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Tuition tax will not be pursued

The city of Pittsburgh will no longer pursue the tuition tax. However, the state has stepped in with its own proposed nonprofit tax. (credit: Celia Ludwinski/Photo Editor) The city of Pittsburgh will no longer pursue the tuition tax. However, the state has stepped in with its own proposed nonprofit tax. (credit: Celia Ludwinski/Photo Editor) On Dec. 21, Mayor Luke Ravenstahl announced the end of the city’s pursuit of the proposed “fair-share” tuition tax, which would have resulted in a 1% tax on the tuition of Pittsburgh’s college students.  (credit: Celia Ludwinski/Photo Editor) On Dec. 21, Mayor Luke Ravenstahl announced the end of the city’s pursuit of the proposed “fair-share” tuition tax, which would have resulted in a 1% tax on the tuition of Pittsburgh’s college students. (credit: Celia Ludwinski/Photo Editor)

As a new semester begins, the city of Pittsburgh continues to search for a way to fill its budget void. Mayor Luke Ravenstahl announced Dec. 21 the end of the city’s pursuit of the “fair-share” tuition tax on Pittsburgh’s college students, leaving a $15 million budget hole unresolved. The state has proposed a new solution through a statewide property tax and service fee for all nonprofit organizations, including all of Pennsylvania’s colleges. Like the tuition tax, this proposal has already been met with criticism from Pittsburgh colleges.

The original proposed “fair-share tax” would have added a 1 percent tax on tuition from each of Pittsburgh’s colleges, or about $400 to Carnegie Mellon’s annual tuition. It was proposed in order to fill a void in the city budget for pensions and the Carnegie Library of Pittsburgh system. If enacted, it would have been the first tax on college tuition in any city in the nation.

Students were relieved to hear that the tax was officially off the table.

“I’m glad that we prevailed, and I’m very grateful that the city council stood up to [the mayor],” said Natalie Morris, a sophomore physics and computer science major, as well as a Student Senator.

Another Student Senator and sophomore business administration major, Toro Adeyemi, spoke of her surprise that the tax was dropped.
“Even though I and student government and other individuals fought so hard so that the tuition tax would not take place, ultimately I was surprised the tax was dropped,” Adeyemi said.

In their efforts to oppose the tax, students started websites, submitted petitions, made phone calls, attended city council hearings, and joined with Pittsburgh’s other colleges to make their views known.

According to the Carnegie Mellon Student Senate, there were over 1000 petition signatures at Carnegie Mellon alone, and over 10,000 signatures at all the Pittsburgh schools combined. Students were a constant presence at city council meetings. At the public hearing on the tax, the Pittsburgh colleges sent over 40 student speakers, along with additional supporters, and the room had standing room only.

“When I was at the city council meeting, none of the members wanted to punish students or thought this was the best option. Actually, they thought that it was closer to their only option,” said Corrine Walters, a junior computer science and HCI double major. “It just required some induced creativity and a bit of backlash for the mayor to drop it.”

In a Dec. 21 e-mail to the Carnegie Mellon community announcing the end of the proposed tax, Carnegie Mellon President Jared L. Cohon expressed his interest in working with the city to help it address the budget void.

“With this bad tax idea behind us, we look forward to working with the city to address its fiscal problems and to restore Pittsburgh’s forward momentum,” Cohon stated.

With the tax pursuit officially over, the state has now stepped in. Senate Bill 1175 would institute a tax on nonprofit organizations based on their amount of property, as well as an essential services fee. A hearing on the proposed bill was held last Tuesday with the Pennsylvania Senate Democratic Policy Committee.

The Pittsburgh Council of Higher Education (PCHE) immediately spoke out against the bill. Carnegie Mellon is in line with this position. Cohon and Pittsburgh Theological Seminary President William Carl put out a press release on behalf of the PCHE on Jan. 12 expressing their views.

“The legislation is grounded in two false perceptions,” they stated. “The first false perception is that colleges and universities drain services while providing no return to the city.... The second false perception is that expanding universities are converting tax-bearing property to tax-exempt status, eroding Pennsylvania’s tax base.”

The press release cited legislation supporting the tax-exempt status of nonprofit organizations. It mentioned legislation dating back to the Commonwealth’s constitution, adopted in 1874, as well as the more recent Pennsylvania Act 55 of 1997.

“While we acknowledge that our government leaders need to find a way to stabilize our city’s finances, taxing colleges and universities is not a good way,” said Teresa Thomas, assistant vice president for media relations at Carnegie Mellon.

Thomas, Carnegie Mellon, and the PCHE remain committed to the opposition of the tax.