Talk is cheap: The city needs real revenues for its pension fund

Plans for an unpopular tax on college and trade-school tuition are on hold, but the city still doesn't have a long-term solution for increasing its pension fund payments.

City Council on Wednesday put off a vote that would have imposed a 1 percent tax on higher education tuition, and officials plan to sit down for a string of discussions with leaders from affected institutions today.

That doesn't mean the tuition tax is dead.

Talking about other possible revenue sources is all well and good; the tuition assessment never was ideal, and no one is comfortable with taxing students if there is another legal way for the city to generate the funds it needs to pay down its pension costs.

But mere talk will not be sufficient, and a solution must be found soon. The Intergovernmental Cooperation Authority already forced the city to take the projected revenue anticipated from the tax out of its 2010 budget because it remains speculative at this point. The response budget the city submitted came up with the $15 million necessary for next year, but many of those dollars are one-time revenue.

The alternatives that have been publicly discussed so far are iffy. One would be an agreement from the schools to a more generous, voluntary plan than the offer of $5.5 million over three years from the Pittsburgh Public Service Fund, which includes universities and other nonprofit organizations. The other would be authorization from the Legislature for an increase in the $52 annual tax on people who work in the city, a proposal that has generated only minimal support in Harrisburg.

City Council and the mayor already agreed to necessary, increased payments toward the city's huge legacy costs when they adopted the recovery plan. Before City Council tosses the tuition tax aside, it needs another feasible plan to raise those dollars.