This spring, the city Providence, Rhode Island announced plans to impose a $150 per semester tax on students attending the city’s colleges and universities, and now the city of Pittsburgh is moving in the same direction.
The Providence student tax is still working its way through the Rhode Island state legislature, along with a companion law that would allow the city to impose some direct taxes on private universities.
That companion bill reveals the motvation behind these new laws — to go after students if you can’t reach the universities themselves. Major private universities have enormous power, and they benefit from huge tax breaks. Taking them on directly is tricky, and carries potential bad consequences, so Providence and Pittsburgh are hoping students present a softer target.
October 14 update: See the comments to this post for a more detailed discussion of the pros and cons of the student tax.
studentactivism.net 
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October 13, 2009 at 8:47 pm
Adam
I would like to put this article into context, since a friend of mine is from RI. Their input has completely changed my initial reaction to the article.
Make no mistake, I am in support of many socially liberal causes and equal access to education. But you have to understand what surrounds this issue and the arguments. The major schools in Providence (Brown, RI School of Design, Johnson and Wales Univ) are all private schools that charge $35k/year for tuition and own a majority of the land in the city of Providence. Providence is unique in that most [majority] of the land in the city is owned by colleges. Currently educational outfits own land and do not pay property tax to the city on that land. This leaves the Providence homeowners to foot the bill for streets, police, fire, trash, and municipal administration. As a result property taxes in Providence are some of the highest in the nation. These private schools are no longer poor, fledgling institutions charging modest tuitions, they command premium fees, have huge endowments and are basically businesses. And as such, I (along with many homeowners in Rhode Island) believe that they should contribute financially to the city. This isn’t a law targeting underrepresented students, this is targeting transient well-to-do people who can afford exclusive art and ivy league private schools. These schools attract students who rely on city services but do not contribute to the tax base. It is not fair to compare this to UC or other state school issues. Also, the article at that link accuses the city of “going after students” as soft targets, however, a direct tax to universities based on size directly would just be passed on to students in tuition increases in just the same way. Either way these schools (and their clients, ie students) need to contribute to the city financially in which they are the majority land owners. A $150/yr tax is nothing compared to the amount in taxes paid per person by residents and homeowners in the form of higher property taxes and resulting higher rents for tenants.
October 14, 2009 at 8:49 am
Angus Johnston
You raise some important points, Adam, and I’m glad to have the chance to clarify the reasons for my opposition to the tax.
You’re right that a huge portion of the real estate in Providence is owned by private universities and exempt from taxes. Those universities do contribute to the city’s tax revenue stream in other ways, but the state of Rhode Island would be within its rights to impose property taxes as well, and I have no strong objection to that.
So why do I oppose the student tax? A few reasons.
First, it contributes to the stereotype, which you embrace in your comment, of students as rich outsiders — “transient well-to-do people,” as you put it. Not all students at elite colleges are wealthy, and many establish strong ties to the community while at college. Pitting students against locals is cheap, regressive politics.
Second, even if we assume that any new levy on the universities would be passed on to students in the form of tuition increases — an assumption that I’m not sure is warranted — such hikes would be reflected in financial aid packages granted to needy students and in student loan eligibility. The weight of a flat student tax would fall more heavily on the shoulders of poor and working-class students than would a carve-out from the universities’ tax exemptions.
Finally, students who live off campus are already contributing to the city’s property tax base in the same way that any other non-homeowner does — through rent. Owners of rental properties pay their property taxes with rental revenue, and they set rental rates accordingly. It makes no sense to charge student renters a new tax when they’re already paying their fair share through their landlords.
If you want universities to pay more taxes, fine. That’s a healthy debate for a city like Providence to have. But don’t balance the municipal budget on the backs of students.
December 14, 2009 at 1:39 pm
Jim
I first want to address the assumption that students of private colleges are well-to-do. This is not necessarily the case; in fact, nearly 85% of Johnson & Wales students are receiving financial aid.
-Private colleges and universities account for only 9.6% of tax exempt property
-Providence’s private colleges signed a MOU to establish a contribution to Providence of almost $50 million in voluntary contributions over 20 years
-Private colleges & universities do pay taxes on some properties- Brown University, for example, paid $3.34 million in property taxes and voluntary fiscal contributions to the city in FY 2009
-Brown University supports an ambulance service and a police force of 42 sworn officers, and provides space for a community policing station
-Brown University is the 8th largest employer in the state
-Nearly students commit a total of 150,000 hours per year to community programs
December 14, 2009 at 2:15 pm
Angus Johnston
This is great stuff. Do you have links to this info? I’d love to cite it more prominently.