Ravenstahl Caves on Tuition Tax

From this mornings Pittsburgh Post-Gazette, via The Pittsburgh Comet,

Pittsburgh Mayor Luke Ravenstahl has asked city council to shelve his proposed tuition tax, saying instead that a broad-based "New Pittsburgh Coalition" will work to solve the city's pension problem.

The mayor is willing to cancel the tuition tax vote that could have occurred today in spite of the fact that he can't claim to have landed the $15 million-a-year needed to right the pension fund, nor the $5 million compromise demand he made earlier this month. "This is a leap of faith for all of us," he conceded, but if successful, it will bring the needed funds -- hopefully in time for the 2011 budget, when the city will otherwise face a dire fiscal situation.

Ravenstahl, it appears, has played his hand very poorly. I think most observers saw the tuition tax as means to leverage more money out of the city's universities. Ravenstahl should not  have caved on the tax without a binding commitment from those schools to pony more money in lieu of taxes.


Technorati Tags: Tuition Tax, Pittsburgh, Ravenstahl, in-lieu-of-taxes

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More Movement on the Non-profit Taxation Front + a Bonus Video

Another development in the battle to get non-profits to carry their weight from State Senator Wayne Fontana who

...said today that he will introduce legislation allowing municipalities to charge tax-exempt institutions a fee based on their property holdings.

Mr. Fontana said it would allow municipalities to negotiate voluntary payments with universities, hospital systems and other large institutions that aren't subject to property taxes. If that failed, the municipalities could charge them a services fee based on their buildings' square footage. A tax-exempt institution's first 50,000 square feet of floor space would be exempt, but any space above that would be assessed at $100 per 1,000 square feet.

"It's my opinion that they have a financial obligation to the city or the municipality for the services that they get," Mr. Fontana said. "They have vast amounts of real estate that they have accumulated."

The Penn State University Park campus has 19.7 million gross square feet which comes out to a fee of $1,965,000. Eleven years ago Graham claimed that

...Penn State has voluntarily agreed to provide the State College Area School District and 5 local municipalities more than $1 million per year in lieu of taxes.

I'm looking for a more official and up-to-date number on Penn State's in-lieu-of-tax payment, but it doesn't seem, from this,  as if this proposal by Sen. Fontana would be such a good deal for the Centre Region.


Technorati Tags: Penn State, tax-exempt, in-lieu-of-taxes, Pennsylvania

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A Zig While We Were All Waiting For the Zag

A new development in the battle between Pittsburgh government and the city's nonprofits occurred earlier this week. Forget about taxing tuition or a fee for county services this is big news.

Legislation quietly introduced Tuesday in Pittsburgh City Council gives the city's nine lawmakers veto power over almost all new construction by big tax-exempt institutions -- effective immediately.

Can you imagine the State College Borough Council telling Graham and the boys in Old Main they can't build any new toys until they begin to pony up some more bucks? Wow!

A hat tip to the Pittsburgh Comet which has the inside baseball details on this move. It's a good read.


Technorati Tags: Penn State, nonprofits, Pittsburgh, in-lieu-of-taxes, building permits

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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.


Technorati Tags: Penn State, Pittsburgh, nonprofits, tuition tax

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A "Fee"-ture Story

I wrote a few days ago that Allegheny County was having second thoughts about imposing a fee on tax-exempt organizations. The Allegheny County Council made it official today.

Nonprofits will not have to pay new fees after Allegheny County Council backed off its essential services fee proposal Tuesday.

Council voted unanimously not to override County Executive Dan Onorato's veto of the plan, despite the fact members had passed it without opposition Nov. 4. Citing anger over UPMC's decision to close its Braddock hospital, they had agreed to collect about $13 million annually from large nonprofit property owners for the public safety and works services they receive.

The bill is essentially a tax and therefore illegal by state law to levy on nonprofits, council solicitor Jack Cambest told council before its vote....

But

...[s]everal council members said they plan to keep searching, possibly with Pittsburgh officials, for a legal way to get money from the region's growing nonprofit community.

So it a good idea for the folks in here in Centre County to keep an eye things down there around the 'Burgh.

One particular thing that bears watching is a proposal by Pittsburgh Mayor Luke Ravenstahl to tax college tuition, which appears to have support of the City Council.

Technorati Tags: Penn State, in-lieu-of-taxes, tax-exempt, Pittsburgh

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Pushing the Boundaries Not of Knowledge, But of Acceptable Behavior: The Penn State Way

From today's Collegian comes news that Penn State has infringed on a trademark held by the Phoenix Coyotes of the NHL. The term "White Out" which refers to fans attending sporting events decked out in white was originated by the hockey team in 1987 when they were the Winnipeg Jets. The team notified the University last year that the use of the phrase by Penn State was a trademark infringement, but agreed to allow the University to use the phrase once this year. So, Penn State decided to modify the phrase to "White House". Guess what? According to Steve Weinreich, vice president of general counsel for the Phoenix Coyotes,

[A]ny variation on the term for marketing purposes is "in violation of the law," restricting certain posters, advertisements and garments around campus.

"As of last year, when we spoke with representatives from the university, they understood that they could use it one time," he said. "We had an agreement, and now they are apparently not living up to what they say."

The fact that Penn State isn't living up to its end of the agreement shouldn't come as any surprise to my readers. There is a long list of deals which Penn State has reneged on. The most notable is the deal which guaranteed that the Dickinson School of Law would remain in Carlisle in perpetuity. There is also the, as of yet unresolved, court case brought against Penn State by Centre County which claims that Penn State isn't living up to its end of an in-lieu-of-tax agreement. For Penn State it isn't about what is right, it is about what it can get away with. You don't think so? Greg Myford, associate athletic director of marketing tells us as much.

Trademark or not, Myford said a "White Out" is an object of school spirit, rather than a legally owned commodity.

"Frankly, our students and fans have already taken ownership of the term, so even if Penn State were not able to use the phrase legally, simply planting the seed with students to wear white at a designated game would be enough to get them spreading the word of an upcoming White Out," Myford said.

Of course, there is also the matter of hypocrisy in this story, an important component of the Penn State Way, which ,to her credit, Collegian reporter Lauren Boyer takes note of.

Weinreich said the term "White Out" is also a part of his company's legacy and equated it to another team calling themselves the "Nittany Lions" and bearing the same blue-and-white logo. In fact, this happened recently when a Morganton, N.C., high school was called out by the Collegiate Licensing Company for bearing an emblem "confusingly similar" to Penn State's trademarked lion head.

But Myford said the future use of "Penn State White Out" is different than the recent controversy surrounding the trademark infringing by the high school. "Them using our logo is basically someone else using copyrighted or trademarked material that has already been granted to someone else," he said. "Us using 'White Out' is making a claim for Penn State to be granted use of the term because the term currently isn't spoken for."

Why anyone has still has any pride in this university is beyond me.

Update: I almost forgot that Graham has been a strong voice in opposition to P2P file sharing of music on campuses and has often said that it is the responsibility of colleges and universities to teach students about the morality and legality of such activity. For example,

For colleges and universities, the decision in Grokster can be both a catalyst for renewed attention as well as a wake-up call to those colleges and universities that have yet to engage the issue. Specifically, we suggest that administrators consider the following:

Inform students of their moral and legal responsibilities to respect the rights of copyright owners.

Or this,

Yet despite these educational efforts, despite our compliance with the Digital Millennium Copyright Act, and despite our technical interventions, it is probably fair to say that thousands of our students illegally download some amount of copyrighted material.

They are typical of college students nationally in this regard and are party to a practice that is morally wrong, is damaging to the entertainment industry, and is inconsistent with the values of honesty and integrity that students more typically profess.

This is just more of the Penn State Way.

Technorati Tags: Penn State, Football, hypocrisy, bad faith
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Theives Tend to Be Indigent When They Are About to be Revealed

Today's CDT has a story which places a bit of Graham's indigent testimony on Monday in a new light. Here is what Graham told the State Senate,

Senate Bill 1 will severely limit the University's opportunity to enter into contracts with outside entities that do not permit the terms of their agreements to become public due to competitive concerns (examples include our lucrative partnerships with Nike, Highmark, Pepsi, Barnes and Noble, and others).

Read this carefully. He is not concerned about the public finding out how much Penn State gets from these contracts or what they give in return should a new Right-To-Know law cover the University. He is concerned that Penn State won't be able to be able honor secrecy agreements with corporations should it be covered by a new Right-To-Know law. It about honoring agreements. The CDT story put the lie to this.

Penn State has an in lieu of real estate tax agreement with Centre County. Today Mike Joesph reports in the CDT that,

After months of being "polite," Centre County's government has formally notified a top Penn State administrator that the university has breached a financial agreement for payments in lieu of real estate taxes.

In a May 3letter from county solicitor Louis Glantz to Gary Schultz, Penn State senior vice president for finance and business, the county gives the university 60 days to pay almost $270,000 in payments in lieu of taxes on a visitors center, a book store and a restaurant or face "all available legal and equitable remedies.

[...]

The letter advises Schultz of a "a "serious breach" in the "amended settlement agreement," an agreement between Penn State, State College and the townships of Patton, Ferguson and Harris for Penn State payments to taxing authorities in amounts equal to real estate taxes but called "in-lieu-of tax payments.

"In order to determine the amount of payment, the agreement says, Penn State "shall provide the county a copy of the description of real estate contained in a lease within 30 days of the execution of the lease and shall submit to the county the information required by law for the establishment of the assessed value of the leased real estate ... ."

[...]

Boyde said the "amended settlement agreement" calls for the university to provide lease information to the county so that the county, not the university, can determine whether what has been leased is taxable.

Exarchos and Boyde said Glantz has been discussing the issue with Penn State officials since February, but the talks have gotten nowhere.

Boyde said the Board of Commissioners took the step to formally notify the Penn State administration because "it finally got to the point where we were tired of asking."

"We tried the polite ways and it doesn't seem to be working," Exarchos said. "How many other leases that they have not turned over are there that we are not aware of?... It dawned on me and us that there are monetary consequences here by their not living up to the settlement agreement."Glantz said Friday that in discussions Penn State has sought to defend its decision not to provide lease information by making a distinction between leases and "operating agreements."Asked what's the difference, Glantz said: "You tell me."

Penn State was required by the in lieu of tax agreement to turn over all lease agreements to the County. It then violated this requirement with a semantic game. It started to classify the lease agreements as "operating agreements" and then didn't turn them over to the County. This could happen because there is currently no legal requirement for Penn State to make these agreements public regardless of what Penn State decides to call them.

The specific lesson to take away from this is the need for new stronger Right-To-Know which covers Penn State and other state-related universities. The broader lesson is that Old Main cannot be trusted.