Pittsburgh taxes college students to fund pensions

The Wall Street Journal reports:

"Facing big unfunded pension liabilities for city workers, Pittsburgh is proposing what appears to be a one-of-a-kind 1% tuition tax on local university and college students, who claim the tax is illegal and unfair...

The tuition tax, which would raise an estimated $16 million, threatens to drive a wedge between the city and its universities, which have been credited with fueling much of Pittsburgh's economic transformation from an industrial city to an education and medical-services center.

The cash-strapped city, which has 85,000 students at its 10 universities and colleges, including top-ranked engineering school Carnegie Mellon University, says it needs the tax to help cover a $600 million pension-fund shortfall and keep several branches of the Carnegie Library system open.

The "Post Secondary Education Privilege Tax" or "Fair Share Tax" is justified, the city argues, because the students use city services -- roads, police and fire protection -- and should pay for them. Moreover, the city contends that the tuition tax, which would range from $27 for students attending Community College of Allegheny County to $400 for those attending Carnegie Mellon, amounts to a small charge for services."

Read the article.