College Students, Welcome to Taxburgh

Fresh off his election victory, the Mayor of Pittsburgh has decided to take charge in dealing with the fiscal mess that is the City. No he hasn’t decided to cut spending. Instead he has found a new segment of the population to tax–college students. His plan is to tax college and university tuition at one percent in an effort to shore up the City’s runaway legacy costs. This of course sits well with one local newspaper that has yet to meet a tax it didn’t like, who editorialized that this is only fair since these students have the audacity to come into the City and use services.

The Mayor’s plan draws from Act 511, the state law granting permission to municipalities the right to tax certain privileges. For years the City has been able to tax the privilege of doing business as well as the privilege of working and earning a paycheck within its borders. The Mayor is now suggesting that going to school in the City is a privilege and should be taxed. The difference is that the business privilege and occupation privilege taxes are based on financial earnings and not on one’s sheer presence. What’s next, taxing the privilege of being buried in one of the City’s cemeteries? After all they already tax the living, why not go after the dead next?

And does anyone really think that this new tax would be the end of it? Recall that just a few years ago the City was granted the right to tax payrolls of for-profit firms and organizations and increase the occupational privilege tax (now called the local services tax) from $10 to $52 annually. This and the admittance of the City into Act 47 financial distress program was to help right the City’s finances. Apparently it has not happened and the City needs more help.

And why has it not worked? The City has not gotten to the root of the problem-it’s spending. It would have been nice if the Mayor would have used this creativity to cut expenditures. Without reducing spending and legacy costs there will never be enough tax revenue. But that is too politically unpopular and difficult to do. It’s easier to go after college kids who don’t vote.

The argument that these students use services such as building inspection without paying for them is preposterous. If the students live in off-campus housing, that housing and the landlords who earn rental income from these properties are paying taxes to the City and have every right to use building inspection services to keep them safe. If that is a major concern, increase the fees charged for these inspections. And many of these universities have their own police departments that handle the vast majority of crimes these students commit.

The notion that the City has already tightened its belt is patently absurd. What concessions have theyextracted from the public sector unions? What services have been privatized or contracted out with the County? Neither the Act 47 team nor the oversight board has held the City’s feet to the fire.

City officials are afraid to raise taxes on residents because they vote. But these residents are the primary beneficiaries of services, and comprise the vast majority of the City’s workforce and as such are the ones reaping the rewards of these legacy costs. Why should they not pay for such largess? Instead they will look to tax the non-voting segment of the population and make them the scapegoats for the City’s problems. And they wonder why few of these graduates remain in the City after their studies conclude. It’s probably because they don’t want to live in Taxburgh.