Today witnessed the pomp and pageantry of Mayor Luke Ravenstahl's annual budget presentation to City Council. And as first reported in today's Post-Gazette, the linchpin was a sure-to-be-controversial tax on college students.
The tax would be a 1 percent levy on their tuition (room and board would not be counted). A Pitt student, for example, would be paying about $135 a year -- with Carnegie Mellon students paying more, and CCAC students paying far less.
Ravenstahl couched the matter in terms of fairness -- to the point of calling this the "fair share" tax. (The official name is the "Post-Secondary Education Privilege Tax.") And he played, none too subtly, on the town-and-gown fissures that tend to afflict any college town. (Hear an edited version of his remarks on the tax here.)
He invited us to consider the tax burden borne by "Larry from Lawrenceville" -- and even city councilor Bill Peduto -- to help provide services to college students. Ravenstahl even got a laugh out of the crowd when he imagined South Side councilor Bruce Krause -- justly renowned for focusing on quality-of-life concerns -- calling the police when students got "rowdy" on the South Side. Who paid for the need to provide fire protection to college kids, and to "clean up the mess," Ravenstahl asked? We do.
Yeah! Cutters rule!!!!
Whatever else it is, it's smart politics. Ravenstahl had previously floated the idea of a bed fee for hospital patients. Not only did that seem cruel -- taxing sick people was "offensive," his independent challenger Kevin Acklin complained during the campaign -- but it didn't make much sense. These days, hospitals are booting people out of their beds as quickly as possible, so the average patient isn't around for very long. But college kids are here for months at a stretch, and they tend to draw attention to themselves more than people on respirators do. Bruce Kraus isn't the only person in town who remembers the couch-burnings that took place in Oakland earlier this year.
And quite apart from the politics, there are some pragamatic arguments in favor of this idea too. For years, we've heard about how commuters don't "pay their fair share" of city taxes. But even commuters tend to only be here from 9 to 5. Students, by contrast, are here 24 hours a day. And while the "poor college student" is always a sympathetic figure, the fact is a) they always seem to have money for beer, and b) as Ravenstahl pointed out, their institutions of higher learning already jack them up for a variety of fees.
That said, city councilor Bill Peduto pointed out on serious drawback to the proposal: "The big question is whether this is legal."
Under state law, the city has the power to levy a variety of fees if it wishes. But it doesn't have the power to create a brand new tax. And Ravenstahl is structuring this as a tax -- a levy indexed not on the cost of providing the service, but on the ability of a person to pay it. Peduto's initial take is that if the levy were structured as a fee -- a lump sum of, say, $150 a year -- it might be easier to defend in court.
"The universities already realize that," Peduto warned moments after Ravenstahl's speech, "and I don't think you need a crystal ball to know what their response will be." If the courts toss the tax out, he notes, it will blow a $15 million hole in the budget.
(There's already speculation that the city will argue that a levy on students isn't much different from the city's $52 a year occupation tax. Being a student, after all, is a form of occupation. But you can already see two objections being raised to that. First, most occupations pay you for the work you're doing, whereas students pay for the privlege of being enrolled. Second, even the occupation tax is structured as a lump sum -- and the city couldn't raise that amount without state approval.)
But Peduto agreed that something has to be done about getting more money from non-profits: Taxing students "misses the target," he said, but sooner or later a solution needed to be found. Asked where the city would get $15 million in the meantime, and Peduto said, "I don't know."
The problem, he said, is that "I haven't seen the big non-profits at the table" -- and council hasn't been either. Until this morning, Peduto groused, he'd been hearing about a whole raft of revenue-generating ideas, including the bed tax.
But now that the discussion has begun, Ravenstahl is likely to find some people on council, at least, who are receptive to his ideas. Kraus himself seemed open to the possiblity of a student surcharge. He pointed out that during his campaign, he repeatedly insisted that big non-profit institutions were going to have to do more to help balance the city's books.
Kraus noted that he values students: "I'm tired of students always being talked about as a negative. They aren't a drain -- they are life reinventing itself, and I love having them in my district." He also credited the University of Pittsburgh Police -- the second-largest armed police force in Allegheny County, by the way -- for "doing so much to contribute to the peace and tranquility in Oakland." But when students hit Carson Street, he says, they are on their own.