Friday, May 22, 2009

Free lunch? Oppression? A Commuter Tax? Dream On, City Officials (And Overlords)

The Mayor of Pittsburgh has surveyed his insolvent, dilapidated, dying city and concluded that the place needs to be spruced up a bit . . . so long as city residents skate on most of the bill. A mixture of increased commuter tax, reprieve from the state-mandated parking tax reduction, and payroll tax on tax-exempt organizations would be just the tonic, the mayor has asserted.

Th "plan" received the standard reception in Harrisburg, whence authority to impose such measures must issue; State Senator Jane Orie labeled the mayor "delusional." State Representative Don Walko declared the commuter tax proposal "dead on arrival." The most sympathetic opinion was issued by State Senator Wayne Fontana, who observed that the maintenance of current parking tax rates "is probably the easier one."

State officials had no comment on the mayor's proposals to increase city property or wage taxes or to place some of the financial burden on city employees -- because there were no such proposals.

The mayor's inspiration was a "recovery plan" issued -- "floated" was the term used by the Post-Gazette, an apt choice because things that float tend to be relatively substanceless, such as feathers, ashes and prospects of a commuter tax-financed city bailout -- by the Act 47 resuscitation team. The Act 47 team's inspiration was . . . well, it's difficult to imagine, but the first guess is one of those Married With Children episodes in which Al (or Peg) pursues a lame-brained get-rich-quick scheme.

Everyone associated with the City of Pittsburgh's finances has been daft for decades, so the chatter on that front is in character, but it is unexpectedly difficult to gauge the Comet's take on these developments. The Comet's reference to outsiders "oppressing" the city and enjoying a "free lunch" at city expense, and cheers for "commuter tax now," must be sarcastic . . . right?


Bram Reichbaum said...

Not at all. A more muscular commuter tax was at the heart of the original Act 47 recovery plan -- but the rug was pulled out from under us at the last possible moment.

I do believe it is fair to ask people who commute to the City of Pittsburgh -- due to the fact that rush hour tells us we are still something of a regional economic engine -- and use all our city services that they should have to pay a fair tax.

City of Pittsburgh taxpayers aren't "skating" on anything. It's the folks who've escaped to McCandless and Mt. Oliver who are, at least if they still spend a good portion of their day in Pittsburgh.

What we need to do is illustrate a positive vision for the whole region if Pittsburgh regains its financial wherewithal -- and more importantly, I think, a NEGATIVE vision for the whole region if Pittsburgh is allowed to rot and fester.

Infinonymous said...

A course at least equally reasonable, given the city's record, would cause greater region to cut bait with the chronically inept and dysfuctional city -- build a long-overdue beltway, stop the disproportionate direction of major publicly funded projects to the city, require parity on the "must live in a particular municipality" rules, pulverize once and for all the idea of a state bailout with respect to the city's unfunded obligations, stop using the city as the sole mass transit hub -- and attempt to save itself while leaving the city to sink or swim on its own power.

The key point is whether the city becomes functional. Whether it will begin to live within its means; begin to make sensible decisions; stop expecting others to pay for its corrupt and substandard performance; begin to elect adults who hire other adults for advice and management; and the like.

If it does -- and I hope it does -- I would favor intergovernmental cooperation and a reliance on the city as a large part of a regional turnaround plan. If the city shows no sign of a better trajectory, however, I would regard it as deadweight the region should not and perhaps can not continue to rely on or to support.

Those regional residents outside the city owe the city nothing (more accurate: nothing more than a city resident owes a resident of a suburban municipality, such as honesty and respect). The city's problems are self-inflicted. It elected twits, it amassed huge deficits, it pursued foolish development projects, it allowed its schools to deteriorate, it tolerated corruption and cronyism, it refused to adapt, it provided substandard services, it engaged in financial chicanery.

Shoveling money toward the city is not guaranteed, or even likely, to improve the city's performance. It could subsidize and mask it, probably would make the performance worse, and would likely ensure an even more severe, albeit deferred, eventual day of reckoning.

Propping up the current city performance would be as immoral and counterproductive as maintaining the current county assessment system. Pursuing that course is a luxury a reeling region can not afford.

I would support increasing the commuter tax to whatever level the city chooses -- after a two- or three-year transition period in which businesses, legislators, citizens and municipalities could prepare for a world in which the city is neither favored nor disfavored by government policy.

Bram Reichbaum said...

You read the Cutting Edge this morning, Infinonymous? C'mon, link hands! Join the love train!

"Cutting bait" as you call it would be cutting off their nose to spite their face -- the suburbs would only suffer and lose their luster if Pittsburgh goes all Detroit or worse. And although I agree we should have built a serious beltway years ago, there just isn't THAT MUCH stimulus money floating around and besides which, the project would take 20 years.

You have one good counterpoint, and I think I'll call it THE counterpoint: the issue of our often substandard, irrational and parochial public decision making. As justifiable as it would be to ask our suburban neighbors (and in other ways, neighbors across the state) to sacrifice for us, it'll be awful hard to do so if we can't demonstrate not just "belt-tightening", but a real improvement in our habits. I'd recommend the "professionalization" of the administration of Public Works would be an excellent, and a popular, place to start.

EdHeath said...

I will offer in a thought here. It doesn't really matter what's fair, it doesn't really matter whether the suburbs owe the City money or vice versa. What does matter is whether the City, through friendly State legislators, can convince the State legislature to either give the City money or allow it to tax non profits and/or itself and its neighbors to a greater degree. Since the State doesn’t really have money, the former would be especially difficult.

The City was probably able to get as far as it did the first time (2003-4) because the State did not want a municipal bankruptcy to answer for. The same may hold true here. It appears we are in the early stages of a silly game of chicken, with really incompetent players such as Orie and Ravenstahl. There will be talk of vision and fairness, but I do not believe it will matter to the outcome in the long run. Which ever players are politically stronger and more adept will emerge victorious. Personally I wouldn’t bet on the home team.

Infinonymous said...

Cutting Edge? I am not familiar with it.

Cutting bait? Unless the city changes direction, a necessary step.

If Pittsburgh can avoid bankruptcy until Ravenstahl's successor takes office, a substantial change in course could be enough to make Pittsburgh worth trying to salvage. I hope that occurs.

A bankruptcy might not be so bad, if it could change the city's direction. The Port Authority, too, might benefit from bankruptcy. At some point, failure must be acknowledged and deadwood removed.

Jerry said...

I agree that the city has to be sensible and responsible to a degree it has not been in the past. But let's be clear: To suggest that the city "live within its means" is a prescription for decimating the city, unless you are being unusually generous with your definition of "means."

There is an $800 million deficit between the City's reserves and what it owes to pensioners. Legally, that has to be paid. For the City to continue at its current level of taxation AND meet that obligation ... well, I don't know if it's even possible, but if it is, it means there won't be money left in the budget for ANYTHING else.

So to say that the City should freeze its income and deal with its past problems is to essentially condemn the City to collapse.

Like I said, major changes need to happen in the city before it's at all feasible to discuss consolidation. But let's be honest about the effects of the plans we suggest.