Tuesday, December 1, 2009

Tuition Tax Turmoil

I've previously mentioned Pittsburgh's plan to raise $15 million -- levy a 1% tax on student tuition.  The public reaction to the plan seems to be pretty negative, but five of nine council members have already said they'll vote for it.

Last night, the council held a hearing on the issue.  Not surprisingly, scores of students and University officials showed up to protest the plan.  If you believe the accounts in the newspaper, it seems that only six people in the entire country think this is a good idea: young Mayor Luke Ravenstahl and five members of city council.  And the Stubborn Six seem have drawn the ire of everybody in the city and beyond. 

Students showed up to point out that they pay a ton of other taxes and have extremely low incomes -- meaning that the tax, though small, would place an undue burden on them.  And an earlier version of the story quoted councilman Bill Peduto comparing a tuition tax to "sin taxes," saying "Why would we ever tax education, where somebody is trying to better themselves?".

I have mixed feelings on the tax.  On the one hand, Pittsburgh has a serious problem generating revenue because they have a disproportionately high number of non-profits located in the city.  It seems fair to find some way to generate a reliable revenue stream from some of these organizations (non-profits do make voluntary contributions to a city fund, but the amount varies with the condition of the economy -- part of the reason the Mayor feels the need to collect more money from them this year).  On the other hand, the non-profits are vital to the city of Pittsburgh and it seems beyond foolish to do anything that might drive them out of the city or at least reduce their generosity to the city.  And it seems like the last thing you'd want to penalize people for would be enrolling in college.  A 1% tax isn't going to amount to that much, even for the highest-priced colleges in the city.  Maybe the Stubborn Six don't believe a college student who says they can't afford to pay a meager few hundred bucks in taxes.  And, let's not kid ourselves, parents will end up paying a good deal of these taxes.  But for those who are eking by with little or no parent support, there's a very real possibility that the tax could be a strong disincentive to continuing their education, at least in the city of Pittsburgh.

So I understand why virtually everybody willing to go on the record strongly opposes the plan.  What I don't understand is why five council members are supporting it.  Do they not want to be re-elected?  Do they have no faith in the political power of students?  Is Ravenstahl buying their support?  $15 million isn't going to make or break the city, so it seems odd that so many people would be willing to stick their necks out to support such an unpopular policy.


Mark Rauterkus said...

The members of council and the mayor have no faith in the students capacity to vote in local elections. The students are not nearly as much as a problem as the seniors or homeowners.

Students don't vote, generally. And, they don't vote for strangers. If they do vote, it is often for the office holder. And, out-of-town students can't vote. They'll vote where their parents live.

Mark Rauterkus said...

By the way, I hate the tax on tuition. Stupid.

The way to fix the problems with nonprofits is to stop their land expansion. Nonprofits should be welcome to build here, if they go upward, and not outward.