Wednesday, December 23, 2009

Pittsburgh Won't Tax Tuition; Nonprofits to Donate

As I explained in this blog entry from early last week, the city of Pittsburg, PA had been considering a first-in-the-nation tax on college tuition fees. Fortunately, the city’s officials have decided not to move forward with this highly unpopular tax increase. According to the Associated Press, they ditched the tax after two universities and a nonprofit health insurance company agreed to make large financial contributions to the city.

Mayor Luke Ravenstahl hopes the contributions from the University of Pittsburgh, Carnegie Mellon University or Highmark Inc. will serve as a catalyst to get other nonprofits to help the city financially.

Ravenstahl had called for the 1 percent tuition tax on the city's 65,000 college students as a way of getting money to help pay for some $15 million a year for the city's pension obligations.

Nonprofits are exempt from most taxes, but represent many of Pittsburgh's major employers and hold about one-third of the city's property value.

Neither the mayor nor the three institutions would disclose how much they would give, but Ravenstahl said he was optimistic the money would help resolve the city's long-standing financial problems.

"This is a leap of faith for all of us. The future of our city and our citizens is riding on it," he said.

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