City fiscal crisis results in raised job tax
by Louisa Kinoshi
Student workers returning to part-time work this year face a five fold increase in an annual occupational tax. The new occupational tax, now renamed the Emergency and Municipal Services (EMS), has increased by $42 from the former annual $10 occupational privilege tax imposed on all workers in Pittsburgh.
The city council?s resolution was no surprise considering the recent financial turmoil the city of Pittsburgh has been facing. The EMS tax is one of the recent steps the city has been taking to rectify its financial problems. Last November, Carnegie Mellon students were affected by a proposed PAT cutback which would have ended all weekend Port Authority bus service, as well as weekday transportation after 9 pm. The city has also had to decrease spending in education, the fire department, the police department, and road maintenance.
?Pittsburgh has to find other ways besides taxes. The city is known for its railroad system and tourism. I don?t like the tax but maybe it?s for something good,? said Jonathan Perry, a sophomore psychology major. Diane Ghogomil, a high school senior at Allderdice High School who works at the information desk, is more sympathetic towards the tax. ?I understand being from Pittsburgh and seeing the distress. I am not bitter about it.?
The EMS tax was originally billed as a dollar-a-week tax, in order to help cities pay for police and fire protection, road maintenance and property tax relief. The city council?s $417.5 million budget for 2005 does not include city money budgeted for street repairs and capital improvements.
Effective January 1, 2005, all Carnegie Mellon employees will incur a $52 deduction from their first paycheck in January of each calendar year, or from their first paycheck if hired later in the year. Those who do not make up to $52 in their first paycheck will receive zero net pay and the balance will be withheld in subsequent paychecks.
Colleen Bendl, director of Payroll Services, explains why the university chose to collect the entire $52 from the first paycheck instead of dividing it among two paychecks of $26 each. ?Payroll Services chose to deduct $52 because of the pay frequency of monthly versus biweekly pay installments. The tax resolution was just finalized and we did not have much of a chance to make changes to our system. We will be looking at it this year.?
Most student workers fall into the lower income bracket, which is defined as those workers making under $12,000 a year, and can file for a $42 return at the end of the year. To file a claim, a worker must file an EM-1 form with the city and provide a federal income tax return showing earned income, as well as a copy of a W-2 form. Refund forms are available online at the city?s Web site: www.city.pittsburgh.pa.us/finance. Forms can also be picked up in the City Finance Department downtown. The forms will be mailed to those who call the finance department at (412) 255-8821.
?I think they should exempt college students regardless because there is no way any of us will be making more than $12,000 a year,? said Valerie Savage, a first-year history major and housing office assistant. Kristine Rodriguez, a desk attendant and professional writing graduate student, will probably not file for a return since she will be graduating in May. ?Fifty-two dollars is a big hit for college students, and I feel bad for freshman and upperclassmen that will have to keep paying the tax in subsequent years. There has been a decline in the city and it?s sad. Campus provides a lot of revenue, so why do college students have to pay??
Occupational tax increases have also been proposed in several cities and counties outside of Pittsburgh, including Philadelphia.