Ravenstahl and other city leaders had sought to impose a 1 percent tax on tuition paid to the University of Pittsburgh, Carnegie Mellon University and other non-profit educators to help plug a funding gap in the city employees' pension fund. But Ravenstahl announced Monday the controversial tax plan has been dropped because the schools have agreed to make larger voluntary contributions, The Pittsburgh Post Gazette reported.
"This is a leap of faith for all of us," Ravenstahl told reporters, but he said that if successful, it will generate money for the pension fund in time for the 2011 budget, when the city would otherwise face very tough decisions about its future.
The Post-Gazette said the city needs $16.2 million per year to support a $15 million annual boost in the contribution to the ailing pension fund. Ravenstahl proposed the tuition tax because, he said, students and tax exempt institutions weren't shouldering their fair share of the burden of supporting city services.
The Post-Gazette said neither Ravenstahl nor school officials would say how much more they will give.