Taxing College Tuition – Political Game of Chicken Goes to Pittsburgh Mayor

Growing up, I wasn’t a big fan of playing chicken. The version we played was rather innocuous in the greater scheme of things; riding one-speed bikes at one another until someone veered away certainly represented a rather harmless version of the concept.

But in what was clearly a version of the longstanding game, Pittsburgh Mayor Luke Ravenstahl apparently has dropped his proposed tax request. For those not up on the issue, Ravenstahl had been seeking a one percent tax on college tuition to help offset city revenue shortfalls.

iStock_000008081922XSmallThe fundamental key to the proposal was Ravenstahl’s assertion that nonprofits were falling short of paying their fair share of city costs. But according to news sources, six weeks after insisting the tuition tax was a critical component of the city’s financial future, the mayor has dropped a request that he appeared ready to pursue through the courts if need be. But in an amazing development, he stood with a group of people that included university presidents to announce he was dropping the proposal based on a promise of help from schools and other tax exempt corporations.

At the news conference, Ravenstahl cited a promise from the University of Pittsburgh, Carnegie Mellon University and Highmark Inc. to donate a larger sum of money to the city than they had previously pledged. In addition, he insisted that university leadership, the city council and other corporate leaders would work to craft a plan that would then be physically taken to Harrisburg (home of state government) to change specific rules related to the city’s finances.

Increasing Taxes

While raising taxes in a recession is normally deemed a political nonstarter, Ravenstahl had previously proposed a number of revenue enhancements to help the city solve its financial woes. Two publicized suggestions involved increasing the $52-a-year tax on people who work in the city and expanding a current tax on payrolls to include previously tax-exempt employers.

But it was Ravenstahl’s proposal, a first-in-the-nation 1 percent tuition tax, that has received the most attention. And while higher education in the city received significant early support in its opposition to the idea, news accounts had a significant legal battle looming, especially since a council majority appeared to be in support of the measure.

With both the city and higher education about to potentially spend exorbitant sums of money on legal expenses, it seems that the mayor may have managed to get the schools to turn away first. The developments seemed to be akin to giving in to the mayor’s demand earlier in the month for a pledge of $5 million in donations in return for dropping the tax.

In a sign that they at least understood how things might look to the public, Pitt Chancellor Mark A. Nordenberg told sources the universities were not “negotiating under the force of the pressure of the tax.” Carnegie Mellon President Jared Cohon added, “We’re not pledging a contribution in order to get rid of the tax. We are prepared to pledge a contribution as the tax is gotten rid of.”

400px-Ravenstahl_AFL_CIO_2009But in a clear sign the mayor got the attention of the nonprofits, the institutions have decided to rethink their prior contribution commitments. Adding yet another feather in the mayor’s cap was the suggestion that future agreements with individual organizations will be made public.

According to blogger Mark Potter, nonprofits have not been contributing their fair share. “Some of the city’s biggest employers,” writes Potter, “its institutional non-profits, are still paying the least to support city operations.

“… until the tuition tax came along, nonprofits this year were content to shell out a voluntary donation that was less than two thirds of what they contributed back in the 1990s. Name another constituency in this city — residents, for-profit business, commuters — whose non-voluntary obligations have dropped that much.”

Tuition Tax

While state representatives have suggested that the mayor’s tax proposals were “half-baked” or “misguided,” the nation was watching the tuition tax levy very carefully. The idea has been postured in a number of other cities, particularly in light of current fiscal environments that have many state and local governments facing revenue shortfalls despite continued demand for much-needed services.

In today’s economic downturn, city governments face tea-party-like resistance to any suggestion of raising taxes. In contrast, colleges across the country still raised tuition and fees amidst the severe economic downturn.

That step certainly caught the attention of more than just the student population. Meanwhile, the subsequent events in Pittsburgh should certainly serve as a wake up call for all non-profits – ante up, or else.

Either that, or you soon will be playing a political game of chicken as well.

Four Warning Signs You Chose the Wrong Major

When it comes to higher education, there are two critical decisions to be made.

First, but not necessarily foremost, there is the choice of a specific school. A couple of weeks ago we took a look at the warning signs that you may have chosen the wrong school.

iStock_000005651286XSmallJust as important as to the decision of where to attend college there is the choice of major. In fact, in a good many cases, the choice as to area of study ripples into the selection of a school leading some to actually choose their school based a desired major.

Yetstories abound of students changing their majors twice, three times and more. These are not tales – data indicates that approximately 70% of college students will change their college major at least once.

Perhaps you are someone who has begun considering such a change.

But you have heard that each time you change your major you may well move from a 4- to a 4.5- or even 5-year plan. That also is a statement based in fact. But your choice of major is something you really need to get right.

Here are five warning signs that you may have made the wrong choice initially.

Boring Classes

There is a saying:

A job is the place where I have to go to work to earn money. A career, however, offers the chance to follow my chosen pursuits and even get paid to do so.

When the day comes, on Monday mornings you will want to be feeling positive about the work-week ahead. While in school, the same situation applies: you should be looking forward to the classes that relate to your major field of study.

If instead you are finding your core major courses a pain, that they are flat out boring or uninteresting, then you have made a poor choice. If you are finding that you have little interest in the courses you are taking, there is little chance you will be excited about working in a profession related to that major.

Poor Grades

Most college students struggle with certain courses. After all, some classes are more difficult than others.

But most students earn their highest grades in the courses related to their choice of major.

iStock_000005531627XSmallOne sign you have made the wrong choice of major is that you are struggling to handle the demands of the core courses that set the foundation for your field of study. The basic question is simple: Are your grades for the core courses in your major lower than your grades in your other required classes?

If so, then you have made the wrong choice. A final transcript with poor grades in your major field of study is a red flag for employers – they will assume you are not likely to be able to bring the necessary skills to the job.


Not at All What You Thought

Now that you are in school and working on your field of study, you have a full sense as to what your major encompasses. Has that clarity reinforced or strengthened your original decision?

If you are having second thoughts, it could be that you chose your major for the wrong reasons. You may have been enticed by a hot career field or the earning potential of another option. Worse yet, you might have matched the popular choice of high school peers.

Now that you are actually involved in the coursework, is your major and area of study all you thought it would be? Is this a field that you can see yourself working in 40-hours a week, 52-weeks a year.

If not, you may have chosen the wrong major.


New Interests

Did you take an elective that brought you enormous excitement, a course where the work actually seemed enjoyable. A course where class time zipped by on a daily basis? A course that you truly hated to see come to an end?

Ultimately, the key question to ask is whether you were most content when studying the coursework in your major or did you find another area of study more appealing?

It is important that students differentiate between the course of study and the professor. It is the subject matter that we are talking about here, not how the material is presented or the ability of the professor to turn otherwise stale material into something palatable.

The bottom line is your major should be something you are excited about studying.

Changing Majors

iStock_000009402140XSmallIf your sentiment matches any of the four mentioned above you would do well to review your choice. But before making the decision to change your major, be sure to think things through.

First, take advantage of the services available to you on campus. Set up some time to discuss the idea further with the appropriate on-campus staff.

Begin by finding some time to connect with academic department personnel related to your initial choice as to a course of study. Then, take the time to meet with academic department personnel representing your potential new area of study.

Second, after those two discussions, take the time to seek out a counselor in the career center. Talking with a person that is independent of the two areas of study and processing your concerns with that professional can be a real help.

Most importantly, if you are not happy with your choice of major but have not yet been drawn to another field, these counselors can help provide some career assessment options. Perhaps through them you can begin pursuing some new and more interesting courses.

They can also help you walk through the ramifications of making a change. That may include any added expenses as well as whether or not the change will require the postponement of your original graduation date.

Time to Tax College Tuition? Pittsburgh Mayor Thinks So

The city of Pittsburgh is abuzz over the announcement of Mayor Luke Ravenstahl’s proposed plan to institute a 1 percent tax on college tuition for the 2010 budget.

400px-Ravenstahl_AFL_CIO_2009Calling the revenue enhancement the “Fair Share Tax,” Ravenstahl has estimated the proposal could raise as much as $16 million for the city. And while conservatives would insist this is just another case of taxing anything that moves, Ravenstahl sees it otherwise.

When it comes to the students taking classes within city limits, it is “the city and its taxpayers” that “bear the burden of providing them with services” states Ravenstahl. The youthful mayor goes on to claim that the “Fair Share Tax” idea is a result of his inability to fairly tax commuters and non-profit institutions.

Colleges Have Themselves to Blame

Naturally students and college officials have raised an uproar over the proposal. But as we muddle through what many experts call the greatest financial challenges since the Great Depression, state and local governments are struggling to balance their books as their revenues decline. All across the country, those same agencies, faced with enormous budget shortfalls, are making massive cuts to services. Without further revenues, those agencies will need to cut services much further over the next few years.

Meanwhile, colleges have dealt with the financial crisis by raising the cost of tuition and fees. According to web sources, at private four-year colleges, the increase was 5.9 percent over the prior year. At public four-year colleges, the increase was 6.4 percent over the prior year. Those increases simply reflect an ongoing trend that has continued unabated for the past thirty years and have critics insisting higher education has dealt with the fiscal crisis by passing the problem on to their students.

And of course, when it comes to fees, colleges and universities have written the book on how to add extra charges. Today’s typical college bill will include a lengthy list of fees from technology to student activity to labs to the parking sticker on a car, all above and beyond the basic tuition and room and board charges. Talk about taxing anything that moves.

Flat Percentage Concept

What makes the proposal so interesting to many outside the field of education is the notion that it would be a 1 percent tax on tuition. With private colleges now topping more than $30,000 a year in tuition, the tax would hit students much harder at what are often dubbed the “elite schools.”

iStock_000002953500XSmallIn contrast, at community and public colleges, where tuition is much cheaper, the student assessment would be much lower. This of course has a few folks insisting that the tax may actually be fair. That stated, those who attend the wealthier schools would insist they do not consume a larger portion of the city’s services than say students from a school where tuition was much lower.

The mayor has hired Joseph C. Bright, former chief counsel to the state Department of Revenue, to help pursue the 1 percent levy on tuition. Bright is on record as stating that the city will win the necessary court battle to have the tax in place for 2011.

However, one State Representative Paul Costa has announced plans to introduce a bill to put an end to the tuition tax proposal.


A Downer for Pittsburgh Students?

The levy would certainly be a major issue if Pittsburgh were the only city to institute such a tax. Seemingly, fewer students would enroll in a Pittsburgh college if such a tax were in place.

However, Inside Higher Ed has noted that Pittsburgh is not alone in discussing the idea, citing recent discussions to tax revenues from higher-education institutions in Boston, Providence, and Berkeley.

As the battle moves forward, we can be certain that the rest of the nation will be watching very closely. And we would suspect more than a few city officials across our great land, jealous of how easily colleges pass hikes onto students, could immediately move forward with proposals of their own should the concept be enacted in Pittsburgh.