University Times

Pitt officials say that a proposed new 0.5 percent tax on city employers' payrolls would place Pitt at a competitive disadvantage and would threaten "the economic well-being of the very institutions that are key to the future of the city."

Mayor Tom Murphy, in his fiscal year 2003 budget address last week, called for a new 0.5 percent tax on the gross payrolls of all city-based employers. The taxes would be paid by employers and couldn't be passed along to employees. Together with a proposed 10 percent tax on alcoholic drinks, the new payroll tax would generate $29 million for the cash-strapped city, Murphy said.

The proposed taxes require approval by the state General Assembly. Paul A. Supowitz, Pitt director of commonwealth, city and county relations, said University lobbyists have not yet studied the mayor's proposals in detail. "Even after we have, we won't want to reveal our strategy in a public forum," Supowitz said.

Pitt's administration issued a statement that acknowledged the city's "daunting revenue challenges" and offered to help "in appropriate ways."

But the University statement argued: "The tax exemption for nonprofit organizations is grounded in well-conceived policies that not only are in place here, but that are recognized nationwide; and since we compete with universities throughout the country, being subject to such a tax would place us at a competitive disadvantage.

"The University already generates tax revenues in excess of $9.3 million annually and contributes a range of services. As a recent report from the National Council on Competitiveness notes, regional economic development here has to be grounded in recognition that among the city's strongest assets, and those that make it unique, are its universities. While solving the city's revenue shortfall is a critical endeavor, seeking to do so by jeopardizing the economic well-being of the very institutions that are key to the future of the city would be short-sighted."

— Bruce Steele