Council puts tuition tax proposal on hold

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Pittsburgh Mayor Luke Ravenstahl's bid for money from the city's universities got a grade of incomplete yesterday, as a handful of council members pushed forward with talks that might lead not to cash, but rather to a civic coalition aimed at long-term fiscal health.

Mr. Ravenstahl said last week that if the universities didn't agree by Monday to raise $5 million a year in contributions from tax-exempt institutions, he would ask a council majority to approve, at yesterday's meeting, the tax aimed at extracting $16 million annually from their students.

Neither happened.

On Tuesday night, Councilwomen Theresa Smith and Tonya Payne got the sense that their efforts at diplomacy between the city and university leaders might bear fruit. The two, both of whose ayes are crucial if the tax is to pass, urged a postponement of the vote on the 1 percent levy on post-secondary school tuition.

What's emerging is "a collaboration between everyone, and that's what it's going to take to resolve the issue," said Ms. Smith.

Yesterday morning, Mr. Ravenstahl swung behind their push to postpone.

"My goal is to come to an agreement with the nonprofit community before the end of the year, and I am more hopeful than ever that we can do that," Mr. Ravenstahl wrote in a letter to council. "It is my hope, if talks continue as they have, that we will have new and strong partners in our efforts to complete our financial recovery."

He would not submit to interviews.

Discussions appear to have shifted from contributions to collaboration.

"I see more goodwill in coming together for a conversation focused on the long-term sustainability of the city, and not immediate short-term goals," said Mary Hines, president of Carlow University and chairwoman of the Pittsburgh Council on Higher Education.

A broad-based coalition could include not just universities, but other tax-exempt groups, she said. It could work with the city to find "strategies to ensure the long-term sustainability of the city. ... Give it a period of time, maybe six months, to accomplish something."

If that happens, it will be a turnaround from more than a month of tension since Mr. Ravenstahl's Nov. 9 proposal of the tax, which he said the city needs to replenish a pension fund that contains just 31 percent of the assets it should.

University, corporate and elected leaders have come out against the tax. Yesterday, Carnegie Mellon University President Jared Cohon wrote to council members saying the tax vote presented "a choice between preserving our reputation as a place of innovation and a city of the future, or sending the signal that we have allowed parochialism and myopia to overtake our vision and imagination."

Councilman William Peduto predicted a pre-Christmas coming-together of the universities and city leaders, and said the tuition tax really just delayed it.

"I think we could've gotten there in October, if we just would've asked [the universities]," he said. "We could've avoided all of this drama."

Council President Doug Shields said he hoped it would lead to a town-gown push for sharing of taxes between cities and suburbs, mergers of thousands of municipal pension plans and a statewide municipal employees' health fund.

Council tentatively approved a $446.5 million budget for 2010, which doesn't contain the tuition tax, any other tax change or any significant changes in services.

City Finance Director Scott Kunka said the budget isn't ideal, because the city had to adjust it to account for removal of the tuition tax revenue, at the insistence of the state-picked Intergovernmental Cooperation Authority. It instead draws $4.1 million from an account created to lower future debt payments, boosts revenue estimates and counts on savings from better accounting, among other measures.

Some of the quick fixes are speculative, Mr. Kunka confirmed. "We're going to have to make decisions on the fly, so to speak, as we move forward throughout the year."

Council made minor changes to the budget, voting to create a new position to sell sponsorships of city facilities and events. The eventual Finance Department staff member will be charged with raising $500,000 in private sector payments next year.

Council also approved a $54 million capital budget, including federal aid, but only after Councilwoman Darlene Harris shifted $2 million from general demolition and neighborhood improvements to specific North Side projects.

She said she did that because projects in her North Side district have been delayed, leading to the accumulation of 279 condemned homes and the May demolition of the long-neglected Davis Avenue Bridge. She doesn't want the Wilksboro Bridge to suffer the same fate.

A final vote could come Monday. Council also meets Dec. 29, likely the last opportunity to pass a tuition tax before the legislation would die as a council with two new members takes office.


Rich Lord can be reached at rlord@post-gazette.com or 412-263-1542.


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