State auditor general flunks proposed tuition tax
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State Auditor General Jack Wagner, a gubernatorial candidate, said today that Pittsburgh's proposed tuition tax is a poor solution to the city's pension problems.
"What we're really doing is asking a select group of people to fund a specific entity of government -- in this case, pensions," said Mr. Wagner, whose office audits municipal pension funds. "It makes colleges in the city of Pittsburgh a little bit uncompetitive in comparison to their counterparts."
Mr. Wagner said it's a particularly bad time for a new tax.
"People are hurting. No matter where you go in Pennsylvania, the average person is doing everything they can to reduce expenses. It is not a time to increase taxes."
Mr. Wagner's son is a student at LaRoche College, which is outside of the city and wouldn't be affected by the tax.
Mayor Luke Ravenstahl is urging City Council to vote tomorrow on a 1 percent tuition tax, expected to raise the $15 million a year the administration believes it needs to shore up a pension fund that contains just 31 percent of the $899 million it needs to cover future obligations. His efforts to convince the universities to lead an effort to raise $5 million in contributions from tax-exempt institutions has failed so far.
Mr. Wagner said his office is scheduled to audit the city's pension fund next year, and it will focus primarily on the use of state aid, rather than on any issues related to the tax, to improve the fund. He said the state should mandate consolidation of the 2,600 municipal pension funds "down to under 100" rather than perpetuating a system that forces cities and towns to struggle to manage their own funds.
First Published December 15, 2009 12:57 pm
