Issue Area: Public Sector Retirement Systems
Work Effort and Results: Our analysis of Pennsylvania’s public sector pension plans, at both the state and local level, found that many plans are inadequately funded and require major remedial steps. We recommend switching from a defined benefit package to a defined contribution system. In addition we recommend the adoption of private sector accounting standards to shore up public pensions. We have commented favorably on some of the reforms proposed by the Governor in his latest budget address. This work culminated in Policy Briefs, Volume 12, Numbers 50 and 61 and Report 2013-02.
Issue Area: Marcellus Shale
Work Effort and Results: We have been studying the economic impacts of natural gas exploration in the Marcellus Shale formation for a couple of years. We released a study gauging the economic impact in July 2011 (Report 11-05). In 2012 Act 13 was signed into law imposing fees on natural gas wells spud in the Marcellus Shale formation. We analyzed issues such as the fee schedule, the effects if any on drilling, and how the revenue would be distributed between state agencies, the counties and municipalities. This work can be seen in Policy Briefs, Volume 12, Numbers 11 and 51.
Issue Area: Turnpike Commission Debt
Work Effort and Results: We weighed in on the Turnpike Commission’s plans to issue $450 million of new debt annually to cover mandated payments to the Department of Transportation. To cover the added debt service, the Commission anticipates significant, regular toll increases. Our analysis shows this borrowing plan to be dangerous and unsustainable and will eventually lead to reductions in Turnpike usage. This work culminated in Policy Briefs, Volume 12, Number 5 and Volume 13, Number 3.
Issue Area: Port Authority
Work Effort and Results: In a Sunday feature editorial we commented on the new Port Authority contract with its union. In exchange for small concessions from the union, the Governor has pledged a bailout of the agency. This approach does nothing to end its legacy cost problem. Without bankruptcy or large concessions from the unions, there is no long-term solution that does not involve more state tax dollars with each passing year. The Governor’s most recent proposed mass transit plan mentions increasing the mass transit allocation and requiring consolidation studies, but offers little in the way of real structural change whether in the management or in the underlying drivers of cost (Policy Briefs Volume 12, Numbers 39 and 44 and Volume 13, Number 9).
Issue Area: Property Reassessments
Work Effort and Results: Our research into Allegheny County property reassessments goes back many years and included a full-length report on assessment standards and practices in Pennsylvania and other states. Research efforts continued to analyze and report on the progress of the 2012 reassessment order. We debunked every argument put forth by the current and most recent Chief Executive as to why the reassessment should not be done. We have also weighed in on the court ordered reassessment in Washington County. Most recently the work culminated in Policy Briefs, Volume 12, Numbers 8, 9, 15, 20, 22, 31, and 48, and Volume 13, Number 1, as well as Report Number 2012-02.
Issue Area: Public Education
Work Effort and Results: The most recent Pennsylvania assessment exams showed a drop in the percentage of students scoring at the proficient or higher level. Education system apologists predictably pointed to declines in funding as the culprit while state officials claimed heightened security amid cheating accusations involving several districts. Our analysis (Policy Brief, Volume 12, Number 46) of affected districts debunks the claims that spending cuts were responsible for lower scores.
We also researched the large number of tax hike exemptions allowed by the State Department of Education allowing school districts to raise property taxes by more than the allowed index thus avoiding the referendum process (Policy Brief, Volume 12, Number 19). We proposed having the Legislature fix the problem by eliminating all exemptions, tightening the index, and loosening the grip teacher unions have on local school boards by eliminating teacher strikes and removing union favoring statutes that negatively management’s ability to manage finances in an efficient manner.
Issue Area: Pittsburgh Area Employment
Work Effort and Results: We continue to be one of the area’s leading experts and commentators on the Pittsburgh area’s employment picture. Research has culminated in Policy Briefs (Volume 12, Numbers 18, 34, and 47, and Volume 13, Numbers 2 and 7) that among other things look at trends and sectors that have demonstrated strength while also making suggestions on how the situation can be improved.
Issue Area: Economic Development
Work Effort and Results: We continue to monitor area economic development projects that ask for taxpayer contributions. We are the leading experts in tax increment financing (TIF), having first weighed in on the topic more than a decade ago (Report 99-06). Most recently we weighed in on a proposal to use a TIF on a former mill site in Hazelwood (Policy Brief Volume 13, Number 4). After years of failed attempts, this latest TIF is innovative as it is backed by local foundations and deserves further examination. We are also monitoring a proposal by a community group using government funding and other subsidies to build a grocery store in a low-income neighborhood. With escalating costs and continually pushed-back deadline going on five years, we question the economic viability of the project (Policy Briefs, Volume 8, Number 62 and Volume 12 Number 52).
Issue Area: Allegheny Institute Outreach
The Allegheny Institute’s staff members have been keynote speakers for community organizations. Our work is featured prominently in the media and reaches a wide national audience through our affiliation with the State Policy Network.