Universities to City: We Know Better

I was a lot more sympathetic to the universities before they started opening their mouths:

Today, the university and surrounding community enjoy a harmonious relationship, even when considering the occasional complaint about noisy students. This is in large measure because we have changed the conversation and opted to collaborate. Instead of the town viewing the university as a cash cow to offset budget deficits and the university invoking its nonprofit status, RWU and Bristol’s Town Council leaders adopted a collaborative approach designed to provide resources in a strategic manner while reaffirming the university’s tax-exempt status. (P-G, Dr. Roy Nirschel)

I’m sorry, I’m having trouble seeing — the condescension in the room is so thick and painful to the eyes.

This is where I lost my lunch:

Fresh from that election we revisited the issue of a payment to the town in lieu of taxes. Instead of a head tax or monies allocated for the town’s general fund, the university and town developed a memorandum of understanding that went far beyond balancing the books for that year.

The town and university identified key needs in the community, such as support for an emergency vehicle, which benefited all citizens. (ibid)

Why do non-profits think it’s appropriate to pick and choose which government expenditures seem useful enough to them? Is democracy not a good enough system anymore?

I don’t know about Bristol, Rhode Island, but Pittsburgh contractually owes a gazillion dollars to its pensioners, a stampillion dollars in bonded debt, and another bazookillion dollars under a consent decree for its water infrastructure. Meeting these overwhelming obligations is very much “a key need in the community” which “benefits all citizens”, because it’s swamping the needs of everything else and we will drown — drown! — unless our major economic engines chip in significantly.

Oh and by the way — Dunkin Donuts also employs a lot of people, and provides needed pastries and coffee to a community that has trouble rousing itself the morning and attaining alertness. Yet I’ve never heard them ask to be treated special. That’s the thing about a community — good guys need to chip in financially, too.

The universities really would be better off letting their students do the talking for them and keeping their own mouths shut.

##

So here’s what I’m saying today. I’m no fan of using the Student Tax to get at the university scene through a back door — but I’m even less of a fan of Rep. Paul Costa’s bill to rip that option off the table. (x-CORRECTED)

We are a City, and a Home Rule Charter city at that, and we have certain legal rights, including the right to tax privileges. That law has meaning and I would not make it obsolete. If our City representatives enact a Student Tax, the remedy for that is political, i.e., we’ll take care of it ourselves. We don’t need the state sticking its beak in, hopped up on campaign donations by universities and other non-profits, to weaken City autonomy. Who knows, after we truly exhaust other options, we may all agree we need that Student Tax somewhere down the road.

Secondly, we should be pursuing Councilman Burgess’s raft of zoning and appraisal legislation which has the aim of compelling serious PILOTs to the general fund — the general fund — like its our job. Let’s see a press conference with the Mayor, all nine Council members, the Controller, every one of our Judges and Magistrates, and Steely McBeam this time.

21 thoughts on “Universities to City: We Know Better

  1. Anonymous

    My understanding was that it was State Rep Paul Costa (D-Wilkins) who represents Swisshelm Park and the Eastern suburbs who was putting forward this legislation.

    Reply
  2. Miller

    When the issue concerns state law, specifically Act 511, it's not the state “sticking it's nose in.” It's enforcement. What Costa wants to do is clarify the delegation of taxing power.

    It is admirable that you are sticking up for the rights of the city, but why not the rights of indivuals and non-governmental entities? Wayne Fontana's proposal would diminish those.

    Also, I believe the previous commenter is correct in saying that it was Paul Costa and not Jay Costa.

    Reply
  3. Conservative Mountaineer

    Bram..

    You're off-base here. The City of Pittsburgh refuses to address the gross and insane pension obligations of all its workers by CUTTING and CUTTING DEEP. It's time public sector employees have to shoulder the burden for their retirement, not sucking off the public. The City, instead, like all governments, simply wants to find or raise another tax so the politicians can get and stay elected.

    Reply
  4. Bram Reichbaum

    Mountaineer – I'm all for that also. However, you can't cut what's already been contractually obligated (unless you'd like to file for bankruptcy) and you can't stiff Wall Street (unless you'd like to declare shenanigans and take them to court) and you can't keep dumping human waste in the rivers (unless you're gross). And those things altogether are so expensive, you can't cut your way out of them. No, I don't find it objectionable that our very successful Eds and Meds should chip in just like Donuts and Residents. Or if not just like that, something similar In Lieu.

    We can pursue both efficiency and equity at the same time.

    Reply
  5. Conservative Mountaineer

    Bram..

    The City is not only bankrupt.. it's insolvent, a much worse situation. The Democrats and their Union cronies have driven the City into the ground. Yes, the City should (have) declare(d) bankruptcy. Oh,,, but that would be sooo hard on the Unions and the City employees. Boohoo. Instead, the City just goes after another (easy) mark. No wonder you never/rarely see a businessperson get involved in government or (better, yet) a former politician/bureaucrat being successful in business.

    Reply
  6. Grimace

    Perhaps the city should just declare bankruptcy. Really, how bad would that be? The city wouldn't be able to borrow any more money, but is that really that bad?

    Reply
  7. Conservative Mountaineer

    @Grimace..

    Essentially, the City is already bankrupt. In fact, from a strict interpretation they're insolvent, a MUCH worse condition.

    Think of it this way.. a business is bankrupt if there is a potential of working its way out of a financial jam. A business is insolvent if there's no way in h*ll that the business has enough assets or enough potential business to even work out a deal with its creditors.

    The City is insolvent. The Unions and City flunkies will not take the salary and pension haircuts needed for the City to survive. (Aside: Screw 'em. There's thousands who would take their jobs.. even at the pay required for the City to survive.) Plus, the Boy Mayor and the Council flunkies won't make the difficult decisions required for the City to propsper or even survive. (Think: Blazing Saddles – “Gentlemen. We have to protect our phoney baloney jobs.”)

    The good news is that when the sh*t treally hits the fan for the City and the State (check that one out re: the pension freight train alomost out of the tunnel.. we're talking BILLIONS), I'll be in NC or SC. Bye, suckers.

    Reply
  8. Anonymous

    Bram, although I enjoy your blog I have to disagree with you on this one. Dr. Nirschel's op-ed is valid in that municipalities – as well as universities – are looking to see how this flies. Pittsburgh (and its Mayor) wants a quick fix to address decades of fiscal mismanagement. Plugging the hole won't solve the problem. Union contracts, legacy requirements, bloated budgets (shall we yet again bring up Hizzoner's need for a security detail?) aren't being addressed. Even the ICA noted that, although they unfortunately decided not to give him army taps at the hearing, and instead opted for a knuckle rap. (Those who attended parochial school know what I mean.)

    Anyway, non-profits exist to provide for public benefit. Motznik can go off on tuition increases and salaries, but those things ultimately benefit the student. He's a tool, and I shudder to think what he'll be like as a judge. Take away the non-profits from this town – higher ed, arts, etc. – and we'd be D-E-A-D. And if you're going to attack one group, then include healthcare. Sorry, but Lukey's deals with UPMC are still the elephant in the room.

    My father was a steelworker and a union member, and I still recall what his union's and his employer's refusal to negotiate and become competitive led to – the mill closed. Until a Pittsburgh politician is willing to stand up to those in his or her own party, and is willing to make the tough choices before going after even MORE taxes to plug the leak, I will disagree.

    But no…Pittsburgh, and Allegheny County, are still living in the past and refusing to face the future, come what may. For once I agree with Conservative Mountaineer – the “Blazing Saddles” analogy is apt. Replace Gov. Lepetomaine (a subtle joke in itself) with Lukey, Heddy Lamar with Zober, and the cabinet with council, and what do you get?

    “We've gotta protect our phoney-baloney jobs, gentlemen, we must do something about this immediately! Immediately! Harumph, harumph!”

    And meanwhile, the five in Lukey's pocket say, “Harumph.”

    Whatever. Politics in Pittsburgh never change. Unfortunately.

    Reply
  9. EdHeath

    Bram, what we need to realize is that while the Universities may be rich, they are not rich. After all, when you think of the average college/university professor, they spent nine years in school (well, longer than that considering they never left) and what do they have to show for it? A shabby faculty club, travel to educational conferences in Eastern Europe or Maine (off season) in that Proletarian first class and an income in the low to mid six figures. Meanwhile their roommate, who was only smart enough to get into business school, now has an income in the mid to high six figures and travels in a corporate jet. Do you realize how embarrassing reunions are? And don’t get me started about administrators. At least faculty has their research into the complete lack of mention of post-Newtonian physics in the romantic literature of mid eighteenth century Prussian glow worms, or French. Arch-Chancellors have only their income on the mid to high six figures, while their fraternity brothers who are now CEO’s pull in seven. And pity the poor Bursars, Provosts and Registrars (and all sorts of other incomprehensible titles) who get that low to mid (six) figure with not even an obscure research field to call their own, versus the CFO’s, COO’s and CIO’s (and all sorts of other incomprehensible acronyms) who have SUV’s to take them to exurban McManisons.

    Actually, I am all in favor of soaking the Colleges/Universities a bit. But will no one take up the call to soak Highmark and UPMC as well? And by the way, what does it matter that Colleges/Universities have raised their tuitions more than the proposed one percent tax every year? I mean, were they supposed to let the Clinton educational tax credits go untapped?
    Bram, what we need to realize is that while the Universities may be rich, they are not rich. After all, when you think of the average college/university professor, they spent nine years in school (well, longer than that considering they never left) and what do they have to show for it? A shabby faculty club, travel to educational conferences in Eastern Europe or Maine (off season) in that Proletarian first class and an income in the low to mid six figures. Meanwhile their roommate, who was only smart enough to get into business school, now has an income in the mid to high six figures and travels in a corporate jet. Do you realize how embarrassing reunions are? And don’t get me started about administrators. At least faculty has their research into the complete lack of mention of post-Newtonian physics in the romantic literature of mid eighteenth century Prussian glow worms, or French. Arch-Chancellors have only their income on the mid to high six figures, while their fraternity brothers who are now CEO’s pull in seven. And pity the poor Bursars, Provosts and Registrars (and all sorts of other incomprehensible titles) who get that low to mid (six) figure with not even an obscure research field to call their own, versus the CFO’s, COO’s and CIO’s (and all sorts of other incomprehensible acronyms) who have SUV’s to take them to exurban McManisons.

    Actually, I am all in favor of soaking the Colleges/Universities a bit. But will no one take up the call to soak Highmark and UPMC as well? And by the way, what does it matter that Colleges/Universities have raised their tuitions more than the proposed one percent tax every year? I mean, were they supposed to let the Clinton educational tax credits go untapped?

    (why yes, I did get that latest Terry Pratchett book out of the library, why do ask?)

    Reply
  10. Bram Reichbaum

    Anon 8:58 PM – And this is where it becomes evident that I'm going around in circles. While I do not believe Pittsburgh can ever achieve financial stability without drawing in its profit-making non-profits into the contributing franchise — at the same time, for the reasons which both you and the Mountaineer cite, the government cannot claim the moral high ground to effectively politically initiate such moves. It would have been a lot easier to launch this crusade had it started off with a couple rounds of, “Look how aggressive we've been cutting costs! Look at the significant strides toward consolidation! Look at the political damage we've taken!” Instead the fire union is basically happy, the communities that get to keep their fire stations open are basically happy, the Mayor who pays multiple bodyguards overtime to stay out until 3AM is basically happy, and very few are in the mood to turn their skeptical eye outside of government. And things will remain the same, and some kind of breaking point (though nobody has any idea what that might be) draws closer.

    Reply
  11. Mark Rauterkus

    Insolvent. Humm…. That is a word that was not mentioned by Kevin Acklin nor Dok Harris.

    Doing things for neighborhoods is in a different realm from insolvent.

    Great posting / comments above.

    Tom Murphy was a great one for one-trick fixes. Well, these were tricky — but not anything like a fix. Fix it, don't trick it.

    Reply
  12. Anonymous

    Ed,

    Apparently, Allegheny County Council has heard your cry for equity across the field of mega non-profits and, due to a bit of fortuitousness (sp), has the opportunity to at least make UPMC sweat it out a bit.

    UPMC is asking Allegheny County to back $1.175 billion in County-backed hospital bonds so they can refinance their current bonded debt to the tune of the same amount.

    Why exactly is is that UPMC is seeking a re-fi? To take advantage of the lower interest rates and free up some cash.

    How much cash I don't know, but what I do know is if I were closing a loss leader (UPMC Braddock) and opening a revenue-generator (UPMC Monroeville), having some extra cash on hand would come in handy.

    Just something to think about.

    Reply
  13. Conservative Mountaineer

    @ Mark..

    I'm confused. What is your point re: insolvent and “doing things for neighborhoods”?

    What part of having no $$ and no possibility of working with the Unions and City employees do you not understand? The City is worse than bankrupt.. it's 'effin insolvent.. unless you agree with the ability to dream up schemes to extract more and more tax revenues from more and/or different constiuents without addressing its underlying problems.

    The neighborhoods are part of the problem. The residents of the neighborhhods have elected Democrats for 70 years… 70 years! Politicians have bestowed increased pensions on the Unions time and again.. ingorned infrastructure issues since Christ was born.. The City should declare bankruptcy. The neighborhoods deserve what they're going to get. Ooops, forgot.. the Democrat politicians will not face the music.

    Oh.. and don't EVER suggest merger of the City and County. I, as a suburbanite, will NEVER accept assumption of 70 years of patronage and graft. The City should die.

    Again, I'm out of this Western PA cesspool.. soon. I'm 55. NC or SC, here I come. I may pay as much in taxes, but I'll have better weather.

    Reply
  14. Mark Rauterkus

    I get that the city is insolvent. Fully understood with me. I agree with much of the approach on the posting above.

    My past comment above (confused you CM I guess) was a dig at what Acklin and Harris were trying to deliver in the recent campaigns.

    The challengers were talking about neighborhoods. Neighborhoods are a fine place to spend money if you have it. But, the city is insolvent.

    Talking about doing things for the neighborhoods is MUCH unlike talking about being insolvent. They are different messages — different frameworks.

    Likewise, I'm a resident in the city and the county. As a resident of the county, I don't want the county to absorb the debt of the city.

    Reply
  15. Brandon

    People already spend enough on college, some will be in debt for the rest of their lives with it. And then you look at the organization of colleges and realize that there's lots of waste.

    Reply

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