Cash strapped communities are looking at ways to close budget gaps without burdening taxpayers with yet another tax increase. Taxpayers are still reeling from a down economy and any increase in taxes is likely to encounter fierce resistance.

That’s why some towns and cities are looking at their non-taxable property base to see if revenue can be raised in other ways. Houses of worship can’t and won’t be taxed, but colleges and universities may find their tax exempt status challenged in a way that circumvents the law and impacts students directly.

User Fees

What I’m talking about are proposed user fees charged by communities based on enrollment. Last November, SayCampusLife.com noted that Pittsburgh’s mayor, Luke Ravensthal, proposed charging a tax on college tuition. That tax was offered as a way for the Steel City to fund its pension obligation. The mayor reasoned that since colleges and universities scattered across his city use city services such as fire, police and emergency medical responders, they should help cover these costs.

As expected, opposition to Ravensthal’s plan was universal, with each school denouncing the proposal. Soon thereafter The Pittsburgh Channel reported that the mayor’s proposed one percent tax on college tuition was rejected by the city’s Intergovernmental Cooperation Authority, not so much because it was a bad idea, rather because Ravensthal’s tax would have been deemed illegal or unenforceable.

Caldwell College

Pittsburgh isn’t the only place thinking about charging its college students. The Star-Ledger has reported that the town of Caldwell, New Jersey is considering a similar plan for its namesake Caldwell College, a small, Catholic institution occupying 70 acres of land in the midst of this Essex County community.

Like Pittsburgh, Caldwell has a budget gap to close, in this case a tiny $180,000 deficit. The town doesn’t want to raise taxes on its 7400 residents, but they don’t seem to be exploring other options such as cutting expenditures. Instead, councilman Joe Norton, chairman of the town’s budget committee has proposed charging students a fee each semester: $25 for part-time and $50 for full-time students.

Exploring Options

Though it is understandable for communities to want schools who use their resources to pay their “fair share” of services rendered, our elected leaders are failing to understand the significant contributions these schools make to their communities. Lots of local businesses such as coffee shops, clothing stores, and food outlets located near campus reap the benefit of having students as their customers and should be surveyed or at least observed for student traffic. I also like to think that home values are positively impacted whenever a college is located nearby; who can put a price on that?

Typically, cash strapped communities include cities known to spend more money than they take in or communities whose workforces are highly paid. Instead of dumping yet another expense on financially strapped college students, towns would serve everyone better if they trimmed the fat and lived within their means. New Jersey’s governor, Chris Christie is doing that at the state level—it is time for the Garden State’s 566 communities to follow suit.

Too often a tax increase is looked at as a way to resolve a problem. Instead, cutting expenses and forging interlocal agreements can save far more money while enabling communities to operate in the black year after year.

Tags: Caldwell, Caldwell College, Chris Christie, city services, New Jersey, Pittsburgh, The Pittsburgh Channel, The Star-Ledger, tuition tax, use fees