David Miller
by David Miller
Wed Dec 16th 2009 at 10:52am UTC

Showdown on Taxing Higher Education in Pittsburgh

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An intense debate has gripped Pittsburgh and the higher education universe since Mayor Luke Ravenstahl announced a plan to tax tuition at colleges and universities located in the city. The Mayor is looking to use the schools in a small way to attack a large budget deficit and argues that the tax is such a small part of a family’s cost for higher education that it won’t affect anything (the old “tax” the rich idea – “it is so small it won’t affect them”).

The tax proposal would really hit elite research universities such as Carnegie Mellon and U of Pittsburgh with their higher tuition rates. But is the Mayor attacking the goose that lays the golden eggs? Pittsburgh’s higher education cluster is a strength  that has anchored the city for decades and helped prevent it from becoming Detroit. Why not tax the Steelers?

Today (December 16) is the vote, and according to some commentators, early reports of easy passage may be untrue. The universities have protested mightily and it appears they may be changing some minds.

Higher education plays a central role in America’s entrepreneurial and innovative strength, sustained economic growth, and increasing standards of living. The sector is undergoing great stress right now and the events and policies in leading centers such as Pittsburgh and California (where some old school protesting of tuition hikes are taking place) will tell us a great deal about what is to come. Where do you think this is all going?

8 Responses to “Showdown on Taxing Higher Education in Pittsburgh”

  1. thelady Says:

    most of these politicians are in bed with the real estate developers and corporate types so they can’t raise taxes on them, instead they target higher ed

  2. Nick C Says:

    As a recent graduate of Pitt, I can guesstimate that I PERSONALLY have dumped around $50K in tuition, $24K in housing AND at least another $4000 dollars into local businesses in Pittsburgh over the 4 years that I lived there. Almost $80,000 into Pittsburgh that I would have never spent if I didn’t go to school there…Talk to a CMU student and those numbers would be double or even triple. Not to mention the ancillary costs of travel, lodging and dining by relatives over the course of 4 years at least 3-4 times a year. I don’t see how these students are justified in being taxed after feeding so much into a local economy

  3. Sean Creighton Says:

    If the Pitt tax passes, I wonder if other cities will follow suit. In Ohio, partisan politics may lead to a $309 million cut to higher education if an agreement is not reached by Dec 31. http://www.daytondailynews.com/news/dayton-news/area-colleges-could-face-millions-in-budget-cuts-449170.html?showComments=true&imw=Y While Republican leadership is holding out, not long ago bi-partisan leadership worked diligently to create the University System of Ohio and adopt the “Strategic Plan for Higher Education 2008-2017″ because they agreed that higher ed would help shape the future of Ohio. What a dilemma they are creating if they do not come to agreement on what appears to be a no-brainer solution.

  4. Manny Says:

    Pittsburgh’s main hope for the future, innovations and jobs is CMU and Pitt. The mayor can do this becuase the students don’t vote. If he is going to tax he should allow each student at these schools to vote. That would be around 50,000 votes just at CMU and Pitt.

    The mayor is a fool and this is no way to fund a pension.

    The kids will just do what Richard did – leave.

  5. Campus Entrepreneurship Says:

    Great comments, good points, and implications that are hopefully part of the debate and will shut this insanity down.

    UPDATE: The vote has been punted until next week. The mayor hopes he can get the schools to make a commitment to ‘voluntary’ payments to the city. see article link.

    http://www.post-gazette.com/pg/09350/1021263-100.stm

    Apparently the minimum “pledge” that the mayor will accept to kill the tax is an aggregate of $5 MILLION per year!

    Political black mail of higher ed — the audacity and short sided nature of this is pretty amazing.

  6. Sean Creighton Says:

    Looks like some alternative deal was struck in Pitt – http://www.nytimes.com/2009/12/22/education/22pittsburgh.html?hpw

    A deal was struck in Ohio as well so no cuts to education for now – http://www.dispatch.com/live/content/local_news/stories/2009/12/22/strickland-signs-budget.html?sid=101

    Happy Holidays!

  7. Campus Entrepreneurship Says:

    Sean.. thanks for posting. I heard the news about Pittsburgh; talk about back room dealing? No details, no official agreement. I appreciate the Ohio news and their attempt to protect higher edu.

    Happy holidays to you and yours. All the best for 2010.

  8. Joshua Vincent Says:

    A tuition tax didn’t really make much sense, after all, many students are poor to start off with, it seems like a poll tax more than anything else, so good riddance.

    I was intrigued by Councilman Burgess’s idea of a tax on land values for not-for-profits. The idea is that the city – the community created those land values and has every right to them, but the buildings and program ons top of the land do serve a public use, and should be left alone.

    Before Pittsburgh became broke, it used a land value tax, and it ought to go back to the future on that one.