PITTSBURGH SETS VOTE ON TUITION TAX

The New York Times reports:

The mayor of Pittsburgh calls it the “Fair Share Tax.” But to officials at the city’s 10 colleges and universities and many of their 100,000 students, it is anything but.

On Wednesday, the City Council is expected to give preliminary approval to Mayor Luke Ravenstahl’s proposal for a 1 percent tuition tax on students attending college in Pittsburgh, which he says will raise $16.2 million in annual revenue that is needed to pay pensions for retired city employees. Final Council action will be on Monday.

The tax would be the first of its kind in the nation, and other cities are watching closely as they try to find ways to close their own budget gaps.

Students and college officials argue that the tax will drive students away and place an unfair burden on institutions that already contribute substantially to the city. They add that the measure comes at an especially difficult time for colleges, as endowment values have fallen and requests for financial aid have risen.

The tax, which will most likely end up in the courts, represents a turning point for Pittsburgh, which has remade itself after the steel mills shut down, becoming a hub for nonprofit hospitals and universities. Yet it has been unable to draw significant revenue from its new identity.

This is a big Democratic party issue. The tax free status of the non-profits is now going to become an issue, because there few people left to tax.