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Please Pardon Our Dust: Blog Undergoing Maintenance

Update, 2:18pm: Everything seems to be stable and working properly. If you discover anything broken, or have any other questions, please leave a comment below. Thanks for your help!

Original Post: Today we will be launching a new look for the Faculty Blog that will make it easier to follow your favorite faculty and student bloggers but will also more closely integrate with our main website. If the site looks strange at the moment, we are probably in the process of ironing out some formatting issues -- please stay tuned.

Video: Lee Fennell Discusses Her Book, "The Unbounded Home"

The University News Office recently produced a short video interview with Professor of Law Lee Fennell, in which she talks about the ideas in her recent book, The Unbounded Home. According to the book's publisher, it

grapples with a core modern reality -- that the value and meaning of a home extend beyond its property lines to schools, shops, parks, services, neighbors, neighborhood aesthetics, and market conditions. The resulting tension between the homeowner’s desire for personal autonomy at home and the impulse to control everything that could affect the home’s value fuels continual conflict among neighbors and communities. 

The home’s unbounded nature implicates nearly every facet of residential life, from the financial vulnerability of homeowners to the persistence of segregation by race and class. This book shows how innovations that increase the flexibility of property law can address critical issues of neighborhood control and community composition that have been simmering unresolved for decades -- and how homeownership itself can be reinvented to better deliver on its promises. 

The video interview is embedded after the jump.

Taxing Tuitions

The City of Pittsburgh is preparing to approve a 1% tuition tax on students attending college in that city. the tax would raise about $16 million and, in a a classic public choice move of identifying "winners" in order to garner political support, the tax is initially earmarked to pay pensions for retired city employees. Other cities have threatened such taxes - or, more directly, they have threatened to extend their property taxes to some nonprofit organizations. In response some universities (much larger property owners than museums and even churches in these cities) have agreed to make lump-sum payments to offset the presumed cost of firefighting and policing. My guess is that the tax will be imposed, challenged in court but not defeated, and then a compromise will be reached when one of the large universities next undertakes substantial building or expansion. At that point the university will have bargaining power - whereas at the moment the universities are fixed in place and vulnerable.

But what is the right result? The $16 million estimate suggests something like 50,000 students. Those who live off-campus, and their teachers, and the staff needed to support them do of course pay property taxes, income taxes, sales taxes and amusement taxes exactly as do other residents and visitors. Indeed, a hefty tax would probably have brought about a smaller higher-education sector in Pittsburgh, so that the city has benefited in some way from its colleges. To the the extent that the property tax is traditionally thought of as the means of financing public schools, undergraduates do not use that service at all - and the tradition, if it is just that, of property tax exemption is appropriate. Of course, the property tax is not exactly a user fee for the school system; many residents have no children or move to Pittsburgh after their children are grown (well, not many, but perhaps one or two). Most of the colleges finance their own police departments, though they can also call on the city's police. A fair assessment of the drain on public services would probably yield a number much less than the 1% tax, but the same could be said of other subsets of residents.

A better way to think of the issue is probably to imagine turning time back and having jurisdictions bid, or otherwise strike long-term deals, with entities. Some might charge for the right to build or to enjoy tax-free status; others might pay museums or universities to open in their midst because of the jobs, tourism, or other benefits associated with them. Universities would then choose among the packages of services and charges (or subsidies). But it is too late for that. Now the universities have substantial investments, and are among the least mobile of employers. Their physical plants are not easily sold to other taxpayers. They might have protected themselves by gaining charter protection, or contractual protection, especially before undertaking substantial expansions. Alternatively, they have been forced to acquire political influence, in the manner of other interest groups. Their tax-exempt status does, however, put them at a competitive disadvantage in this regard, as they are not permitted to engage in direct political activity. They can argue their case(s), but they can not support particular candidates or parties.

If the city's maneuver is a product of unusual financial stress, as appears to be the case, then the universities might do best to bargain now. In return for agreeing to make modest payments for "services" (based perhaps on a formula that took their own expenditures on police services into account, especially insofar as these provide externalities benefiting the city), they could secure long-term agreements capping the tax or the payments.

Finally, we can see the tuition tax as much more clever than a lump sum payment for services or a removal of the property tax exemption.Of these, only the tuition tax distinguishes colleges from museums and from churches. The city can be seen as arguing that it, along with many other jurisdictions, already imposes sales taxes on amusements and other things that straddle the line between services and products. A modest sales tax on tuitions - and on museum entry fees - is thus rather clever. But can taxes on temple dues and pew fees be next?

Dean Levmore Early Career Quiz

When I arrived as a student at the University of Virginia Law School in the fall of 1982, Professor Saul Levmore was already an institution, though he had joined the faculty there only two years earlier. On Friday, September 12, 1980, the student newspaper at the Law School, the Virginia Law Weekly, had run an article about the school’s newest faculty member. In honor of Dean Levmore stepping down this month to rejoin the faculty, after eight years of sterling service, I offer a short quiz based on that article to test your knowledge of the early career of our great Dean.

Student Blogger - Fall WIP: Douglas Baird Presents "Car Trouble"

"Good afternoon, and welcome to NPR's 'Car Talk'. Today, we have special guest Douglas Baird of the University of Chicago Law School, here to talk with us about the bankruptcy law implications of the recent crisis in the American automotive industry. Glad to have you with us, professor."

"Good to be here."

"Could you start be explaining the roots of the problem?"

"Well, it's very simple, actually. The domestic automobile industry is tooled for a different technological era and a different car-selling era. The American car market may well be saturated -- there are already more cars in the country than there are people with drivers licenses, and with technological improvements in automobile production, cars have to be replaced less frequently. The result is that the automobile industry has seen sales drop from a consistent 15 million/year, to less than 10 million. But production capacity is still tooled for the prior era, leading to tremendous fixed costs that aren't going to be recouped in the foreseeable future."

"So how do we get rid of that excess capacity?"

"Kill Chrysler. It sounds bloodless but it's true. Some capacity had to be shut down, and Chrysler is not only the least valuable and efficient of the big three, but everyone recognized that it had no real prospects for recovery or renewal. The only question was whether it should be shut down immediately, or gradually to allow some of its functions (and perhaps its few profitable brands, like Jeep), to be taken over by Fiat. For a variety of reasons, the government chose the latter approach."

Student Blogger - Rights or Welfare

The modern international human rights regime needs an ideological transplant. Such is the diagnosis of Professor Eric Posner in his recent essay, Human Welfare, Not Human Rights. Posner considers several striking symptoms that characterize a moribund system of international cooperation. He discussed the paper and the symptoms with the Law and Philosophy Workshop.

Though the paper details several important points, two lines of argument were of particular interest to Workshop participants. First, Posner reports that there is no consensus among scholars as to the philosophical justification for protecting human rights, much less for any enumerated list thereof. Worse, those scholars that do engage in debate on this front largely ignore the structure of the existing international human rights regime. Second, in many cases the international regime mandates expenditure of resources to secure the protection of a particular right irrespective of competing demands for those scarce resources. At the same time, where such tradeoffs are permitted, the regime fails to indicate how to evaluate the merits of competing legitimate demands.

The prescription? Posner suggests that where there is only largely superficial agreement about human rights, nobody denies that states have a responsibility to increase the welfare of their populations. An international treaty regime that focused on requiring states to maximize the welfare of their populations would achieve a broad philosophical and international consensus, where human rights cannot. Furthermore, a regime focused on welfare would provide better guidance for pursuing and evaluating compliance by providing a single metric for maximization.