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Ravenstahl defends his proposal for tuition tax
Wednesday, November 11, 2009

Pittsburgh's proposed 1 percent tuition tax is just a nibble compared to the bite that college fees and tuition hikes take out of student and parent wallets, Mayor Luke Ravenstahl argued yesterday, as questions surrounded the unique levy he proposed Monday.

The mayor's attack on tuition and fee hikes came hours after eight leaders of local post-secondary schools gathered to blast the mayor's higher-education tax plan, saying it's illegal and would hurt the institutions' competitiveness. Mr. Ravenstahl said that if there's a competitiveness issue, it's the schools' fault.

"There isn't an institution in this city in the last five years that hasn't raised tuition, and in each and every case, the tuition hike has been far greater than 1 percent," Mr. Ravenstahl said. The city's proposed addition to the school bill "falls right in line with orientation fees, with transportation and security fees, with lab fees" and more nebulous charges that colleges could reconsider, he said.

The higher education leaders hope for rejection of the tax by City Council, which has been asked to pass a $453.8 million budget that includes $16.2 million from the tuition tax.

"We don't think it's going to pass, because we believe it is illegal, and if it does pass, we will have to do whatever we need to do" to oppose it, said Mary Hines, president of Carlow University and chair of the Pittsburgh Council on Higher Education. She did not rule out a court battle or a push to get the General Assembly to nix the tax.

The tax -- meant to help fill a $600 million hole in the city's pension fund and aid the Carnegie Library System -- must be certified by the city controller and approved by the state-picked Intergovernmental Cooperation Authority. Likely to end up in court is the question of whether the state must approve it.

Right now, though, the battleground is the court of public opinion.

"We're all about helping the students to receive affordable, accessible education," said Dr. Hines, after a news conference of college and university leaders. What would be the first tuition levy in the nation, "takes away our competitive advantage in attracting students to this area."

Mr. Ravenstahl later presented charts showing annual 4 to 6 percent tuition hikes and fee increases.

"If that increase, that $1,000 increase [this year] at Carlow and $1,300 increase at Carnegie Mellon University, didn't ruin education in Pittsburgh, certainly our 1 percent tax won't ruin education in Pittsburgh," he said.

He also pointed an accusatory finger at the add-ons that appear on college invoices, like the University of Pittsburgh's $160 "student activity fee," CMU's $192 "orientation fee," so-called "college fees" of $460 at Point Park University and $320 at Chatham University, and Carlow University's $866 "support service fee," as described in a list the administration generated.

"He doesn't have exactly a clear view on what the fees are that we charge," said Dr. Hines.

Some campus officials said Mr. Ravenstahl's criticism of college fees was misleading.

The list of fees assembled by the administration included eight fees charged by Duquesne University, the largest of which were a $2,083 university fee for such things as campus police, counseling and career services, a $1,042-per-semester M.B.A. sustainability fee, a $650 parking fee and a $330 per-semester Law School fee.

Duquesne spokeswoman Bridget Fare said the mayor's list included fees that only a subset of students are charged, like the M.B.A. sustainability charge for overseas study in that program.

"An unlawful privilege tax cannot be justified by comparing it to fees that students pay to their campuses for programs and support services," she said. "This is an attempt to divert attention form a proposal to fix the city's budget problems on the backs of college students."

Carlow University's $866 support service fee is only charged to full-time traditional day students and not to part-time or adult learners, spokeswoman Louise Sciannameo said. It's for various services including computer use, career services, library access and tutoring, among others.

"Our charges are related directly to the services our students receive and are directly tied to their educational outcomes and goals," she said. "We believe that these fees are reasonable."

CMU spokesman Ken Walters said university fees support essential campus services, and in some cases are the result of student referendums.

In a pronouncement that could complicate final passage of the 2010 budget, Controller Michael Lamb said he's not yet convinced that the tax can be enacted without state approval.

"It remains questionable to me whether or not we have the authority to create a tax," he said, "that is basically taxing a fee at an institution, so I'm not sure you can do that." A legally questionable tax could be tied up in court and blow a hole in the budget, he said.

He said the better course of action would be to ask the General Assembly to approve an expansion of the city's payroll preparation tax, which currently applies only to for-profit companies, and extend it to tax-exempt institutions but at a lower rate.

Deputy City Solicitor Ron Pferdehirt said that the state Local Tax Enabling Act allows cities to tax "privileges," and doesn't bar a levy on tuition. Mr. Ravenstahl said the only way to test the tax's legality is to try to enforce it, and fight for it in court.

If Mr. Lamb doesn't certify the reasonableness of the administration's projection that the tuition tax will raise $16.2 million, the state-picked Intergovernmental Cooperation Authority could refuse to give final approval to the budget. That could theoretically result in a state seizure of some city revenue.

Authority Executive Director Henry Sciortino said his board hasn't approved or disapproved the tax. "We continue to urge the city to maximize its operating efficiencies as its highest priority, and put forth all efforts to become the most efficient it can, before they go after new revenue," he said.

Harrisburg officials offered differing views on whether state approval is needed to tax tuition.

State Sen. Jeff Piccola, a Republican and chairman of the Education Committee, said the tax needs the state's approval and won't get it if he has his way.

"When times are already tough for students and families, why would we add to this expense and why would Pittsburgh put itself in such a disadvantage, particularly to tax an enterprise (higher education) that is actually working in their city?" he wrote in an e-mail response to questions.

But Bob Kassoway, executive director of the House Finance Committee, under Democratic control, said the city probably doesn't need state approval, noting that the Local Tax Enabling Act's nickname, decades ago, was "the tax anything act."

Rich Lord can be reached at rlord@post-gazette.com or 412-263-1542. Bill Schackner can be reached at bschackner@post-gazette.com or 412-263-1977.
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First published on November 11, 2009 at 12:00 am