Mayor Includes Tuition Tax in Budget

Pittsburgh Mayor Luke Ravenstahl is turning to college students to keep his 2010 budget in balance. As Mayor Ravenstahl presented his budget to the city council this morning he spoke of how he feels he has gotten the city’s financial house in order over the last three years and how he plans to raise enough money to bring the city’s pension system closer to stability. The 2010 budget includes the sale or lease of the city’s parking garages for a one-time infusion of $200 million to bring the fund up to standards set by the state. To maintain that level, the city would have to add $15 million to the fund every year and for that Ravenstahl has proposed a “Post Secondary Education Privilege Tax.” A one percent levy would be assessed on tuition paid to a college or university in Pittsburgh. Ravenstahl calls it a “fair share tax.” He says the average University of Pittsburgh student would generate $135 a year. He believes that will not put a college education out of reach but it would help to lower the burden on city taxpayers. He used three examples of taxpayers in the city to make his point. He notes he pays about $2,500 in wage and property taxes to the city each year, Councilman Bill Peduto pays about $1,600 and Lawrenceville resident and father of four, Larry Coyne, pays about $1,000 a year. Then he asked those gathered, who pays when police are called to break up a bunch or rowdy students of the Southside, a building inspector is called to a home rented by students in Bloomfield or firefighters, “rush out to the scene of a 2-alarm fire in Oakland to protect the lives of Pitt students?” His answer, “I do. Councilman Bill Peduto does. Larry does. You do. We do. We’re all paying the bill.”

Councilman Bill Peduto chairs the City Council’s Budge and Finance Committee. He questions if the tax is legal. He says the state controls what taxes the city can levy and he opines this is not a user fee. The tax is expected to generate $16 million dollars a year. The additional million dollars would go to the Carnegie library system provided it does not close any branches.

The mayor stayed away from a bed tax for patients and hospitals in the city as had been rumored heading into the budget presentation. Mayor Ravenstahl told the council that if it passed the budget as he has proposed it would lead to the city being financially strong enough that he would petition the state to remove Pittsburgh from Act 47 Distressed City status. Councilman Bill Peduto says the most recent 5-year plan only keeps the city’s head above water and does not put it in a position to come out from under the protections offered by Act 47.

Listen to the full budget address.