PITTSBURGH - City officials shelved an idea for a first-of-its-kind tax on college tuition after two universities and a nonprofit health-insurer agreed yesterday to make large contributions to the city.
Mayor Luke Ravenstahl hopes that the contributions from the University of Pittsburgh, Carnegie Mellon University or Highmark Inc. will serve as a catalyst to get other nonprofits to help the city financially.
Ravenstahl had called for the 1 percent tuition tax on the city's 65,000 college students as a way of getting money to help pay for some $15 million a year for the city's pension obligations.
Nonprofits are exempt from most taxes but represent many of Pittsburgh's major employers. About one-third of the city's property value is tax-exempt, owned by either nonprofits or government.
Neither the mayor nor the three institutions would disclose how much they would give, but Ravenstahl said that he was optimistic that the money would help resolve the city's long-standing financial problems.
After the state declared Pittsburgh financially distressed in 2004, the city sought $6 million annually from nonprofits, saying that the money would help offset city services including police, trash pickup and road maintenance.
The Pittsburgh Public Service Fund, a group of some 100 nonprofits formed in response, contributed nearly $14 million for 2005-2007. But this year the city expects just $1.6 million from the fund.