Mayor admits a ‘certain amount of unfairness’ with student tax proposal

By: Michael Macagnone / Senior Staff Writer

Posted on 20. Nov, 2009 in News

Mayor Luke Ravenstahl spoke with Pitt student journalists about the proposed tax on student tuition.

Vaughn Wallace / Photo Editor

Mayor Luke Ravenstahl said there’s “a certain amount of unfairness” to his proposed Fair Share Tax.

But he also thinks there’s a certain unfairness to the current tax system, which he said burdens city residents more than nonprofit organizations, such as the University of Pittsburgh.

Ravenstahl, who spoke yesterday with student journalists from Pitt, Carnegie Mellon and Point Park universities, said he’s taken the proposed 1 percent tax on student tuition out of his 2010 budget.

But despite the threat of a lawsuit and a loss in state funding, Ravenstahl still plans to pursue the tax for 2011.

“I don’t like it, but it’s a last resort,” he said.

He said he’s considered — and would prefer — two other options. One would levy a tax on the payroll processing of nonprofit institutions, and another would raise a separate $52 per year tax on emergency and municipal services to $144. He said those two options were outside the city’s control and would require the approval of the state legislature.

The 1 percent tax on tuition — which would be roughly $130 for in-state Pitt Arts & Sciences students and $403 for CMU students — would fall into a different category of taxes, one a privilege. Ravenstahl said he chose this tax because it’s “what we’re allowed to do under the law.”

And he has some support.

Five of the nine Pittsburgh City Council members — the number needed to pass the tax — said at a press conference yesterday morning that they support the Fair Share Tax. Those members are Rev. Ricky Burgess, who represents East Liberty and Garfield; Darlene Harris, who represents Brighton Heights and East Allegheny; Jim Motznik, who represents Brookline and Carrick; Tonya Payne, who represents Downtown and parts of West and South Oakland; and Theresa Kail-Smith, who represents Crafton and Duquesne Heights.

Ravenstahl said he hopes to have the tax passed by the end of the year so that the court battle he anticipates having with the Pittsburgh Council on Higher Education, which represents 10 area schools, including Pitt, will be over in time to collect the tax in 2011. If the city were to lose the lawsuit, Ravenstahl said, taxpayers would likely have to cover the city’s legal fees.

But some city and state officials think Ravenstahl has misinterpreted the law.

Councilman Bill Peduto, who represents parts of Oakland, and City Controller Michael Lamb proposed an alternative city budget, which would not include a tax on students’ tuition. Ravenstahl called the alternative budget a “Band-Aid,” saying that it might work for one year, but the city would face bankruptcy in two to three years if it didn’t tax students or come up with additional ways to raise $15 million.

Peduto, a student in Pitt’s Graduate School of Public and International Affairs, said in a news release that he thinks “the mayor is playing high-level poker with people’s lives.”

Threatening the city with budget cuts in lieu of the tax was basically “holding a gun to the city’s head,” forcing them to accept the tax, he said.

Ravenstahl said without an additional $15 million, the city would be forced to make “Draconian” cuts, particularly in the Public Safety and Public Works departments.

Legal advisers for The Pittsburgh Council on Higher Education think the tax is illegal, said Mary Hines, the group’s chair and president of Carlow University.

“We’re willing to test it in court if he continues to pursue it,” Hines said of Ravenstahl and his proposed tax.

Some state representatives think the council might have adequate reason to do so. The Intergovernmental Cooperation Authority, a group of people appointed by Gov. Ed Rendell to oversee Pittsburgh’s finances, unanimously rejected the tuition tax Tuesday, saying it doesn’t comply with state law. The ICA has the authority to deny Pittsburgh some state funding.

Ravenstahl said he didn’t understand why students have expressed such strong opposition to the tax.

Tuition rose about 4 percent at both Pitt and CMU, according to statistics which Ravenstahl provided.

“I don’t recall an outcry from the students when these tuition increases were announced,” he said, adding that he didn’t know the rationale behind the schools’ tuition increases.

One student at yesterday’s meeting pointed out that the money from students’ tuition gets invested in their respective schools.

Ravenstahl said university students use the city’s transportation, emergency medical services and police forces, even if their schools have their own police and emergency medical forces. He said that he did not know how frequently students used these services and that his office was working to calculate that number.

Ravenstahl said he’d be glad to help students if they wanted to demand their schools freeze tuition.

He acknowledged, however, that the area’s universities would probably resist that idea, and as they increased their tuition, the city would receive more money from the tuition tax. One percent of a $12,000 tuition bill, after all, would be less than 1 percent of a $13,000 tuition bill.

He said that if the tuition tax were ever to bring in more money than the city needed to cover its debt, he would consider reducing the tax.

Ravenstahl said the tax would apply to “any education generated in Pittsburgh,” meaning that people who were taking online courses through Carlow University or Pitt, for example, would also pay the fee. Students studying abroad, he said would probably not have to pay the tax.

He said the fee would apply to tuition, not other fees, such as health fees or activities fees, that students pay.

He said he would prefer to exempt students who pay other city taxes from the tuition tax, but the city can’t because of the uniformity clause in Pennsylvania’s constitution.

City council will hold a meeting at 1:30 p.m. today and a public hearing on the Fair Share Tax at 10 a.m. Nov. 30. Both the meeting and hearing will take place in the Pittsburgh City Council Chambers in the City-County Building, 414 Grant St. Downtown.

Peduto suggested that students attend city council meetings, including those held on Tuesdays and Wednesdays.

“Students should fill the room. This is the time for students to have their voices heard,” he said.

Ravenstahl noted that voter turnout was especially low this year. This was true, not only for students, he said, but for much of the general population, as well.

One student asked Ravenstahl what he could do to get students more politically involved.

“Raise a tax,” he said. “I’m just joking.”