Pittsburgh Delays Vote to Tax Tuition

In a sudden change of course, Pittsburgh’s mayor asked the City Council Wednesday to postpone a vote on the nation’s first tuition tax on college students, holding out hope that the city’s 10 colleges and universities will agree to provide economic help voluntarily.

"Over the last several days, thanks to your strength, conviction and support, we have made progress," Mayor Luke Ravenstahl wrote in a letter on Wednesday to City Council members, citing discussions with Pittsburgh’s nonprofit community. "I feel that a one-week hold on this bill is an appropriate measure."

University officials and students, who have been asking for weeks for the mayor to drop his proposed 1 percent tuition tax, hailed the decision as a victory. The mayor is racing the clock because two of the Council members whose votes he needs to get the measure approved are leaving the Council at the end of the year.

In addition, state lawmakers are considering a bill that would explicitly prevent municipalities from enacting such measures.

If approved, the tax would affect students attending college in Pittsburgh and would raise more than $15 million in annual revenue that is needed to pay pensions for retired city employees. Mr. Ravenstahl said he still hoped to get an agreement with the universities or seek a final vote before Dec. 29.

The proposal was being watched closely by other cities struggling with similar budget gaps. Students and college officials in Pittsburgh have argued that the tax would set a bad precedent in altering the tax-exempt status of nonprofit organizations and pose an unfair burden on institutions that already contribute substantially to the city.

Council members said Wednesday that they believed the tax would probably be avoided.

“I don’t see this vote taking place next week because I think both sides are looking for a graceful and face-saving way to get out of the conflict,” said Doug Shields, Council president and an opponent of the tax.

Mr. Shields said he believed that the mayor would take the tax off the table and that, in return, the universities would agree to some payment and help in lobbying state lawmakers for changes in how the city raised revenue.

But some Council members said the tax was still a possibility.

“There are still five strong votes backing the mayor’s tax if he has to go that way,” said Councilman Jim Motznik, a supporter of the tax. “We don’t want to impose this tax on students, but what we are really talking about here is the cost of one extra textbook so that we can avoid raising property taxes or laying off a hundred cops.”

Mary Hines, chairwoman of the Pittsburgh Council of Higher Education and president of Carlow University, said that once the mayor removed the threat of a tax, universities would probably be willing to commit to a three-year voluntary payment.

That commitment would be predicated, however, on a broader agreement from the city to work together on larger budgetary strategies, like raising the service tax that everyone who works in the city pays to about $144, up from $42, Ms. Hines said. To make such a change would require approval from the state legislature, and the mayor has asked the universities to help him lobby for that change.

In Harrisburg, the state capital, lawmakers sought to get in front of the mayor’s plan. Representative Paul Costa, Democrat of Turtle Creek, has drafted a bill that would explicitly prevent municipalities from taxing tuition.

The tax, were it imposed, would also probably face a court challenge.

Mr. Ravenstahl has said that if the universities do not agree to a voluntary payment, he will be left with no other option but to impose the tuition tax. The city currently forgoes about $50 million in real estate taxes from nonprofit institutions, he contends.

The City Council has twice delayed action on the measure, which would cost students $27 a year at the Community College of Allegheny County and $409 at Carnegie Mellon University.

Dave Gau, a student government board member at the University of Pittsburgh who has helped organize opposition to the tax, said the delay in the vote was a clear victory for students.

“I hope that by Monday, the City Council will see that the tax is extremely unfavorable and spend their efforts coming up with alternatives,” Mr. Gau said.

THE NEW YORK TIMES