Legislature must outlaw tax on tuition

Published: December 5, 2009

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Like every financially strapped city government in America, Pittsburgh's wants new sources of revenue. In their zeal to fund the budget without cutting services, city leaders have come up with a new tax on an old target, an inherently unfair tax that they would impose on people who are among the least able to pay it.

The idea is to impose a 1 percent municipal tax on college tuition. It's a bad idea in many ways.

The proposed tax has nothing to do with income; the levy is geared to tuition. All colleges have different tuition rates. Theoretically, the tax would compensate Pittsburgh for services consumed by the university. Is a service consumed by Carnegie Mellon worth $376 per student more than a service provided to the community college?

Moreover, the proposal is based on assumptions rather than calculations. It makes no allowances for services that universities provide for themselves - including on-campus police, contracted waste disposal and others. Nor does it account for the money that non-profit institutions such as universities pump into the economy. Posing universities as a unilateral drain on the economy is disingenuous, at best.

And, almost all students use some form of student aid. Most of that, in turn, is subsidized or guaranteed by the federal government. Increasing the cost of tuition through a local tax would increase the amount of taxpayer-subsidized aid that students would need.

To attempt to impose such a tax this year - when many students already have had to change their college plans because of tight credit in the student loan markets, a sour economy that has cost their families some jobs, and student employment is at record lows - is to ignore economic reality on the ground.

Many universities have done a poor job of controlling their own costs, making it even more difficult for students to stay in school. For a municipal government to turn those students upside down and shake them would be unconscionable.

The state government should outlaw the tuition tax before this bad idea becomes contagious.

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