Skip to Navigation
University of Pittsburgh
Print This Page Print this pages

June 12, 2003


An open letter to Mayor Murphy from SAC

Dear Mayor Murphy:

In response to your proposal to tax the University of Pittsburgh as well as other non-profit organizations in the City of Pittsburgh, we would like to draw your attention to some economic history of the region. The City of Pittsburgh and surrounding region has morphed from a highly industrialized economy to one driven by technology and ideas. The main reason that the region has been able to adjust to a new economy driven by technology can be directly attributed to non-profit organizations such as the University of Pittsburgh, Carnegie Mellon University and Duquesne University. Pittsburgh now has a global recognition, not as a city that makes steel, but to quote President Bush, as “Knowledge Town.” Pittsburgh has the 6th largest grouping of education and research activity in the United States with the University of Pittsburgh alone receiving more than $433 million in outside sponsored research funding (FY 2002). Corporations once generated the most patent activity, but the growth in the field in recent years has come from smaller high-tech firms and research-oriented universities, including Carnegie Mellon and the University of Pittsburgh. Pittsburgh ranks above the national average in spin-off companies and both Pitt and Duquesne sponsor Small Business Development Centers providing expertise to ensure the success of small businesses in the region. Pitt, CMU and UPMC employ approximately 4 percent of the local work force and create another 19,000 jobs from the businesses that rely on the spending of those associated with the non-profits in Oakland. While the corporate presence in Pittsburgh has declined (dropping from a national ranking of 3rd for corporate headquarters to 8th), the success and notoriety of the educational institutions has increased, resulting in economic strength that the region would not otherwise have experienced. The direct and residual impact of these institutions cannot be calculated. In essence, Pittsburgh would not have much of an economy without them. In light of the economic history of the region where taxes, along with other factors, have driven business from Pittsburgh to surrounding counties as well as out of state, we question the direction of the economic plan that you are proposing for Pittsburgh. There was a time when it was unthinkable that the steel industry would falter or would leave this area. Will the environment of Pittsburgh be again a place that economic forces such as these universities leave or are encouraged to stay and become more successful?

The University of Pittsburgh does voluntarily pay $85,000 per annum for municipal services and because of it presence, also generates other monies for the City in the form of amusement taxes, wage taxes, parking taxes and real estate taxes. Yet the University of Pittsburgh Police patrol the Oakland area and have an arrest record of 80 percent involving city and not University matters. This section of the city has a high pedestrian presence, yet many city roads have either faded or no crosswalks, let alone signage or cross lights. Additionally, Pitt provides services to the city such as clinical health services to schools and communities, a volunteer labor pool of 40,000 community service hours, and the Community Outreach Partnership Center that uses University resources for economic development, job training and neighborhood revitalization. Should the University charge for these and other services to the community as you are suggesting that we be charged for city services? To your argument that the $10 city occupation tax has not changed since 1965, we would ask, “Why?” What kind of financial management practices do not review or adjust sources of funding in 38 years? These are not the kind of practices that are taught nor used at the University of Pittsburgh.

The educational institutions along with the service-oriented non-profits face budget problems because of the poor economy. Pitt is currently facing continuing funding cutbacks from the commonwealth resulting, in part, in staff cutbacks. The taxation of non-profit educational institutions will surely increase their budget burdens resulting in additional staff reductions. Will Pittsburgh again be one of the leaders in unemployment in the nation because of the economic environment? We ask you, Mayor Murphy, to rethink your plan for an economic environment that penalizes institutions that bring economic strength and stability to the region and adopt a plan for an environment that attracts and encourages organizations with these traits. Other cities are developing plans to make their regions attractive to potential economic drivers and would relish the opportunity to have these institutions of higher education in their communities. We request that you not tax the non-profit organizations that provide services for the community and fuel the economic engine for the region. Doing so might cause irreparable damage to our community and its economy. Pittsburgh and the surrounding region have already paid the economic price due in part to the poor management and lack of planning on the part of our leaders in public administration. We ask that you not make us pay that price again.

Ann Ostroski

Safety and Security Chair

Staff Association Council


Rich Colwell


Staff Association Council

(Editor’s note: At yesterday’s meeting, SAC members voted to endorse this open letter.)

Leave a Reply