Pittsburgh colleges launch anti-tax assault

Students used to send message about city proposal

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Doctoral student Daniel Jimenez is rehabbing his West Oakland home and paid $704 in property taxes this year. A campus peer, Candi Wills, volunteers for the Pittsburgh Children's Museum and supports Pittsburgh's arts and its sports teams.

Their earnest-looking faces and civic-minded stories are featured in newspaper ads that end with a jab: "But the city says I don't contribute."

The ads, placed by their school, the University of Pittsburgh, are part of a growing stand against Pittsburgh Mayor Luke Ravenstahl's proposed 1 percent tuition tax. But will it be enough to change minds in a city so starved for revenue that it shuttered firehouses in recent years and almost lost its neighborhood libraries?

The city's colleges are banking on it.

Even as hopes for a compromise were raised last week, a lobbying and public relations battle was well under way, pitting some of the city's most powerful institutions against the mayor and others backing what could become a first-of-its-kind tax in the nation.

College leaders make no secret that they are willing to sue, but victory in another court -- that of public opinion -- could render litigation unnecessary. So they have taken out print ads, marshaled data to support their belief that the tax is unfair and written to state legislators and local officials.

Before the mayoral election last month, with the city floating the idea of a student tax, government-relations representatives for Pitt asked City Council members to a meeting to discuss how nonprofits could help the city, said Councilwoman Theresa Smith. Pitt suggested to her and others present that it could use its considerable lobbying clout in Harrisburg to help the city find other sources of revenue, she said.

But a follow-up discussion with a representative of the Pittsburgh Council on Higher Education, which represents 10 city colleges, went nowhere, the councilwoman added. The day after the mayor's re-election, he met in his office with presidents from several of those campuses and suggested something that threw a chill into the meeting -- a tuition tax was increasingly likely, said Mary Hines, president of Carlow University and chairwoman of PCHE.

She said the college presidents stressed that it was a bad idea, and after the meeting broke, they huddled in a nearby office.

"We said no matter what happens, if the mayor moves in the direction of taxing us or our students, we have to move," she said. Within days, the mayor's tax was all over the news, and PCHE, a normally low-profile coordinating group, was quarterbacking what has become a full-frontal attack.

The group and its member schools branched out on various fronts, including a communications strategy involving ads with student stories that might evoke public sympathy.

Many students, already agitated by the cost of a college education, didn't have to be prodded. Since the levy was unveiled last month, they have packed City Council chambers to scorn the tax, submitted more than 10,000 petition signatures, and on one campus, Chatham University, staffed a phone and e-mail bank urging peers to lobby City Council.

"This has been a real lesson in democracy, that's for sure," said Chatham student Tiffany Tupper, 20, of Shadyside, who as junior class president is helping to organize students.

She discovered how interested her peers were when she returned to her computer after speaking out publicly against the tax.

"I got numerous e-mails from the student body saying, 'Way to go,' 'Keep it up,' and, 'We appreciate what you're doing,' " she said.

It was sympathy for some of those students and a desire to work with the colleges that led to council's decision Wednesday to postpone for a week a vote on the tax, Ms. Smith said. But as both sides prepared to meet Friday, the colleges' assertion that they could not hold substantive talks about the city's fiscal plight with the tax still on the table left Ms. Smith cold.

"They weren't talking before the tax was on the table. Now they're saying they can't talk because the tax is still on table," she said. "What makes us think they'll talk after the tax is removed?"

Friday, she described that day's talks as productive without elaborating.

The colleges' status as nonprofit organizations generally exempts them from paying property taxes that support city services, such as police and firefighting, and Mr. Ravenstahl says unless the colleges do more, he has little choice other than his levy on students. But colleges say they already have voluntarily given millions of dollars collectively to the city's coffers in recent years.

The 65,000-plus students who take classes in Pittsburgh bring vibrancy to the city, say campus leaders. Why drive those students away by putting up a financial barrier?

The tax would cost full-time students sums each year ranging from just over $400 at Carnegie Mellon University to roughly $20 at the Community College of Allegheny County.

"It's a test case. It would open a door that hasn't been opened in any jurisdiction," Dr. Hines said. "It's important to us to make the case here in Pittsburgh and get it resolved."

Five of the nine City Council members say they will vote for the measure, and four are opposed, a pretty small margin, Dr. Hines observed. "If we could get one more member ... ," she said.

"Our goal is to have it end at City Council. We're prepared to take the next step, should that happen, and that would be legal recourse. We would rather not do that. That would be a very protracted and expensive process."

Dr. Hines would not estimate how much the colleges are prepared to spend to defeat the tax. Mr. Ravenstahl, whose city faces a severe pension fund shortfall, initially hoped the tax would plug a $16 million hole in this year's budget, but an oversight panel forced the city to separate the proposed levy from this year's spending plan.

Over the years, colleges have shown they can be steadfast adversaries when challenged over taxes or other matters.

Washington & Jefferson College went to the state Supreme Court in 1997 to successfully quash a challenge by Washington, Pa., to its tax-exempt status. State legislation solidified the tax exemption for Pennsylvania campuses.

A 2004 vote by Point Park University faculty to unionize, which the school challenged, has languished ever since in federal court and before the National Labor Relations Board.

For almost a decade, Pitt defended itself against a lawsuit filed by employees seeking health insurance for their same-sex partners, and at one point, lawyers for Pitt challenged the validity of Pittsburgh's gay-rights ordinance, the statute under which the lawsuit was brought. Pitt ultimately decided in 2004 to grant the benefit, citing growth in the number of other schools already offering it.

Some say Mr. Ravenstahl will face an equally potent opposition. Already, some legislators in Harrisburg have indicated they will move to thwart the student tax.

Thomas Mortenson, senior scholar at the Washington, D.C.-based Pell Institute, sees the town-gown scramble over municipal taxation as symptomatic of something much larger: A painful but inevitable downsizing of the American lifestyle brought on by decades of taking on too much debt.

He said colleges, with their "country-club-like" campuses and "bottomless appetite" for money, will have to share in the downsizing.

But he also said it's hard to sympathize with any municipality that gets into trouble, as Pittsburgh has, partly by making future pension promises to employees that it cannot keep.

Who likely wins such a tax-policy fight?

"The colleges," he said. "They're rich and powerful and they serve the moneyed classes, and the moneyed classes tend to win these kinds of fights -- unless the city can make a very strong argument."

Other observers see it differently.

The notion that students in Pittsburgh can afford the tax, since they seemingly can handle tuition increases, ignores College Board data showing that inflation-adjusted tuition, once grant aid is factored in, has declined by nearly 9 percent over the past five years, according Tony Pals, a spokesman for the National Association of Independent Colleges and Universities, one of the education groups lining up to criticize the Pittsburgh tuition tax.

"The message being sent in Pittsburgh is at odds with what's been happening nationally to make college more affordable," he said.

Moody's Investors Service, which rates financial health of universities, said Pittsburgh's proposed tax highlights increased political interest in higher education that could present an increased regulatory and taxation risk.

But in a comment issued Monday, Moody's also said Mr. Ravenstahl's proposal would have little impact on the universities it rates "given the modest additional cost to students and the other credit strengths of the universities."

City officials say hosting the campuses carries significant dollar costs for municipal services. Dr. Hines said students did not create the city's fiscal problem but are being asked to kick in to help solve it, even though more than half of them are city residents, meaning they or their families already contribute taxes.

That unfairness is one reason Mr. Jimenez, 27, a graduate student government leader who is studying neuroscience, said he was willing to put his face on the ad. "We're already paying our fair share," he said.

Bill Schackner can be reached at bschackner@post-gazette.com or 412-263-1977.


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