Tuesday, December 22, 2009

A Few Thoughts on Taxing Students

Pittsburgh, Pennsylvania has gained some notoriety recently for a new idea in government reform: taxing college students. In an effort to scrounge money for its local government status quo, Pittsburgh's Mayor Luke Ravenstahl had pushed to adopt a head tax for local students that would be added to their college bill.

Actually, it was not a new idea. Providence, Rhode Island's mayor had the same idea earlier in the year. That effort ended in stalemate.

While Pittsburgh's mayor has pulled back from that plan while he negotiates additional "voluntary" contributions from local colleges and universities, Pandora's Box may well now be open. Bad ideas, like good ones, can spread.

Being immediately over the western horizon, Mayor Ravehstahl's idea wouldn't have far to travel to hurt Ohio's college students. Encarnita Pyle reported last week in the Columbus Dispatch that such an idea is unlikely to gain traction in our state. I think she's right, but for reasons beyond what she suggested.

Ms. Pyle's sources talked about the importance of higher education to the state. That is true, but most tax advocates agree that higher education is important. They argue that colleges place burdens on local communities that are not offset by revenues, especially since nonprofit and state government colleges do not pay property taxes. Putting aside the property taxes paid by students, faculty, staff, and landlords for their residences, and the other massive economic impacts of colleges in any city, in Ohio the support for localities goes even farther.

Ohio's communities have the ability to impose income taxes, and do so. The highest local tax rate is a full one-third of the state and local taxes paid for any Ohioans making less than $200,000 per year. In many smaller towns, Ohio independent colleges are the largest source of municipal and school-district income-tax revenues.

Those same communities also receive other direct benefits, as do cities and towns across the nation. In some cases, university police forces agree to patrol portions of a jurisdiction, both for the benefit of the residents and to apportion the costs of law enforcement to the higher education institution.

Cities and towns also receive other benefits from colleges that translate into real money benefits. Colleges create safe communities, with higher property values and generally lower crime. Universities make substantial contributions of services by faculty, staff, and students. These range from food drives to voter registration to care for the elderly to teaching assistance in local elementary schools.

Colleges also help maintain stable communities. Ohio knows what abandoned municipalities look like. We have them in sizes ranging from large to small—towns and cities where the industry of old died or left. Yet look at places where higher education helps preserve the economic lifeblood of the town. Dayton's vitality is intimately tied to the University of Dayton. Franciscan University of Stuebenville anchors that community since the demise of most of the great Weirton works across the river. To understand what these communities would look like without an anchor higher education institution, one need only look elsewhere in our state.

Universities are a source of culture in their communities, which is especially important in an era where such funding is been deeply cut by states, localities, and business supporters. They also attract business. Indeed, part of our own state government's emphasis on supporting higher education is based on the deep link between a strong higher education sector and economic development in modern economies.

The rich irony in Pittsburgh, as it would be in Ohio, is that municipalities and the state spend enormous energy trying to attract for-profit companies by abating taxes and giving credits for local worker income taxes. To raise taxes on students while giving money to corporate shareholders would be incredibly shortsighted, but it would also be stunningly unjust.

Some of the same arguments have been raised to introduce PILOTs (Payments In Lieu Of Taxes) to Ohio. Policy Matters Ohio was contracted by the Cuyahoga County Treasurer to look at PILOTs for local hospitals. Their analysis concluded: a) other jurisdictions tax nonprofit hospitals; and b) if Cleveland did so, it would generate a great deal of money.

Of course, this argument misses two important points. First, nonprofits, including hospitals, colleges, and others provide communities with huge direct and indirect benefits, which are discounted by PILOT and head-tax advocates. (Indigent care comes immediately to mind for the targets of the Policy Matters Ohio study, for example.)

Second, in Ohio, local income taxes are often imposed, which generate comparable revenues to PILOTS in the Northeast. Providence, Rhode Island, which attempted to impose a student head tax, has PILOTs now, like many New England communities. Notably, those communities do not have local income taxes.

There are several other reasons Ohio communities shouldn't adopt student head taxes or PILOTs. In setting tax policy, every community weighs who ultimately pays the tax. Hotel taxes are paid by non-residents. Alcohol and tobacco taxes are paid by drinkers and smokers. Student head taxes and PILOTs are ultimately paid by students. Considering that most students take loans to complete college, the reality is that any new PILOT or head tax will be turned into student debt, mostly for young people under age 23 and working adults who are trying to complete a degree.

In other words, students are either earning very little money and are having their taxes increase, or are about to enter the workforce, typically at lower levels of income. Student head taxes are essentially a regressive taxation system, taxing those with less income for the benefit of those with more.

In addition, increased costs discourage higher education participation. Ohio elected officials proudly touted the public college tuition freeze in 2007's state budget, and attempted to maintain a freeze this year. Yet the difference between the freeze and a typical four percent tuition increase at an Ohio public four-year college is less than the proposed tax in Pittsburgh, which was about $400.

Ohio policy makers claimed that the tuition freeze would encourage enrollment. I would suggest that if a few hundred dollars matters enough to freeze tuition, it certainly matters enough not to raise taxes.

This summer, we learned in late July how much aid to independent college students would be cut. The timing was unusual because it was after student aid packages were mailed in the spring. Cuts were as high as $3,000, which most colleges could not make up. One president of an Ohio college told me his institution of about 2,000 students lost over five dozen students after and because of those unexpected aid cuts.

One final thought for local officials that might support a student head tax: people and institutions can vote with their feet, especially in the modern Internet era. Aside from not attending college, students can go elsewhere. One of Ohio's strengths is its constellation of colleges and universities—public and independent. Students are free to choose other Ohio and non-Ohio alternatives. At the margin, increased costs push students elsewhere.

As importantly, college homes are not permanent. Many people don't know that both Pepper Pike's Ursuline College and Canton's Malone University used to be in downtown Cleveland. Their reasons for moving had nothing to do with taxes, but move they did several decades ago.

The real risk for communities is not that colleges will pick up and go, but that they will evolve away. Opening a new pharmacy school or school of graduate education? A college can just move over the relevant jurisdictional line. Expanding to on-line programs? Create a new campus/server-farm in a faceless suburban office park outside the reach of the head tax.

Tax supporters will say things like, "they'll never move." They have too much tied to this place, or these buildings, or 'our' community. In most cases, that's true. But I speak from personal experience. I graduated from the University of Denver College of Law. Through the 1980's, the law school was downtown, across the street from the City and County Building. After the closure of Colorado Women's College, the campus moved to what is now the Denver campus of Johnson & Wales University, just south of the former Stapleton International Airport. A few years after my graduation, it moved to its present location.

If this same move happened from an original location in downtown Cleveland, it would be no different than moving to Lakewood, and then moving again to Westlake. In Columbus, think downtown Columbus to Upper Arlington to Dublin. Or Cincinnati City Hall, to North College Hill, to Wyoming.

The head tax idea will probably never make it across the Columbiana county line. But it's well worth know why it shouldn't in addition to why it won't.

Monday, December 21, 2009

Malone Cops NAIA Men’s Cross Country Title, Other Fall Tournament Results

With this past weekend’s completion of the collegiate fall sports championships — the so-called Bowl Championship Series merely lays a claim on the name — here is a summary of national tournament results featuring AICUO member institutions.

Malone takes third consecutive NAIA men’s cross country title
This fall’s national title for AICUO belongs to the Malone men’s cross country team, which won the NAIA championship meet, held November 21 in Vancouver, Wash. This victory marks the third consecutive and fourth overall championship won by the Pioneers.

Detailed results for each qualifying team are linked in the scores below. Thanks to our campus sports information offices for making these reports available on line.

Cross Country
NAIA
Men
1. Malone
19. Cedarville
21. Rio Grande

Women
3. Malone
6. Cedarville

NCAA Division III
Men
18. Heidelberg
32. Mount Union

Women
15. Case Western Reserve
23. Oberlin
29. Baldwin-Wallace

Soccer

NCAA Division I
Women
1st Round
Dayton 0, Marquette 0 (Dayton won on penalty kicks, 4-3)

2nd Round
Virginia Tech 3, Dayton 1

NCAA Division II
Men
1st Round
Lewis 2, Ashland 1

NCAA Division III
Women
1st Round
Otterbein 1, Frostburg State 0
Denison 2, Transylvania 0

2nd Round
Otterbein 1, Denison 0

3rd Round
Messiah 1, Otterbein 0 (2 OT)

Men
1st Round
Transylvania 2, Capital 1
Medaille 3, Denison 0
Brockport 1, Ohio Northern 1 (Brockport won on penalty kicks, 5-3)

NAIA
Men
1st Round
Rio Grande 2, Columbia (Mo.) 1
Notre Dame 3, Benedictine 1

2nd Round
Rio Grande 4, Biola (Calif.) 0
The Master’s (Calif.) 3, Notre Dame 1

National Semifinal
The Master’s 0, Rio Grande 0 (The Master’s won on penalty kicks, 7-6)

Field Hockey

NCAA Division III
1st Round
Lebanon Valley 9, Wittenberg 0

Volleyball

NCAA Division I
1st Round
Dayton 3, Wisconsin-Milwaukee 2
2nd Round
Illinois 3, Dayton 1

NCAA Division III
1st Round
North Central (Ill.) 3, Heidelberg 1
Mount Union 3, Lebanon Valley 2
Ohio Northern 3, Bluffton 1
Calvin 3, Wittenberg 0

2nd Round
Juniata 3, Mount Union 1
Ohio Northern 3, North Central (Ill.) 1

Regional Final
Hope 3, Ohio Northern 1

NAIA
Opening Round
Indiana Tech 3, Walsh 1

--Bob Burke

Mount Union Falls in NCAA Championship Game

Despite a second-half comeback that tied the game early in the 4th period, Mount Union yielded two scores in the final 1:17 to come up short in the NCAA Division III football championship game, losing 38-28 to Wisconsin-Whitewater.

Quarterback Kurt Rocco, injured in the semifinal round, returned to throw for three touchdowns and run for a fourth, but two 4th-period turnovers halted the Raiders’ momentum. When Whitewater’s Levell Coppage ran 31 yards for the game-winning touchdown, Mount Union could not answer in the time remaining.

The loss ends Mount Union’s 29-game winning streak, which included last year’s national championship. The Raiders conclude their 2009 season with a 14-1 record.

Thursday, December 17, 2009

UD Grad Gets Elected Down Under


Typically, AICUO will feature and congratulate newly elected state and federal officials on here, but recently a UD graduate was elected as Premier of New South Wales, Australia's largest state. Premier Kristina Keneally was born in the United States to an Australian mother and an American father. She graduated from the University of Dayton in 1991 and again in 1995 with degrees in political science and religious studies respectively. Her progression to Premiership started when she was elected to Parliament in 2003 and Minister of Ageing and Minister of Disability in 2007.

AICUO would like to extend a global congratulations to our Aussie friend and wish her the best in her newest post.

To read more about Premier Keneally and New South Wales click here.


- Dustin A. Holfinger

Flyer Fund Flying High

Students at the University of Dayton's Davis Center for Portfolio Management have had a unique opportunity. They have been placed in charge of a nearly $11 million investment portfolio, a portion of the university's endowment fund. The Flyer Investments Team's track record for success caught the eye of CNBC in November and NBC Nightly News recently aired a story featuring the 15 undergrads. Click HERE to see the whole story.


- Dustin A. Holfinger

Monday, December 14, 2009

Mount Union Reaches NCAA Division III Football Championship Game — Again

Defending NCAA Division III national football champion Mount Union returns for the fifth straight year to the national championship game following its 24-7 victory over Wesley (Del.) in a semifinal game played Dec. 12.

The championship game, called the Amos Alonzo Stagg Bowl, kicks off at 11 a.m. Saturday in Salem, Va.

Making its their 13th overall visit to the championship game, Mount Union will meet Wisconsin-Whitewater, its opponent each of the last four years. A victory would give the Raiders their 11th championship, their fourth in five years and its seventh since 2000.

While tickets for the game Saturday are on sale through Wednesday on the Mount Union campus in Alliance, you can stay home and watch the game on ESPN2 starting at 11 a.m.

-- Bob Burke

NPR Sports Program Highlights Champion Kenyon Swimmers

The athletic programs at Ohio independent colleges succeed nationally in more than just football. This weekend, “Only a Game,” a Saturday morning sports program on National Public Radio hosted by Curry College Professor Bill Littlefield, featured the Kenyon College national swimming champions as they prepare for a new season.

--Bob Burke

Monday, December 7, 2009

Mount Union Earns NCAA Football Semifinal Berth; Wittenberg Ousted

The NCAA Division III football tournament continues this weekend with just one AICUO member still participating.

After a 400-plus mile road trip to Whitewater, Wis., Wittenberg fell to its host, the University of Wisconsin-Whitewater, by a 31-13 score. The Tigers trailed by a single point at halftime, but lost its starting quarterback to injury near the intermission. Wittenberg ends its season with a 12-1 record.

In Alliance, Mount Union, the defending national champion, hammered visiting Albright (Pa.), 55-3, to continue to the national semifinals.

In this Saturday's semifinal the unbeaten Purple Raiders host Wesley (Del.) at noon.

The winner continues to the Amos Alonzo Stagg Bowl in Salem, Va., on December 19, to play the winner of the Wisconsin-Whitewater v. Linfield (Ore.) semifinal. Three of the four semifinalists are independent colleges.

—Bob Burke

Friday, December 4, 2009

AICUO at the Statehouse

For those visiting Columbus, I highly recommend a visit to the new Statehouse museum. The museum has been open for several months, and even though I spend a great deal of time in the Statehouse, yesterday was the first opportunity I have had to spend a few minutes to view the exhibits.

There are solid displays about the nature of our state government, how the legislative process works, and other things you would expect to see in a good state capital museum. For a political junkie like myself, I certainly enjoyed seeing the charmingly dated television commercials (Gov. Celeste on the stump), the straw hats, and other goodies from the campaign trail.

As AICUO president, however, the biggest surprise was just as I left. The museum itself is in an awkward space in the Statehouse basement. The designers used the unusual curved, overhead walls to display oversized images of campaign buttons. I hadn't noticed this until I started to walk out of the exhibits. It was then that I saw a little bit of AICUO preserved for the future.

Above is the picture of State Representative Larry Christman's campaign button. For those that don't know, Larry was a four-term state representative and former chairman of the higher education finance subcommittee. He then later served 22 years as the president of AICUO. For those who know Larry, and those who want to learn more about state government, a few minutes at the Statehouse Museum is a pleasant diversion.

—C. Todd Jones