Mayor Ravenstahl pitches 1 percent tax on college tuition

Adam Brandolph

Nov. 9, 2009 (McClatchy-Tribune Regional News delivered by Newstex) -- Pittsburgh Mayor Luke Ravenstahl today unveiled a 1 percent tax on college students' tuition to plug a $15 million hole in the city's budget.

The "Fair Share Tax" is expected to raise $16 million, which would finance the shortfall in the city's pension fund and provide $1 million in sustained annual revenue for the Carnegie Library of Pittsburgh. Ravenstahl announced the tax as he submitted his $452 million budget proposal to City Council.

"We value Pittsburgh's nonprofit community. They are our major employers and a big part of why our economy continues to be strong. However, we can no longer afford to provide city services to those who are not paying their fair share," Ravenstahl said.

"Generating revenue through new taxes or fees is something I wish I did not have to do. But I refuse to raise taxes that fall on already overburdened residents, small businesses, and property owners. I also refuse to cut deeper into the services we provide our neighborhoods, or steal from our reserve funds."

Ravenstahl scrapped proposed taxes on all-day parkers, hospital patients and some water customers in favor of the fee on college students.

"I believe the "Fair Share Tax" is our best option," Ravenstahl said, noting that he was willing to listen to other options, but vowed to veto options that did not contain viable solutions to fund the city's pension fund, which has 28 percent of the money it needs to fulfill its obligations.

Ravenstahl said the $15 million, combined with profits from leasing the city's parking garages, would put the pension back on sound footing.

The proposed college education privilege tax would be based on one year of tuition and be paid annually by students who attend post-secondary schools in the city, including colleges, universities, art, business and culinary schools.

In-state undergraduate students at the University of Pittsburgh pay at least $13,344 a year in tuition, depending on their field of study. If the "Fair Share Tax" is approved, students would pay about $133 a year. Carnegie Mellon undergraduate students pay $40,300 a year in tuition, meaning their share would be about $400. Students at the Community College of Allegheny County would pay about $27 a year.

University officials have said for months -- since Ravenstahl first introduced the proposed fee -- that they already contribute to the city through property taxes on non-educational facilities and parking and amusement taxes.

Pitt, for instance, paid about $24,000 to support half the salary of a building inspector for Oakland, said spokesman John Fidele.

"It's never easy to impose new fees or taxes, but this is the fairest way to share the cost for the services our city provides," Ravenstahl said.

The library expects a gap between projected expenses and funding to widen to $1.5 million next year and to $5.1 million by 2014 if cost-cutting steps aren't taken, according to revised projections released last week.

Library officials said they will close the libraries unless there is a long-term funding plan.

"We greatly appreciate all of the ideas, offers and support that have recently come from our elected local and state officials," said a statement from library spokeswoman Suzanne Thinnes. "Carnegie Library of Pittsburgh's Administration and Board of Trustees will work collaboratively with the mayor and others who want to guarantee that Pittsburgh's library system remains strong for all generations."

Newstex ID: KRTB-0288-39559231