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The Battle over Tuition Taxes

December 1, 2009

College students in Pittsburgh are protesting a proposal to impose a 1 percent tax on their college tuition costs, but other cities and states may be forced to follow suit.

The financially troubled city is desperate to raise revenue to stave off bankruptcy and fill a $15 million hole in its budget. The nonprofit status of academic institutions such as the University of Pittsburgh, Carnegie Mellon, and Point Park University are not helping fill the city coffers, although students are already coping with steeply rising tuition costs and heavy unemployment.

Other cities such as Providence, R.I., have toyed with the idea of imposing tuition taxes, but most politicians are loathe to levy new taxes and some have reached deals with academic institutions to make voluntary payments instead. According to the Associated Press, Pittsburgh’s nonprofits will contribute about $1.6 million to the city next year, but that’s still going to fall far short of what’s needed.

However, students, like most other taxpayers, are reluctant to pay more in taxes. Many state governments are already raising tuitions on state universities to help make up for their budget crunch, and as some students are finding, alcohol taxes are going up too. That’s going to mean a more limited budget for cash-strapped students if the extra taxes go forward.

Pittsburgh’s students are organizing with petition drives, Web sites, Facebook pages, and in-person appearances at city council meetings and public hearings, according to the AP. That may help them stave off the taxes for a while, but cities like Pittsburgh will be forced to search for other revenue sources along the paths of least resistance.

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