Every college town in the state, if not the nation, should be closely following the events of the past few days in Pittsburgh where a cash-strapped city's mayor has proposed a 1 percent tax on college tuition.
Mayor Luke Ravenstahl says that the first-of-its-kind tax in the nation would generate about $16 million for the city, which provides services to college students but usually receives little in taxes from them or their tax-exempt institutions of higher learning.
Pittsburgh, like many other cities, has argued for years that the likes of Carnegie Mellon and the University of Pittsburgh, which have huge land holdings in the municipality, need to pony up more bucks to help the city since their properties are not taxed.
Sound familiar, Clarion Borough?
Locally, we've seen Clarion University grow and grow by buying up properties, taking them off the tax rolls. The same can be said for just about any other college town in the state.
These tax-exempt organizations do make an "in lieu of taxes" payment to the towns in which they are located, but often the amount doesn't come close to the values of the properties if they were taxed traditionally.
In Pittsburgh, a fight is brewing between the city and colleges, which argue the proposed new tax is illegal and will hurt their competitiveness when it comes to recruiting students. The mayor argues that the state allows the collection of "privilege" taxes, and that the city's massive budget deficit requires all who benefit from city services to pay their "fair share."
We agree. Ravenstahl's tax proposal is akin to the $52 Emergency and Municipal Services Tax which many towns now collect. Once called the Occupational Privilege Tax, the levy was allowed to be expanded from its $10 annual charge after towns and cities across the state contended that people who worked in their towns, but who did not live there, also benefited from that community's tax-funded services. For example, in New Bethlehem at The Leader-Vindicator, all employees pay the full $52 charge to New Bethlehem Borough even through none of the employees here live within the borough limits. However, we all count on the borough to repair and maintain its streets, provide police services, enforce ordinances and more.
The EMS tax is a fair tax, and so is the college tuition tax. College students, and the universities they attend, benefit from the tax-funded services provided by the towns they are in. In Clarion, Indiana, Slippery Rock or wherever, students benefit when the borough streets are plowed in the winter, when sidewalk ordinances are enforced, when borough police patrol, when street lights are on, and much, much more.
If Pittsburgh's mayor's plan is passed by the city council there, we expect the new tax to be challenged in court, with judges ultimately deciding its legality. Towns like Clarion should closely follow those proceedings as it could provide one more tool in the funding toolbox and possibly a way to keep the entire burden from falling on property owners in the community.