City Council postpones Fair Share Tax vote

City Council members assured students they did not want to tax 1 percent of their tuition, and… City Council members assured students they did not want to tax 1 percent of their tuition, and they voted yesterday to postpone the vote on the Fair Share Tax until next week.

What Council President Doug Shields called the “November surprise” — since Mayor Luke Ravenstahl proposed the tax after his re-election — inspired high emotions in Council members, who are currently divided on the issue.

The ensuing debate lasted more than two hours, ending in a 7-2 vote on a motion to delay voting on the tax.

Postponing the vote could allow Council members to meet with representatives from the city’s universities in hopes of negotiating, as well as time to search for other solutions, some members argued.

Shields and Councilman Bill Peduto opposed waiting until next week and voted against that motion. The situation, which has already put the universities and some state authorities on the defense, could “fester” and create more “bad blood,” Shields said.

However, Councilmen Bruce Kraus, of the South Side, and Patrick Dowd, of Lawrenceville, who continue to voice their opposition to the tax, voted to hold the vote.

“We don’t have votes to vote down this bill,” Dowd said. “It would be foolhardy of us to drive this vote.”

Four of nine councilmen said they would have voted against the bill if they had to vote yesterday.

Dowd said he planned to “battle this as hard as [he] can.”

“But it is ridiculous for us to sit here and personalize this debate,” he said.

Council members Rev. Ricky Burgess, Tonya Payne, Theresa Kail-Smith, Darlene Harris and Jim Motznik voiced support for the tax in lieu of another solution. Several of them raised concerns about the possibility of cutting services or jobs or raising property taxes to close the city’s budget gap.

Underlying their concerns was the sentiment that nonprofit land-owners didn’t pay their share to the city. As 501(c)(3) tax-exempt institutions, nonprofits in Pittsburgh, such as Pitt and UPMC, pay limited property taxes.

This and other state restrictions make it hard for the Council to find ways to collect revenue for the city, said Payne, who represents South Oakland and Downtown. She urged the Council to unify to combat the problem and “leave egos at the door” with their opinions.

Harris, whose district includes Brighton Heights and Troy Hill, said some residents, such as senior citizens, can barely afford to pay their property taxes. She said she doesn’t like paying taxes herself, but she has to — and that any discussion of passing a tax is difficult.

Harris said she didn’t want to tax students, but would support it with no other options.

“Cutting [services] is not an option for the safety of the residents and those that come here,” she said.

But Shields, whose district includes Squirrel Hill and Hazelwood, blasted the bill. He called it a “national embarrassment to the city,” as the mayor portrays students as people that don’t pay their fair share.

The universities have “tremendous” influence at the state level, Shields said. He told the Council members that they were trying to fight a formidable opponent.

“You don’t know what you’re doing,” Shields said. “You’ve got the leverage of this pen trying to lift up a Mack truck.”

Other Council members argued that City Council was an independent body and should make decisions as such.

Motznik, who represents neighborhoods like Carrick and Brookline, said though he’d rather not favor a tax on students over a property tax increase, students put up with fees and tuition prices increasing at their universities.

“I honestly think we might be doing [students] a favor with this 1 percent tax,” Motznik said.

Peduto reiterated points made by Shields, saying that many people at the state level think the tuition tax is an example of bad policy. He delivered two letters from university leaders to the Council.

One was from Pittsburgh Council on Higher Education President Mary Hines and the other was from Chancellor Mark Nordenberg.

Nordenberg said in his letter, which he sent to Ravenstahl, that he couldn’t speak for all the area’s colleges, nonprofits and business organizations, but that he thought their leaders “would welcome the opportunity” to discuss alternatives with the city.

“As long as that proposal is being pursued, all of our energies necessarily will be directed toward defeating it and protecting our students,” he wrote.

Robert Hill, Pitt’s vice chancellor of public affairs, did not say which alternatives the University would prefer or whether it would consider paying part of the $15 million city officials had asked local universities to collectively pay to cover the city’s budget hole.

“We reject any alternative that impacts student tuition or smacks of additional types of taxes on our students or the University,” Hill said in an e-mail.

Peduto referenced Nordenberg’s letter in the meeting. He and Shields expressed some sympathy for the schools’ leaders.

“Who in their right mind would negotiate with someone who has a gun to your head?” Peduto asked the Council. “Especially when it’s a bigger gun than your gun?”

Prior to the debate, Motznik introduced amendments to the tax legislation to address some “minor technicalities.”

However, after questioning a representative from the city’s law department about the amendment, Council members realized that not all changes in the bill were clearly indicated.

Motznik said he no longer felt comfortable addressing the amendment until those changes were made obvious.

Shields said he asked the law department to review possible exemptions to the amendment, such as veterans.

The representative said no specific exemptions were requested, so the department didn’t look into the issue. He also said that exemptions were a special concern because of a uniformity clause in the commonwealth’s constitution.

Shields said he thought many kinds of people other than veterans might deserve exemptions from the tax, including children emancipated from their parents by the state, students who are also on active military duty, police, firemen, people who are disabled and senior citizens.

“If sheer lunacy is going to rule, I want some people exempt from this,” Shields said.

Paul Supowitz, the University’s vice chancellor of governmental relations, and other Pitt officials came to the meeting.

City Council is scheduled to vote on the the Fair Share Tax next Wednesday at 10 a.m. at the City-County Building Downtown.

News editor Liz Navratil contributed to this report.