Four years after the state's highest court had the issue of base year assessments before them they said that the base year idea in and of itself was not bad, just that the way Allegheny County applied it violated the uniformity clause of the PA Constitution.  Problems with a base year would arise across the state, but that would happen at different times for different counties. 

Not long after a state senator from Allegheny County was quoted as saying "the impression I got from other colleagues around the state is, 'If the court's not going to make us do it, we're not going to do it,'...It just seems like no one's going to step up here."  One long time assessing official from southwestern PA once quipped that upon starting his job colleagues told him that the state would soon be getting rid of property taxes.

That was in 1969. 

So a huge grain of salt has to be taken when officials in Washington County prep for a hearing this month on moving forward with a reassessment note "We don't want to be the last county to go under this process. We want to fight to get it changed." The County last did a reassessment in 1981, but don't want to spend money on updating values that "might be outdated in three to five years".  One official even jested that imprisonment might be on the table, a possibility that residents of Allegheny County who followed the most recent County Executive race might remember.

Why the argument if the County agreed to go forward in 2008 if the state had not yet reformed the assessment process in the state?  Nothing happened, and now the County feels that it will? 

Under the terms of state law establishing improvement districts-be they for neighborhoods, business areas, a combination of both, etc.-it is incumbent on those against the plan, which normally involves levying an extra tax or fee on top of existing taxes to supplement and, frankly, improve, a targeted area.  In Pittsburgh, Downtown and Oakland have had improvement districts for some time, but in areas outside those the concept has not gained traction.

That's not to say that residents of Pittsburgh won't vote to levy higher taxes on themselves, as they did it last year to fund the Carnegie libraries.  But proposals for the West End, South Side, East Liberty, and now, Lawrenceville, have been defeated or not gotten to the drawing board.  We wrote about the Lawrenceville proposal last fall.  If the City verifies the vote as reported, the Lawrenceville proposal had close to 60% against it, well above the standard set by Act 130, which says an improvement district fails if 40% object. 

The most recent count of improvement districts statewide (from 2010) is 32, with about a third of them in Philadelphia. 

The Duquesne School District is about to move into the next step of school district financial recovery under state law as the Secretary of Education has just asked the County Common Pleas Court to appoint the person who has been acting as chief recovery officer to become a receiver under Act 141 as the Duquesne School Board opted to reject the plan to send the remaining students of the District (all of elementary age) to neighboring districts.  That request has been made on a voluntary basis (several have already said they won't) so there is a possibility that a state mandate would come to pass.

The court does not have to take the person nominated by the Secretary to be the receiver; it can name its own or ask for an alternate.  Whoever becomes the receiver essentially becomes the school board, except the receiver cannot levy or raise taxes.  The receiver has the power to implement the recovery plan, communicate with the state on a quarterly basis, make sure employees of the district are following the plan, tell the school board to raise taxes, and go to court to get a directive to get employees to comply with the recovery plan. 

The act says that receivership is to terminate three years after the receiver is appointed unless the state petitions the court for an extension.  Even after receivership is terminated the district remains in oversight from the state for a five year period, most likely to ensure that the district does not slip back into distress. 

The superintendent of Pittsburgh Public Schools wants to move relations with the charter schools in the City from what it is now, which she described as "certainly not a happy, collaborative one" to something else, where perhaps the PPS can learn by talking.  About 10% of the PPS' $520 million budget goes to pay for students living in the District but attending brick and mortar or cyber charter schools.  The most recent audited financial statement on PPS' website (for fiscal year 2009) showed that the ratio of PPS students to all charter students was 9.5 to 1.  In 2002 the ratio was 36.6 to 1-slipping enrollment in the PPS (down 25% over that time frame) and a large boost in charter school enrollment will have that effect.

That is for total (brick and mortar and cyber) but from the article it does not appear that the superintendent is going to seek out the leadership of cyber charters, so a deeper look at the charter schools with a physical presence in the City of Pittsburgh is warranted.  From the Pennsylvania Department of Education's institution search within the Pittsburgh-Mt. Oliver intermediate unit it is shown that nine charter schools are in the City.  Several CEOs of these schools were mentioned in the article, including one that has been around since 1998 and commented that relations in the beginning were "very adversarial...very tense". 

Five charters in the City-Academy, Career Connections, City High, Manchester, and Urban League-reported total enrollment of 1,342 in the 2006-07 school year.  With 30,885 students enrolled in PPS that year, the ratio of PPS students to students in those charters was 23 to 1.  In 2011-12, those same five charters had boosted enrollment to 1,511 (up 13%) while PPS enrollment fell to 26,653 (down 14%).  The ratio stood at 17 PPS to 1 charter student.  It is important to note that two additional charters opened since 2008 and there are additional applications pending.  In 2011-12 the nine charters in the City had a total enrollment of 2,284. 

Has the passage of time and seeing the staying power of several charters led to the change in attitude on the part of PPS in seeking the meeting?  Or is it simply different people in positions of power who may not be as openly hostile to charters?  Is PPS trying to get some "trade secrets" on what the charters are doing well in order to emulate them and head off future enrollment and financial losses? 

Will gold roll into the Pittsburgh area with the blazing Olympic torch?  Preposterous idea? Not according to the Mayor and the County Exec who suggest that the Olympic Committee's request for bids be considered.

Let's think about what this means.  The Committee says the City (region) will have to come up with $3 billion and have 45,000 hotel rooms.  That is now. What will be the price five years from now?  Moreover, according to an official who keeps track of such things, the area will need 60,000 hotel rooms and there are currently only 24,000.  How far out one has to cast the net to reach 24,000 rooms is not clear and, with no idea what many of the 24,000 look like, the notion that 60,000 will be ready by 2024 seems highly unlikely.

And three billion dollars? Where does that come from, Marcellus gas?  For a City in financial distress, the notion seems incredible.

But one thing is for sure.   Unless many more international flights and as well as more domestic destinations and flight origins are available in 2024 than there are currently at Pittsburgh International, the possibility for hosting an Olympiad is too remote to contemplate.

Then too, for the Olympic Games to be held in the Pittsburgh area, virtually every neighboring county would have to be involved offering sites for events. Soccer stadia, velodromes, tennis arenas, sailing venues, equestrian sites, kayaking sites, gymnastic arenas, etc. Massive amounts of land acquisition, infrastructure development and disruptions in many communities would be necessary.

There is a reason the summer Olympics games are held in large cities. There is more money, more people to be spectators, lots of hotel rooms, and bigger international airports with dozens of international routes.

Perhaps the Mayor and the Chief Exec are planning to grow Pittsburgh back to where it was 60 years ago. Then too, Philadelphia got the same Olympic Committee letter and that area is many times larger than the Pittsburgh area in terms of population and money and has a much busier international airport. It will be interesting to see how eager they are to bid and if they do how will Pittsburgh compete with them.

From a posting dated February 12 on the Reed Smith Employment Law Watch page we learn that the Pennsylvania Supreme Court has overturned precedent and awarded unemployment compensation benefits to employees who accepted an early retirement incentive package. The Court has decided that employees who accept early retirement are to be treated as employees who accept voluntary layoffs using the arguments that both constitute terminations of employment initiated by the employer.  Nice non-work if you can get it.

Whatever one thinks of the logic or illogic of this position, it clearly represents a windfall for employees who accept an early retirement package. The only real question at this point is who pays for those benefits? According to the Reed Smith writer, employers can actually take advantage of this ruling in two ways. Paraphrasing the author, (1) the employer can dangle the unemployment benefits as an added incentive to take the retirement package and (2) the employer could reduce the planned retirement incentive by the amount of the unemployment benefits. We would add that some combination of the two is also possible. 

Here's the rub. While the Court ordered unemployment benefits will likely lead to higher employer insurance payments and a bump up in their tax rate, for employers that reduce the severance package by the amount of the unemployment compensation, the increased payments will almost certainly be smaller than the reduction in the severance package thereby saving the company significant amounts of money. . Moreover, the higher insurance and tax payments are unlikely to cover the unemployment compensation received by the early retirees. Therefore, other contributors to the unemployment insurance plan or taxpayers will be stuck with most of the early retirees' unemployment compensation.  Not a good plan for the economy.

This is clearly something the state will need to keep an eye on. It could lead to serious excessive use of early retirement if companies can use the Court ruling to save themselves a lot of money by passing off a chunk of the cost to other contributors to unemployment funds.    

With the delivery of the budget for FY 2013-14 and the announcement of how to wrangle pension costs for state and school employees (our Brief discussed the highlights of the proposal) it should be noted that there is a lot more to the benefit puzzle. 

The spring edition of Education Next documents, through the use of Bureau of Labor Statistics data, the cost of teacher health care vs. private sector health care (teachers pay less toward single coverage, more toward family coverage as a percentage share) and on union and non-union rates of contribution (teachers aren't broken out as a sector by the BLS, but the authors did run comparisons overall to see that union health coverage costs were higher than non-union costs).  Finally, the piece looked at Wisconsin, where changes to collective bargaining resulted in decreases to district costs on single and family coverage.

How does this translate locally?  Let's look at the largest district in the County, the Pittsburgh Public Schools.  In 2011, the district paid $72.4 million in "employee benefits": dental insurance, life insurance, income protection insurance, social security contribution, retirement contribution, unemployment contribution, workers' compensation, self insurance medical health (39% of the total), retiree health care, and other employee benefits.  In 2013, the current fiscal year, employee benefits are totaled to come in at $85.3 million (18% higher than 2011) with the expected PSERS contribution doubled since 2011 and the self insurance medical health up $10 million from 2011 and representing 45% of the total of benefits.

The City of Jeanette-population 9,654 at the 2010 Census-is in big financial trouble.  One member of Council called it "desperate".  Big pension payments are due, in fact, they are overdue, to the police pension plan.  That plan had 13 active members and was 59% funded in 2011 according to PERC.   The plans for fire personnel and non-uniformed workers are not in much better shape.  A separate legal judgment may result in a special add-on tax to pay legal fees.  Layoffs are possible. 

In order to counteract the seemingly irresistible forces pushing upon it, the City may go the route of Act 47 or municipal bankruptcy.  It appears from the article that the City has already gone to the state for help as it was noted "the state Department of Community and Economic Development has recommended steps the city could take to initiate a financial turnaround, but council has disregarded the recommendations, putting the city deeper and deeper into debt."  That likely means Jeanette was in the early intervention program for municipalities as a way to avoid Act 47 or bankruptcy.

Either course will involve a decision by DCED.  As we noted this past summer, changes to Act 47 put the power of approving a Chapter 9 filing into the hands of the DCED Secretary.   

Based on data from the Pennsylvania Public Employee Retirement Commission (PERC), there were 298 pension plans in Allegheny County in 2011 (most recent audited year).  Based on active membership (in aggregate there were more than 18,000) about half of these plans had 10 or fewer members in them that year. 

How does that compare statewide?  In PERC's 2011 municipal pension plan report there is a higher percentage of plans (68%) that have 10 or fewer members than in Allegheny County.  PERC notes that it uses a threshold of 100 active members to determine whether a plan is "large" (100 or more) or "small" (99 or less) and, by that measure, 98% of local plans in Pennsylvania are considered small.  Here the plans in Allegheny County track much closer to that calculation, with 96% of plans having less than 100 members.  Only 10 plans have 100 active members or more-all of them are either related to the County or the City of Pittsburgh by being the primary plan of employees or of related authorities.   

In northeast Pennsylvania, the city of Scranton (population 76,000, only Second Class-A city in Pennsylvania, home rule since 1976, in Act 47 since 1992) and the county in which Scranton is located, Lackawanna (population 214,000, one of twelve counties of the Third Class, home rule since 1977) are proposing some very southwestern Pennsylvania ideas as of late.

For Scranton, a state senator has raised the possibility of a Pittsburgh-like shift of business taxes like the reforms made in 2005 when the General Assembly approved creating the payroll preparation tax and eliminating the mercantile and business privilege taxes.  The senator noted "This would be a tax shift...[however] I haven't gotten a clear view on whether it makes sense." Many of the arguments made in the Pittsburgh case pointed out the exemptions that had been crafted under the BPT and that a payroll tax would be fairer and fall on businesses across the board (non-profits and government are exempted from the tax).

Lackawanna County is debating whether to amend its home rule charter to replace the three commissioner system with an elected executive and a part time council, though that option would not be binding on a government study commission.  There is also talk of consolidating some of the administrative row offices that are elected under the County's charter (clerk of judicial records, recorder of deeds, register of wills) and appears that the whole of the matter might end up in court since there is a petition for a study of the Charter at the same time an ordinance calling for a referendum on the row offices.