City tuition tax proposal shows need for state revenue sharing

by state Rep. Don Walko

I know that Mayor Luke Ravenstahl’s tuition tax proposal is controversial, but the state has left him with few, if any, options.

Despite numerous efforts over the years, Pennsylvania has not provided opportunities to urban hubs, large and small, that host large tracts of tax-exempt real property to recoup the costs of the municipal services that they render to them.

Some may point to the Local Services Tax of $52 per year, which was pushed only by Pittsburgh, but is now used by hundreds of municipalities throughout the state. While that tax has helped, it is far from closing the budget gaps in communities like Pittsburgh that host large, regional tax-exempt institutions such as hospitals, universities, museums and stadiums.

Naturally, as Pittsburgh residents, my family and I enjoy the wonderful tax-exempt amenities that we have in our city. Those same amenities are also enjoyed by non-city residents from all over western Pennsylvania and beyond.

A tuition tax would not be my first suggestion. My approach would be to enact a state revenue-sharing program, like the one I proposed in 1995, which passed the House in 1996. It died in the Senate, even though the state was flush with cash at the time. Since then, there has been no political will to fund such a program. In light of what the nationwide recession has done to our revenue projections, chances are bleaker than ever.

Rather than blasting the mayor’s proposal, the institutions of higher education should team up with him to address the city’s revenue needs. Other tax-exempt institutions should join in the effort. They can start by mobilizing their boards of trustees and student bodies and their families in a major lobbying effort in support of state revenue-sharing or other funding mechanisms for the urban hubs that serve as hosts for these tax-exempt institutions that benefit the entire region.

For questions about other state-related issues, please visit my Web site – www.pahouse.com/Walko — or call my office at 412-321-5523.