Pittsburgh To Tax Students

societyofrobots writes "Pittsburgh Mayor Luke Ravenstahl has proposed taxing college and professional students for the privilege of receiving an education in the city. The proposed tax will charge students in the city at a rate of 1% of their yearly tuition — which, at Carnegie Mellon, would mean roughly a $400 tax (PDF) on most students. As the tax proposal hit local media outlets this week, the mayor repeatedly emphasized the burden that college students have placed on city services, and the need for students to pay their 'fair share.'"

Comments

dumb idea

[lpaul55]

That's a way to dumb down the city.

Re:dumb idea

[Teancum]

That said, I disagree that this is bad policy. University students are (on average) priveleged, pay little rent/property tax, and use a lot of services. Waive the tax for scholarship students (or make the University pay it.) For poor students borrowing hundreds of $K to attend Carnegie Mellon - your bad decisions cannot drive policy.

Most educational institutions are tax supported, and by far and away it can be proven beyond doubt that a university in a town can make or break the town economically. University research, social networks (including fraternities, clubs, and even with graduating classes themselves), spin-off businesses, and even access to world-class talent to help work with municipal issues that come up from time to time.

My point is that those cities who think a university is a financial burden ought to consider what their city would be like without any institutions of higher learning. Discounting trolls who claim the city is simply going to devolve into ignorance (citizens can go elsewhere for college-level education and then return.... assuming of course that the kids going away to another town will return), the economic benefit to a city is so huge for having a university in the town that municipal (not state) funding of the university might even make some sense.

Few university students that I have met are so privileged as is implied here. Yes, there are some students who come from very wealthy families and flaunt their cash, but by far and away most students are struggling at or below almost any reasonable poverty guideline (most would qualify for Food Stamps and other social welfare programs), live in sub-standard high density housing, and tend to be engaged in activities that would not necessarily be a huge burden on a city in the first place (aka mostly using mass-transit and on a per-capita basis have a low carbon/energy footprint). Adding in volunteer work by students on the behalf of the community, and economic benefits in the form of internship, low-wage service jobs performed by students (aka staff in restaurants and other service-related businesses, and a ready pool of educated, intelligent employees willing to work for sub-par wages), it is obvious that most college students are effectively taxed anyway. Again, on a per-capita basis if you factor in off-campus housing, I would dare suggest that taxable income generated by a city in terms of property taxes collected for a similar group of people in the same economic/age group is very likely to be higher from college students than from non-college students. So from a pure fiscal standpoint it makes even less sense to impose an additional tax on students based on this rationale as well.

Ultimately a tax is a sign that the students aren't welcome in the community. This will ultimately be reflected in how the students will treat the community (rather harshly, I would suppose), and it would also be something that competing universities would gladly mention if they are trying to recruit students into their school (our town welcomes the students.... unlike Philadelphia who taxes them and wants them to leave).

Just the attitude alone is cause for concern, and would be room to recommend to a board of regents at any school in a city with this attitude to simply stop all capital improvements for its campus and reject any increase in the student population at that school as well. This should include state schools as well.

Student effect on economy

[DeadPixels]

While it's true that the students don't pay regular taxes like other residents, what about the fact that they bring a huge amount of disposable income and spend it in the city? The money goes to the local businesses, who in turn pay taxes on their revenue. Seems fair enough to me.

Re:Student effect on economy

[the eric conspiracy]

What do you mean students don't pay taxes like other residents? Do they get exemptions from sales and gas taxes? Do their landlords not pay property taxes that get included in the rents they pay? If they take jobs in the city don't they pay state income taxes that get partially recycled to the city?

Wrong!

[amiga3D]

Students bring tons of money into an area. This fool is going to drive the students to another city. Heh....I wonder if he talked it over with the Universities before he did it?

pay their 'fair share.'

[commodore64_love]

They already do shithead Mayor. Students pay:

- property tax (included in the school's tuition and the dorm room rental fees)
- sales tax (by buying local products)
- gas tax or road tolls (when they drive around)

This story reminds me of Baltimore City Council, which keeps trying to tax neighboring counties on the theory that suburban folks work in the city, or visit the Raven stadium, but don't pay taxes. (Except that they do - via state income tax and sales tax and providing income to stadium/restaurant/other inner city workers.) Same stupid first-order level of thinking. These politicians need to dig deeper.

Re:pay their 'fair share.'

[nycguy]

These politicians need to dig deeper.

They are...into your pockets.

Priorities

[six11]

As a CMU student (sort of), this doesn't surprise me, and I invite Luke Ravenstahl to kiss my poor ass. Considering this guy prioritizes money in the most bogo-riffic ways (e.g. spending hundreds of thousands of dollars on fancy trash cans sporting his name) it seems clear he is not and has not been fit to run the city.

Pittsburgh's new economy is fueled by the universities*. Everybody knows this. Taxing the students---those people least able to pay---is akin to cannibalism.

Of course, what will happen is students will just borrow a bit more and stack on a little more debt. So maybe Luke's idea is to get students to hedge their futures on his present financial problems.

* And the Steelers

Churches

[Stiletto]

Yet, we're still not taxing churches...

The whole story...

[sugapablo]

The problem is, in Pittsburgh the two major enterprises/employers are colleges and hospital systems. Both non-profit and both tax exempt. They own a tremendous amount of land (tax-free) employ the most people (tax free) and use up a tremendous amount of city services (such as police, ambulance, fire, water, sewage, etc, all tax free). The city has been trying for years to get the universities and hospitals to pay something, ANYTHING to help the city with its budget situation. In other cities where non-profits make up a large percentage of the area, the non-profits usually contribute something in terms of "voluntary payments", such as in Boston. What the mayor is doing, is trying to pressure the universities to come to the negotiating table to help support the city in its time of financial need, using other major cities with major university systems as a model. So far, the universities and hospital systems have refused. (Keep in mind, our major hospital system is UPMC (University of Pittsburgh Medical Center). Luke cares little for this tax and doesn't want it to pass. He want to use it to cause a big firestorm (which obviously it has) and force concessions. We'll see if it works. PA State Reps are already proposing laws to prevent the City of Pittsburgh from being able to tax students directly.

I will.

[NoYob]

(don't tell me how cutting taxes stimulates the economy and raises money and the laffer curve and supply side and fleeing jobs and all that... CA's economy has been "stimulated" in this manner for a generation, and it's still fucked.)

The problems that California have is the result of spending more that it earns. It's as simple as that. The economy was booming and tax revenues went through the roof because of it. Their tax policy, as far as income was concerned, wasn't too bad. Unfortunately, on April 15th in past years, the California legislature sees that huge pile of cash come in and they spent it thinking that California's boom will last forever. The Legislature, especially the liberal Democrats, have no clue about saving for the future or any clue that times do change and there are downturns in an economy.

Every time someone had some sort of project and regardless of its merits, they put money into it. Look now, when they want to cut spending, regardless of where, some special interest protests saying that they are important and the legislature needs to cut somewhere else.

If they had a responsible fiscal plan instead of spending every penny that came in they wouldn't be in this situation.

Laffer said that reducing taxes stimulates the economy as long as government reduces spending to match inflows. The California legislature was too stupid to realize that and they were too beholden to the special interests that always have their hands out for government money.