Taxes on Student Tuition - Good or Bad Policy?

By Chris Hodges posted on Wed, 2009-12-16 13:07 , 254 reads, 0 comments

The City of Pittsburgh is planning to add a 1% tax to student tuitions to pay for employee pensions. There are about 10 reasons why this is a bad idea, and 10 why it's a good idea. And about 50 unintended consequences.

 

My own "2 cents" is that unfunded public pension and retiree health care obligations are the ticking time bomb in the US, fiscally speaking. Governments have promised employees money that doesn't exist (California has $100 billion less in its pension funds than it owes, according to The Economist). So we'll be seeing more of these issues over the next decade.

 

Raising money through development, cutting costs, or imposition of random fees to pay these obligations will likely be a major factor in future long term planning by cities, states, and universities.