South Side Parking Revenue

Based on a news article, stepped up parking permit enforcement and nighttime meter collection/enforcement in a targeted portion of the City’s South Side is going well according to some, but may be imposing costs, according to others.  The program is a pilot that is supposed to last for one year, with enforcement of meters and permits extending late into the evening on Fridays and Saturdays.

The article says that the City has reaped $50,000 in revenue from the pilot program.  How much does that represent in what the City expects to get from parking tax and related parking revenues?

Based on monthly revenue estimates from the City Controller’s office, the most recent month posted (April) the Citywide collection of parking tax revenue was $4.6 million; year to date was $13.4 million, which was $1.2 million higher than the year to date in April of 2016.  For the 2017 budget, the city is budgeting $53 million from parking tax; under charges for services, the City is budgeting daily parking meters at $8.7 million;  under fines and forfeitures, $7.8 million; and under intergovernmental $1.8 million from the parking authority.

A Look Back at Charter Schools

There is an ongoing newspaper series about the 20th anniversary of charter school legislation in Pennsylvania.  The first piece focused on the original intent of the legislation and the data related to charters (both brick and mortar and cyber) today.  The second piece examined the Clairton School District in Allegheny County and the District’s experience with charters.  That district has 113 students living in its borders that attend charter schools; no brick and mortar charters are located in the District.  The state Department of Education has a division set up to handle charter schools.

The Allegheny Institute did a lot of research on charter schools in its early years.  Two reports from 2000 (here and here).  Both offer a detailed history of the charter school movement and their approaches to K-12 education as compared with traditional public schools.  As noted in the latter report, a rejection of a charter school board was predicated upon the issues noted in the Clairton article: money.  “The cost of supporting charter schools is the most prohibitive thing” was noted by a board member (of an unnamed district).  Two years ago a different approval process for charter schools was floated to minimize the friction between the school district and the proposed charter.  And once upon a time the Pittsburgh Public Schools wanted to try and improve the relationship it had with charter schools.

Public policies questionable, curious & debunked

Pittsburgh reportedly is overhauling its tax abatement programs for developers. As the Post-Gazette puts it, the idea is “to coax developers to take risks in neighborhoods that have been bypassed in the rush to build Downtown and in other hot markets.”

 
Economically, there’s a major problem with this theory.

 
First, if developers have bypassed certain areas, it’s a pretty good sign that they don’t see a profit potential. The marketplace is speaking.

 
Second, given that scenario, what right do government officials have to turn taxpayers into venture capitalists?

 
That said, make no mistake: it is laudable for city government to attempt to streamline programs that, for many, long have been regulatory nightmares.

 
But even in this context, there’s no economic efficiency in bribing developers with public money to build anything in areas that the marketplace has deemed to be not sustainable.

 
Worse, in Pittsburgh’s effort to “fix” these programs, the P-G reports a “social equity” component will be added.

 
As Kevin Acklin, chief of staff to Mayor Bill Peduto, put it:

 
“We would like to define and incentivize projects that address some of the certain set of social equity goods that we’re hoping to advance as a condition to that public money,” he said.

 
Ah, not only attempting to yet again pick winners and losers but engaging in government social re-engineering to boot.

 
“Social equity” has become a darling phrase for “progressives.” When “progressives” were “liberals,” they called it “social justice.” And it should continue to be a red-flag phrase for thinking people.

 
Indeed, as a commentator once put it, there is no social equity when an inherent right of all men applies only to a few.

 
But as he also noted, the “social equality” pushed by contemporary “’change agents’ … yields inequality.”

 
That is, “It creates ‘class-based’ rights and not ‘universal rights.’ It imparts an arbitrary ‘duty’ on a group of people. It balances a society on bias and not merit.”

 
And certainly not on any sound economic principle. Which is a poor foundation for formulating any public policy.

 
Government leaders in Pittsburgh are on the bandwagon to divest the city’s pension funds from any fossil fuel-related companies.

 
But as the Tribune-Review reported on June 19, the city’s already beleaguered pension funds could lose nearly $500,000 a year.

 
The potential pension-loss information comes from a new study by a Chicago economics consulting firm. It concludes that the nation’s top 11 public pension funds could lose trillions of dollars in such a divestiture.

 
There’s a curious public policy, eh? And to what end? The Trib adroitly reports such a move would have little effect on fossil-fuel companies. And it would have no effect on the climate.

 
Yet one Pittsburgh officials says there’s “good reason” and a “philosophical basis” to do so. Which, of course, given the facts on the ground, does not compute.

 
Pittsburgh Mayor Bill Peduto continues to vow to transition the city to 100 percent renewable energy sources by 2035. But he would be wise to review a new paper in the “Proceedings of the National Academy of Sciences” debunking the notion that the U.S. can be powered exclusively with renewables.

 
Twenty-one top U.S. scientists have picked apart, piece by piece, 2015 research by a Stanford engineering professor and a University of California, Berkeley research engineer.

 
That 2015 study regularly has been cited by envirocrats; some of Peduto’s remarks resemble some of that study’s claims on a broad scale.

 
The bottom line of the debunkers is that the original study’s math doesn’t add up in a variety of critical areas. To wit, as just one example, two California-sized pieces of land covered with hundreds of thousands of wind turbines would be required to produce the amount of electricity claimed.

 
Thus, as Robert Bryce of the Manhattan Institute notes in a National Review commentary, the economic and technical viability of a 100 percent renewable-energy system were “wildly exaggerated.”

 
Bryce also recounts the astute point made by another scientist that Peduto should consider in his zeal to cast off fossil fuels, given the region’s shale gas revolution: Wind energy requires about 700 times more land to produce the same amount of energy as a shale fracking site.

 
Colin McNickle is a senior fellow and media specialist at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).

Weekend essay: Ahhh, Warwood

Summer days were shady but muggy at Warwood, my paternal great-grandparents’ home, tucked into a mountainside whose natural springs fed Glenns Run in West Virginia’s Northern Panhandle.

 
As kids in the 1960s, we’d visit often to keep the overbrush at bay, mow the grass and hear tales of Warwood’s past, including those of a coal mine, a mountaintop golf course, horseshoe courts and concrete-lined goldfish ponds long shuttered, long overgrown and long dry.

 
The work was hard but the rewards were sweet. There always was a tall Boston Cooler (root beer over vanilla ice cream). And if the work was to take the day, a fried-chicken dinner from Great Aunt Mary’s old iron skillets always left full bellies little and large.

 
The family’s Independence Day celebration moved to Warwood in the 1970s. Brother Shannon reintroduced pyrotechnics to the gathering. Family elders dusted off a blast from the past — two small homemade cannons from the 1930s.

 
Nobody’s ever said whether it was by sheer engineering genius or by serendipity, but the green apples of each July 4 were the perfectly sized ammunition. The creek across the road was the goal. But hitting a passing car was a prize, too.

 
Warwood is long gone; how troubling it remains on return visits to see only the slide of a mountainside where, at one point, five generations of Family McNickle so regularly gathered. There is an abject sadness in the silence of a place that once hosted such love, laughter and hijinx.

 
But there are two mementos.

 
There’s a small birdhouse made of shake siding from Grandma Nick and Pap Pap’s house that hangs from my front porch. It “attended” elder daughter Taylor’s Outer Banks wedding five years ago, representing her forefathers.

 
Then there’s one of those Independence Day cannons – with the July 4, 1933, date of its debut inked on the side – that graces my fireplace mantel each Fourth.

 
And if you put your ear to each just so, you can hear the voices of Warwood’s past, if not the “PLUNK!” and the “THUD!” of the apples connecting with their moving targets — one wet, others steel.

 
Colin McNickle is a senior fellow and media specialist at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).

County’s CLR Up Slightly

The State Tax Equalization Board (STEB) has published its list of common level ratios (CLR) for counties for 2016.  The CLR is “…the ratio pf assessed value to current market value used generally in the county as last determined by STEB”.  The CLR is the average of individual sales ratios for valid sales in the previous calendar year, certified on July 1st of the following year, and is in use for the following fiscal year.

In other words, the 2016 CLR takes sales from January 1 through December 31, 2016, will be certified July 1, 2017, and be in effect from July 1, 2017 through June 30, 2018.  We wrote about the 2015 CLR for Allegheny County last August when it was 87.1 and expanded on it this year when analyzing 2016 appeals.  Based on analysis of average home prices we wrote that it was a strong possibility that the 2016 CLR would fall further.  However, the ratio is up slightly, from 87.1 to 87.4 based on STEB’s document.

Since the CLR was 100 in 2012 when properties were reassessed, it fell for 2013 (90.8), bumped up in 2014 (92), fell again for 2015 (87.1) and bumped up again for 2016 (87.4).  The previous decade between 2002 and 2012 saw year over year decreases in the CLR with the exception of 2008 when the CLR rose to 87.5 from 86.5 the year before.  Based on a Judge’s ruling the CLR can be used in appeals in Allegheny County, and the appeal activity for 2017 will be analyzed in early 2018.

One Week Left in Fiscal Year: What Will School Taxes Be?

We’ve done plenty of work on school tax millage rates, particularly in Allegheny County among the 41 districts that operate on a July-June fiscal year with a single tax rate on buildings and land (that leaves out Pittsburgh Public Schools and the Clairton School District).  This year (the 2016-17 fiscal year) the average school millage rose 2.1% over the previous year.  Twenty two of the 41 districts increased millage.

Thus far there are a few districts that have had news coverage on their final millage rate.  Baldwin-Whitehall School District increased its rate 1.12 mills; their millage rate was cut 2 mills in 2014-15 and has risen each year since then.  Brentwood School District taxpayers won’t see an increase; the board wanted to give them a break.  Since 2013-14, the year when millage rates were reset to comply with the County reassessment, Brentwood’s millage has increased 19%, from 24.8 mills to the current 29.5322 that was held and adopted for 2017-18.

Deer Lakes and Highlands are holding millage rates steady; neither district has increased tax rates since the 2013-14 adjustment.  As mentioned in Monday’s blog, North Hills increased its millage, and Plum School District boosted its millage by 0.8 mill, giving the District back to back increases.  Qualified homesteads receive school property tax relief from slot machine gaming–but all types of property see any millage increase on their tax bill.

More coverage should come this week, and a comprehensive list should be available in the near future.

Head-scratching public policies

There’s a milk surplus in Western Pennsylvania. And we’re not alone. It’s a nationwide problem. Though there are many, many moving parts in the equation, it is not overly simplistic to lay the blame squarely at the front stoop of market perversion.

 
Think of the milk lobby that continually secures government propping up. Think of compliant elected officials perennially vowing to “save” the dairy industry – from itself.
The simple fact of the matter is that too much milk has been produced for too long. Milk routinely is being dumped on dairy farms. Government cheese stocks, purchased to “help” the industry, are at their highest levels in 33 years (800 million pounds); butter reserves – now 272 million pounds – are at their highest levels in 23 years.

 
Yet herd sizes seem to keep increasing. The number of dairy cows – 9.4 million as of March – represent a 20-year high, the U.S. Department of Agriculture reports
Market Watch reports that “U.S. dairy farmers’ big bet on global demand for milk is souring.”

 
But even then, there’s a mindset in the industry and among far too many lawmakers that is antithetical to sound economics. To wit, this, from a June 15 Tribune-Review story:

 
“Pennsylvania Farm Bureau spokesman Mark O’Neill said the entire country, not just Pennsylvania, has experienced a milk surplus over the last two years. That oversupply drives prices down, which causes farmers to increase production.”

 
Come again? So, there’s too much milk. That depresses prices. So farmers flood the market with even more milk?

 
It is, of course, the product of more than a century of federal price supports/controls and marketing restrictions – federal and state –that just keep snowballing.

 
And until real marketplace principles are returned to the dairy industry, this mess will continue.

 
The Associated Press reports that $39 commercial flights between John Murtha Johnstown-Cambria County Airport and Baltimore-Washington Thurgood Marshall Airport will bow on July 17.

 
Rising gate fees at Dulles International Airport – that would make the flights “too expensive” — necessitated the change, officials at the Murtha airport said. The switch will cut $20 from each ticket.

 
There is, however, more to this story.

 
Do remember that flights out of Murtha, 60-odd miles east of Pittsburgh, are federally subsidized almost entirely by the federal Essential Air Services (EAS) program, as The Washington Examiner reminded in a March story.

 
Then, reporter Philip Wegmann booked a roundtrip flight from Dulles to Murtha and paid just under $150. But, he noted, the additional average taxpayer subsidy for each flight into and out of Murtha is $266.

 
“Considering that I was the only passenger” on the nine-seat turbo-prop, “my own subsidy probably was higher,” Wegmann wrote.

 
The Trump administration’s first budget seeks to defund the $175 million EAS program as fiscally irresponsible. No kidding.

 
The Allegheny Conference on Community Development took out a full page ad in the Post-Gazette on June 16 to tout a “transformed, balanced and future-focused” Pittsburgh.

 
The main headline: “The Pittsburgh Story.” The secondary headline: “Three Primary Points.”

 
The first point was to “Build a balanced, knowledge-intensive economy.” There’s a reference to “balance(ing) our economy to GDP” in “5 key sectors” and “$3 billion annual funding to government, corporate and academic R&D.”

 
There’s also a reference to the city having the “third-highest proportion for young people with bachelor’s degrees or higher among 15 benchmark cities.”

 
But there was no mention of Pittsburgh’s abysmal public school system that redefines the word “disaster.”

 
The second point was to “Create a valuable energy portfolio.” There’s a reference to “$1 billion annual funding to energy R&D.” There’s also a reference to nearly 300 “LEED certified projects.” But that program long has been suspect for it gross economic inefficiencies and its “environmental” charlatanism.

 
And there’s a reference to “Marcellus Shale is the world’s 2nd largest natural gas play.” But what role did the conference and/or city officials really have in its creation? Nature did that millions of years ago. And if anything, the tapping of this incredible natural phenomenon comes despite the central planners, government regulators and envirocrats.

 
The third point cited in the Allegheny Conference ad was to “Invest in quality-of-life improvements.” Among those improvements cited – the city’s cultural institutions and Pittsburgh’s listing by an Internet website as the “#1 food city.” Another is a bike trail to Washington, D.C.

 
Really?

 
“We’re collaborating to create an economy that’s neither old nor new, but uniquely ours and a place that continues to evolve to become the best it can be for everyone who lives, works and visits here.”

 
How about, instead, collaborating to fix Pittsburgh’s lousy schools, solving a chronic public pension problem, saving a water system on the verge of collapse and lowering higher and higher barriers to economic development?

 
Colin McNickle is a senior fellow and media specialist at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).

A Snapshot of Gasoline Prices in PA and OH

Summary: In light of the recent request to reverse the flow of transport fuels along the western half of the Laurel Pipeline, a question arose:  are gasoline prices in Pennsylvania much different than those in neighboring Ohio?  At the retail level the answer is yes.  However, when taking into account each state’s gasoline tax, the answer changes.  Differences are found between prices paid by Pennsylvanians in the western part of the state than those in the east.

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A previous Brief (Volume 17, Number 24) analyzed a request to reverse the flow in the Laurel Pipeline. This reversal would send fuels from west in Midland, Beaver County to Altoona rather than the east to west flow currently coming from Philadelphia.  Such a reversal would take advantage of refined transport fuels from Midwest refineries instead of from refineries in the Philadelphia area.  The two sets of refiners seem to have differing prospects for future growth. And this brings up another important question about the price consumers are paying for gasoline.

This Brief looks at the price of gasoline in both Pennsylvania (PA) and Ohio (OH) to determine why there are differences, if any, paid at the pump.

To begin, note that the U.S. Energy Information Administration (EIA) has data on the wholesale/resale price of gasoline by refiners for each state.  The EIA defines “sales for resale” as “sales of refined petroleum products to purchasers who are other-than-ultimate consumers”.  Thus this is the price of gasoline being sold by refiners to companies who will then sell it along to consumers.  Comparing the average monthly per gallon price between PA and OH shows interesting results.  From 2010 to 2013, PA’s average monthly wholesale/resale price charged by refiners was more expensive than in OH ranging from 1.60 cents greater in 2010 to 7.28 cents in 2012.  However, from 2014-2016 PA enjoyed the advantage with the average monthly price of gasoline at the wholesale/resale level being cheaper in the range of 0.3 cents (2014) to 2.76 cents (2016).

Recently, through the first quarter of 2017, the average monthly price in PA has once again risen above the OH price by 1.03 cents.  The average difference in the monthly wholesale/resale prices during this time period (2010 through first quarter 2017) is about 1.5 cents higher for Pennsylvanians. Not a substantial difference.

Bear in mind that PA has the highest state gasoline tax in the nation at 58.2 cents per gallon (the diesel tax is 74.6 cents per gallon).  The PA gasoline retail tax reflects the large wholesale fuels levy imposed by Act 89 in 2013.  OH’s state gasoline tax per gallon is 28 cents with the same rate for diesel.  Since both states are subject to the same federal gasoline tax rate, it is ignored for purpose of comparing retail prices as it should have little bearing on retail price differences. A sampling of retail gasoline prices in PA and OH shows only minor differences after the state gasoline tax per gallon is subtracted from the prices in each state.

Each week the AAA website (gasprices.aaa.com) provides averages of retail prices by state and regions of the states.  On May 15th of this year, the statewide average price for regular gasoline in PA was $2.573 while in OH it was $2.259—a difference of 31.4 cents per gallon.  Removing the effect of each state’s gasoline tax brings the price before state tax to $1.991 in PA and $1.979 in OH—making PA 1.2 cents higher. The difference in the price of diesel was just 2.3 cents.  Two weeks later on May 31st, the average price of gasoline in PA came in at $2.584, 26.6 cents higher than OH’s $2.318. But when the state tax is removed, the price difference puts PA at 3.6 cents cheaper ($2.002 vs. $2.038).  And most recently, on June 14th, the average price of gasoline in PA, without the state tax, was only 2.4 cents more expensive than OH’s average price minus their state tax.

Of course these are snapshots for the statewide averages.  Note there are fluctuations over short periods but the prices, excluding state taxes, are fairly close.

It is often remarked that differences also exist between prices in the eastern half of PA and the western half. Using two metro areas in each half of the state, Erie and Pittsburgh in the west and Philadelphia and Scranton-Wilkes Barre in the east, this assertion can be examined. The average price for a gallon of regular gasoline in the two metros on each side of the Commonwealth on May 15th show western metro prices to be 8.8 cents more expensive than in the eastern metro areas.  One year earlier for the week of May 15th, it was 5.6 cents more expensive. Two weeks later the May 31st reading had the western metros 5.9 cents higher, and one year earlier it was 8.5 cents.  On June 14th that difference was 6.5 cents higher for the metros in the west.  Perhaps it’s just coincidental that these data points put western metro prices higher than in the two eastern metros.  But the price gaps are large enough to suggest there is an underlying factor explaining the gap. Because taxes are not a factor in the price disparity could it be the cost of transporting the fuel driving the price differences?

If that is true it makes a stronger case for reversing the flow in the Laurel Pipeline to provide more fuel to the western part of the state.

Will Transit Conference Find Different Trends a Decade Later?

In October of 2018 a conference will be held in Pittsburgh on transit use, mobility, and development near transit stops.  The website for the organization involved with the conference notes that its conferences–this year’s will be held in Denver–“showcases the link between land use, transit, and development”.

The Port Authority commissioned a study in 2014 by the Urban Land Institute that mentioned increasing its efforts on transit oriented development–the current PAT CEO stated in the article on the conference that “For a lot of years, the Port Authority viewed its work as taking people to work and back and thank you very much, and it sat on some very important assets, particularly land, and so once it was clear that those assets needed work, things started to happen, and the Port Authority is dedicated to that.”  The Port Authority has a document that provides guidelines for transit oriented development.

Back in 2008 when the Transit Revitalization Investment District (TRID) concept was relatively new a study on development near the light rail stations in the South Hills (Dormont and Mt. Lebanon) was undertaken to see the potential for high density development near the light rail stations.  That found both communities were high volume users of transit, but population loss was evident and occurred at greater rates near the stations than the community as a whole.

As we pointed out then, if there was a great demand to live near transit, developers would rush in to develop property owned by the Authority.  This is supposed to be the year when development at the Castle Shannon trolley station is to begin, and the Authority already expended $3 million with a consultant to carry out station improvement projects and identified sites that are “prime for development”.  Can the conference provide more insight that what already seems to be present?

North Hills School Taxes Rise Again

For the 2017-18 fiscal year the board of the North Hills School District (Ross and West View) voted to raise the property tax millage by 0.2 of a mill, bringing the millage to 18 mills total.  Based on a news article on the increase, the average home value in the district is $135,700; applying 18 mills to that value results in a tax bill of $2,442.  Based on data from the Department of Education on homestead tax relief from slot machine gaming, the estimated relief per homestead for North Hills in this fiscal year (ending June 30th) was $126–that would lower the tax bill to $2,316 for the $135,700 home.

One member of the board noted that “…the state puts us in a position where we are constantly going back to the taxpayer”.  In our analysis of school taxes under Act 1 of 2006 guidelines, North Hills school millage increased each year from 2006-07 to 2012-13, with the exception of 2009-10 when the millage dropped 0.25.  After adjusting millage in 2013-14 to comply with reassessed values (17.06) each year since millage has climbed.

As we pointed out in a 2014 Brief on the debate over how Pennsylvania distributed school funds (prior to the creation of the funding formula in 2015) we presented a variety of funding scenarios and North Hills (where a discussion on school funding took place) relative standing on % of budget from the state, dollars per-pupil from the state, and what funding would look like for North Hills if the state were to assume all K-12 funding and gave districts an equal amount per-pupil.

As was noted last week, the proposal to end school property taxes and shift funding to the state through higher personal income and sales taxes while returning the local dollars from property taxes on a dollar for dollar basis has been introduced.  This would certainly affect the board of education in North Hills and their role vis a vis the property taxpayer.  Of the $16,819 in revenue per-pupil (from 2015-16 data) $12,770 (76%) came from local sources. It would be interesting to know their stance on the proposal.