Have you read Rand? Her sentiments are similar to those you're expressing right now, though far more extreme (and in my opinion more than slightly crazy). She does, however correctly (also repeatedly and loquaciously, but I suppose she felt like it needed to be stressed enormously) emphasize that simply blindly draining ability is, in your own words, "short-sighted and counterproductive". (She also holds that those who do so are not simply ignorant or careless, but evildoers who hate existence and spend their lives trying to hide their hatred of existence of themselves, which I'm not sure you would agree with. Regardless, the essence of the views are similar.)

I've read a few of Rand's books. OK, maybe I should say I skimmed a few of her books. Atlas Shrugged was a brutal slog, for example. (To be fair, when I hit Galt's speech, I simply stopped reading. I think it's the only time I've ever put down an 1100-page book at page 900.) I obviously agree with some of her points, but casting the whole thing as a moral issue leaves me more than a bit cold.

Leeching may not be the most appropriate word. Or at least, we might want to check as to who exactly is leeching whom in Pittsburgh.

Many city government provide substantial services to tax-exempt nonprofit institutions, notably police and fire and EMT services, but also educating the children of employees of those institutions, roads to allow students, faculty, and staff to get to the institutions, snow plowing and maintenance of those roads, providing public transit that makes it possible for low paid but essential employees to get to work at those institutions, parks and museums that make the city an attractive place for students, faculty, and staff to work and live, etc.

In the city with which I'm most familiar, there is a lot of tax-exempt property, including a liberal arts college with a strong engineering program, a community college, a couple of hospitals, a nursing school, and a large number of other tax-exempt cultural and service institutions, etc.

The budget for all local government in the city comes to about 4,000 per capita. Some of that budget comes from state aid, but that aid is drying up. There will need to be cutbacks in spending but taxes will almost surely have to go up as well. There is a good deal of state-mandated spending that the city can do little to control. So taxes have to go up. One option is just to load more tax burden onto the owners of taxable commercial and residential property in the city, but they are already very highly burdened with taxes. It's not clear if 1% is exactly the right amount to demand, but it is understandable that the city would think of asking for at least some contribution from the tax-exempt property owners in the city, including the institutions of higher learning.

Then why selectively target the one class of those institutions that is most responsible for your city not becoming Detroit? If Pittsburgh is subsidizing the universities, I might even call that a good idea -- an investment. (I'd rather keep government out of it entirely, but if I had to choose, I'd want my government investing in top-notch schools rather than mooching off them.)

Well, I admit that I don't know that much about Pittsburgh, but in the case of the three cities near here that I'm thinking of, there is not a whole lot of high tech development directly within the city limits of the cities hosting the universities and colleges. That development is out in the suburbs where taxes on commercial real estate are lower, because they aren't stuck with all that tax-exempt property on their rolls.

So meanwhile there is an inner city which is loading more and more costs onto the few remaining taxable property owners still in the city. It's a vicious cycle--the tax bills get so burdensome that landlords and homeowners sell their property to nonprofits or just abandon their buildings altogether.

This wouldn't be a problem in a place like Houston, Texas, which is allowed to annex its suburbs as soon as they start bringing in more in tax revenues than they cost in services. But in New York, where there are a bazillion small local units of government, you can get some bad equillibria where some places get stuck with a lot of non-taxable property while others nearby are rolling in the dough from businesses that have started up as a result of the educational institutions nearby.

But, as someone who lives in one of the very nice nearby suburbs with some of that high-tech industry (with resulting excellent public services and tax rates lower than the inner city), but who enjoys the educational, cultural, and medical amenities provided by tax-exempt institutions hosted in the nearby inner cities, it's hard not to feel concerned about the aging relatively low-income homeowners in the inner city struggling to pay their tax bills while dealing with potholes, unplowed streets, etc. due to the city's budget problems.

Still, colleges and universities are struggling too right now. Many are laying off staff, but still.....there's a certain nearby institute of technology I won't mention by name, where there were layoffs last year but they still found a way to pay their president 1.6 million dollars. They also have a bunch of other administrators who get paid high salaries with titles that suggest they do very little of any value that I can perceive. The school is located in a poor inner city with a low tax base and lots of tax-exempt property. It seems to me that the institute could afford to cut a few administrator salaries and use some of that money to pay some fees to the city.

I think Pittsburgh is one of the few midwestern cities that has avoided that dynamic, and I believe Pitt and CMU are a nontrivial part of why. I'm not making a global statement in decrying the policy Pittsburgh's mayor is suggesting, but rather one that is very specific to Pittsburgh.

I have to admit that I really didn't know much about the details of Pittsburgh's particular circumstances before you brought this topic up. If you don't count changing planes to make connections at Pittsburgh's airport, I've been to Pittsburgh exactly once in my life, and that was decades ago--my senior year in college I was flown out for a day-long series of interviews at PPG, formerly known as Pittsburgh Plate Glass. It was part of recruiting event for a large number of college seniors. Interestingly, they didn't bother actually bringing us into downtown Pittsburgh. They held the interviews at a conference hotel near the airport, out in the suburbs, so I had no real impression of the city.

Now that you mention it, however, I've done some more reading about Pittsburgh, and it does make a fascinating case study for thinking about this tax. Reading the wikipedia article http://en.wikipedia.org/wiki/Luke_Ravenstahlabout the mayor suggests he is not exactly a poster child for responsible government. His biggest priorities seems to be self-promotion and keeping sports teams in Pittsburgh. His biggest accomplishment seems to be having gotten to be Pittsburgh's mayor at the youngest age ever (26) and it sounds like he has a lot of growing up and learning to do before he can responsibly govern a city.

Other politicians in Pittsburgh are talking about taxing property of large nonprofit institutions in general, rather than specifically targetting institutions of higher education. I do think the whole question of the finances of the non-profit sector needs to be looked at more carefully. There are a lot of questionable practices in non-profits that deserve greater scrutiny than they've gotten, especially given the amount of revenue they get from the government, and the potential for corruption in those decisions. There are many interesting relationships between non-profits and politician-"community-organizer" people, for example.

I definitely agree that the non-profit sector needs some much more serious scrutiny. I'd be surprised if the amount of questionable activity that goes on there is smaller than the amount that goes on in the for-profit sector. This goes for universities as well. There's simply much less accountability.