Erie, Pa., offers student head tax to fix town-gown ties

Kristin Barrett

Northwestern and Evanston are not the only university-city partners with a financially contentious relationship.

For years, Evanston officials have lobbied NU, which is exempt from paying taxes, to make direct financial contributions to help alleviate the city’s budget problems.

In Erie, Pa., city officials, including Mayor Rick Filippi, also are trying to devise a solution to compensate for lost revenue from two universities’ untaxable property. Filippi recently suggested that Erie’s two local colleges, Mercyhurst College and Gannon University, pay $50 per student to the city.

This student head tax would pay for police, fire and other municipal services, despite the schools’ exemption from taxes. If both universities paid $50 per student, Erie would gain more than $300,000 per year.

“I’m in a position where I have to deal with the city’s high rate of tax-exempt properties,” Filippi said in a Jan. 3 Erie Times-News article. “There are revenue-generating organizations occupying prime city of Erie real estate, but we aren’t getting any tax revenue from them.”

Erie’s situation is a familiar one to university and city officials in Evanston, where NU and the city constantly squabble over budgetary issues. Evanston currently has a $3.5 million budget shortfall for the upcoming fiscal year. Mark Franz, assistant to the city manager, said Evanston would appreciate an in-kind contribution from NU but has not formally requested help in the past few years.

“Is there an economic problem within Evanston? Yes,” Franz said.

Franz said NU’s location within Evanston’s city limits is both a help and a hindrance to city finances. On one hand, the university provides a “good economic boom” for Evanston, helping bring in revenue and taxes from sales, he said.

But providing municipal services like fire protection to the university are “quite an expense on our part,” Franz said.

While some university and city services do overlap, NU differs from the schools in Erie because it has its own police force and garbage service. The two colleges in Erie are more dependent on municipal services, which prompted the mayor’s call for a head tax.

Lucile Krasnow, NU’s special assistant for community relations, said a similar student head tax was proposed in Evanston during the 1980s.

“In their wisdom, the City Council defeated the concept,” Krasnow said.

She also said a head tax for employees in Evanston’s largest businesses, which would include NU and two hospitals, was proposed about two years ago. The proposal was tabled and revisited, but never left committee.

“I would think that it would not be in the city’s best interest to tax a non-profit for the people it serves,” Krasnow said.

Despite the differences between NU’s administration and city officials, students are making an effort to bridge the gap. Last year, Associated Student Government appointed a liaison to City Council to improve relations between the two bodies. This year’s council liaison, Weinberg senior Courtney Brunsfeld, said she understands the reasons why Erie’s mayor would push for a head tax.

“It certainly would be one way for the city to get some of the money for public services,” Brunsfeld said.

But Brunsfeld said she would have a hard time seeing NU agree to pay such a fee. Franz agreed with her that town-gown relations remain strained due to financial differences.

“It’s pretty well-known that our relationship has had its ups and downs,” Franz said.