City, non-profits reach deal to avert tuition tax
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Pitt Chancellor Mark Nordenberg, left, flanked by Pittsburgh Mayor Luke Ravenstahl, comments on the city's agreement with non-profits. -
Duquesne Light's Morgan O''Brien, center, flanked by Pitt Chancellor Mark Nordenberg, left, and Pittsburgh Mayor Luke Ravenstahl, comments on the city's agreement with non-profits.
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Pittsburgh Mayor Luke Ravenstahl has asked city council to shelve his proposed tuition tax, saying instead that a broad-based "New Pittsburgh Coalition" will work to solve the city's pension problem.
The mayor is willing to cancel the tuition tax vote that could have occurred today in spite of the fact that he can't claim to have landed the $15 million-a-year needed to right the pension fund, nor the $5 million compromise demand he made earlier this month. "This is a leap of faith for all of us," he conceded, but if successful, it will bring the needed funds -- hopefully in time for the 2011 budget, when the city will otherwise face a dire fiscal situation.
The University of Pittsburgh, Carnegie Mellon University and insurer Highmark have pledged to make larger voluntary donations to the city than they did in the years 2005 through 2007, but neither they nor city officials would not say how much they will give, nor for how many years.
Mr. Ravenstahl spoke at a press conference in his office, flanked by several university leaders, six of the nine council members, and a handful of corporate leaders.
Pitt Chancellor Mark Nordenberg said the pension problem is "the product of what is becoming an increasingly distant past" involving bad long-term financial decisions. "The responsibility for dealing with that problem now is ours."
Morgan O'Brien, CEO of Duquesne Light, said the city needs "significant legislation in Harrisburg" to repair its finances. Mr. Nordenberg added that legislation needed by the city might benefit other cities statewide.
"The likelihood of getting that done is better than it was two months ago," said Mr. Ravenstahl.
CMU President Jared Cohon thanked staunch tuition tax foes Council President Doug Shields and Councilman William Peduto, who were not in attendance at the press conference.
Mr. Ravenstahl introduced the 1 percent tuition tax proposal in his Nov. 9 budget address. He argued then that the city needed the estimated $16.2 million a year it would generate to support a $15 million annual boost in the contribution to the ailing pension fund, and to back the Carnegie Library of Pittsburgh. He said then that students and tax-exempt institutions weren't shouldering their fair share of the burden of supporting the city's operations.
But the state-picked Intergovernmental Cooperation Authority forced him to remove revenue from the tax from the 2010 budget, saying it was too speculative. State Rep. Paul Costa, D-Wilkins, introduced legislation to preempt the levy. And the bare majority of council members who said they'd vote for the tax showed signs of instability, with two members, Theresa Smith and Tonya Payne, embarking on a desperate attempt to find a middle ground and avoid a vote.
First Published December 21, 2009 8:27 am
