Wednesday, November 18, 2009

Pittsburgh Tuition Tax Proposal is Still Alive

The despite the  reported demise of a proposal by Pittsburgh Mayor Luke Ravenstahl to tax college tuition it is in fact alive and well
Tuition tax battle lines began to emerge on Pittsburgh City Council today, as Mayor Luke Ravenstahl's Philadelphia legal gun laid out the case for the levy and encountered a conflicted council.
"When you tax post-secondary education, you are taxing something that is extra, that is beyond the basic requirement," said [Joseph C. Bright, former chief counsel to the state Department of Revenue who was brought in by the administration to add heft to its argument that a 1 percent levy on tuition is legal.]. "Is college essential in an economic sense? ... Not in the same sense" as education through high school.

Mr. Bright said the city is "going to win" a likely court fight over the tax, since state law gives municipalities broad power to tax "privileges," and nowhere excludes higher education. He said a tuition tax isn't a sales tax -- state legislation is needed to levy those -- nor is it preempted by a statutory ban on taxing admissions fees charged by nonprofit organizations.

"Tuition is not an admission fee, plain and simple," said Mr. Bright.
The problem this is tax is intended to address is one that the Centre Region faces as well.
"Property that was [previously] taxed was bought up by nonprofits, so that they could increase and be larger and larger," said Councilwoman Darlene Harris. Now there is no tax revenue from those properties. "Our residents are just struggling. I know I get complaints all the time that this isn't fixed and that isn't fixed. They're looking at the buildings that we have, and we can't [fix] it" because the city lacks money.
In other news from the nonprofit front,
Pittsburgh City Council today gave its initial approval to legislation to study the value of property held by tax-exempt institutions, estimate the cost of protecting and serving college and university students and then enter into negotiations for voluntary payments in lieu of taxes.
The 'Burgh may pave the way for the Centre Region.

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