lugging backpacks full of books, more than 150 students filled seats and benches in council chambers. Some carried notes. Others listened. Some 2,000 have sent e-mails to council. More than 10,000 signed a petition.

State College _ home to Penn State University _ faces similar problems. Some 75 percent of its 39,400 residents are students, making the town's median income about $23,400 _ more than half the national average _ and cutting into earned income tax revenue, said council president Elizabeth Goreham.

Although the borough has asked the state to allow it to increase existing taxes or impose new ones _ such as a drink tax _ lawmakers have refused, Goreham said. State College is increasingly dependent on state and federal grants to fill holes in its $17 million budget and has cut services and positions, she said.

A tuition tax "is something we would definitely levy," Goreham said.