Oversight Board Rejects Pittsburgh Budget Proposal

The state agency that oversees Pittsburgh's finances has rejected Mayor Luke Ravenstahl's $453.8 million budget, which would have taxed college tuition.

The Intergovernmental Cooperation Authority said Tuesday that the tax didn't comply with state law.

The single issue able to bring momentum to a standstill was the proposed tuition tax, a 1 percent tax on students attending Pittsburgh colleges and universities to raise $16 million.

The panel members argued the tax may be illegal and a court battle would ensue.

Ravenstahl wanted to tax tuition at 1 percent to raise some $16 million. He questioned the authority's impartiality, saying four of its five members have or had ties to universities.

“In no way is this a surprise. I think we expected it,” said Ravenstahl.

Ravenstahl’s budget called for part of the revenue coming from the 1 percent tuition tax.

“You can’t count those revenues. Would you rather get to October of next year and know you have a $15 million hole or would you rather fix it now?” said Barbara McNees of the ICA.

Ravenstahl said he may ask the City Council to pass the tax anyway while also considering service cuts or a property tax increase to fill the $15 million budget gap.

“I’m going to pursue the tax. No. 1, we think it’s fair, and No. 2, it’s the only thing we can do right now locally,” said Ravenstahl.

However, college representatives applaud the panel's decision.

"We are extremely pleased with the Intergovernmental Cooperation Authority's decision to reject Mayor Ravenstahl's budget proposal by challenging the inclusion of the proposed student tuition tax to balance his budget," according to Dr. Mary Hines, chair of the Pittsburgh Council on Higher Education and President of Carlow University.

PCHE's member institutions include Chatham University, Carnegie Mellon University, Community College of Allegheny County, Duquesne University, LaRoche College, Pittsburgh Theological Seminary, Point Park University, Robert Morris University, University of Pittsburgh and Carlow University.

"We welcome an opportunity to meet with Pittsburgh City Council and the mayor's office to further explain our concerns and discuss our continuing activities in support of the entire Pittsburgh community," said Hines.

The oversight authority was created in 2004 after Pittsburgh was declared financially distressed in December 2003.

A budget must be in place by Dec. 31.