Dirty Language

Well gosh-golly and gee-willikers, where the h-e-double-hockey-sticks have I been?

As I mentioned in a previous post, I took a job in September as an admission counselor for a university.  If anyone out there knows about university admissions work, you know that it involves a lot of travel.  Essentially, I act as a salesman for the university; I meet with potential students, share highlights of the school, and convince them to consider my university for their college career.

Well, September through November is one of our office’s busiest times, which meant that I had to learn a lot of information about the university and articulate it clearly to students and parents. 

(As a quick aside, I have a new appreciation of salespeople and what it takes to be good.)

Anywho, I am back!  And don’t believe for a second that I was lapsing on the current economic news of the day!

One story that has been catching my interest (for multiple reasons) is playing out in Pittsburgh, PA (my hometown).  Mayor Luke Ravenstahl, fresh off an election victory — a virtual guarantee for a Pittsburgh democrat — has proposed a 1% tax on the tuition paid to the city’s considerably large higher education sector. 

Students would pay, according to an article on Inside Higher Ed, between $27 and $409 per year for this tax.  The Allegheny Institute and Prof. Mike Madison both provide their opposition in rather well-stated terms.

What may make the whole ordeal more outrageous is that Mayor Ravenstahl’s argument for the tax is two-fold: 1) students use city services without paying for them (which is largely overstated, if not outright untrue); and 2) Pittsburgh’s universities are already hiking up tuition on students, and this 1% tuition tax is small compared to what these tuition hikes are like.

I outright reject Mayor Ravenstahl’s second premise, which comes across as juvenile and boyish, to say the least.  “If Pittsburgh’s universities were jumping off of a cliff, would you do it to?”

From an economic standpoint, I believe that higher education is an investment that is right for many individuals, and is, on the whole, very good for society.  Whatever the elasticity of demand for higher education is (unless it is negative), any increase in the price of obtaining a college degree in the Pittsburgh area will necessarily decrease the number of students looking to get a college degree in the Pittsburgh area.

From what I understand of Pittsburgh politics — which is a lot like trying to find the two ends of a string that has been balled up and tangled into an unorganizable mess — the city’s budget deficit is in large part because of too much spending (primarily in the form of pension plans and healthcare benefits for unionized workers) and too little revenue (primarily in the form of many “businesses” in the city being hospitals and universities, and thus have certain tax-exempt privileges).

I believe that if you are going to tax a society, you had better have done all you damn well can to trim spending inefficiencies and require reasonable changes to unions’ contracts. 

Until that happens, Mr. Mayor, you can keep your flippin’ taxes to yourself!