Inside Higher Ed has more about Pittsburgh mayor Luke Ravenstahl’s extremely popular plan to tax tuition at the city’s universities 1 percent.
Here’s one strike against his arguments for the tax:
Beyond the challenges that municipalities face in trying to skirt tax-exempt status is the fact that many institutions do indeed make substantial contributions to their hometowns.
Colleges and universities, [Robert M.] Berdahl[, AAU’s president and former chancellor of the University of California at Berkeley] said, don’t try to be free riders in their communities. Many “do contribute offset money for things like fire, police, sewage and so on …. They try to calculate their fair shares.”
In Pittsburgh, PCHE’s Hines said, the 10 colleges and universities pay $23 million annually in taxes to the city for payroll, parking, business privileges and any real estate not directly related to their educational missions.
Some also make voluntary contributions to the city’s public service fund, she said, although “fewer organizations are participating” than have in the past. The University of Pittsburgh Medical Center system has redirected a $10 million annual contribution from the fund to Pittsburgh Promise, a program created by Ravenstahl to fund college costs for the city’s top high school graduates. Others have backed out “for financial reasons, some for philosophical reasons.”
This will serve as an important test case for other big cities around the country.