A resident of the Southside is facing assault charges for shooting a man with BB gun who refused to heed the resident's demands that he stop urinating on his property. This after the man became fed up with the constant abuse of his residence by revelers.

 

So, now he must go to go court and hope for the best. Ironically, the man shot was charged with public urination but his charge was dismissed. 

 

The history of the unsanitary, filthy behavior is one of longstanding and repeated pleas to the City for help from the residents have largely gone unheeded. If something is not done, it is just a matter of time before someone gets badly hurt.

 

If the City cannot offer adequate police patrols, it should require the restaurants, bars and saloons to build an adequate supply of public convenience facilities and keep them clean. Obviously, their own facilities are not enough to keep folks from wandering into alleyways or storefronts to relieve themselves. Anyone caught by police publicly urinating would be assigned toilet cleanup duty for two weekends. A second offense, three months and a third offense, 30 days in jail.

 

The City should ask the County for a share of the drink tax revenue collected by Southside establishments to help with patrols and perhaps construct toilet facilities to prevent drunks and miscreants from having to relieve themselves wherever they please.  There was a proposal for an improvement district and an additional tax, but that plan did not move past City Council. 

 

In short, this problem is not a hard one to fix as City Council apparently believes it is. When one of your neighborhoods is being treated like a sewer by residents and non-residents alike, the Council should get angry and act accordingly.

 

 

An op-ed piece today compares the Port Authority to a down-on-their-luck person who comes begging for money and, against the better judgment of the person of whom assistance is requested, gives in.  The "askee" this time is the Regional Asset District, which last week included in its budget a $3 million allocation for PAT as part of a big funding package.  "it should be a one time thing" the op-ed notes.

 

That's going to be difficult: the County Executive, who appoints all of the PAT board members and four of the seven RAD board members, noted back in August that he will "ask the asset district board...to make a $3 million annual commitment, not just a one-time grant." We also documented previous shifts or "flexes" of money to the down-on-their-luck authority as recently as two years ago when the Southwest Planning Commission played the role of the benevolent one, being asked by the Governor to approve money for PAT.  That board, in 2005, said that the last time it flexed money would be the last time it flexed money.  They did flex the money, basically saying that they weren't serious when they said they would not shift money again.  The RAD board will be in the same position next fall: previous experience suggests it won't be the one to make the PAT allocation a one time thing. 

 

The Governor's report on public sector pensions-which we blogged about earlier in the week-has set a lot of discussion in motion.  So too have the testimonies collected by the Public Employment Retirement Commission, which was mentioned in an editorial this morning by the head of the Township Supervisors Association.  Some of the presenters mentioned consolidating plans, which the Association head disagrees with, noting correctly that many of the state's biggest plans-SERS, PSERS, Philadelphia, and Pittsburgh-have significant problems and that a solution should not "make the healthy swallow the same bad medicine as those in trouble".

 

We agree: in fact, in testimony we presented in 2008 to a hearing of two state Senate committees, we noted "There seems to be little interest at the state level to consolidating plans based on past discussions.  It has been mentioned before, but nothing has come to pass.  The problem with such an approach is that municipalities with well-funded pensions will view a merger or consolidation as a bailout of the lower-performing plans. In addition, the nationwide experience shows that it is almost non-existent for a state to assume total control and responsibility for local pension plans."

 

But perhaps there is another way to think about consolidation in the future which does not involve lumping the good plans in with the bad if the state were to think about the employees of the state (SERS), the employees in education (PSERS), local police, firefighters, clerks (covered by one of the 3,000 local plans administered locally or through the PA Municipal Retirement System), county employees, authority employees, etc., etc., in which enrollment in those plans is closed as of a certain future date and all new employees of the Commonwealth, its local governments, its authorities, agencies, school districts, community colleges, state universities, are enrolled in one new statewide plan with a clear employer and employee contribution mix.  The existing plans would stay in place until there are no more participants in them and then the state would fully transition to the new unified plan.  It would obviously take a very long time (and extends the further such a change is put off) but might be worth exploring.    

 

 

Back in the early 1990s the state Legislature granted Allegheny County authority to establish a Regional Asset District (RAD) and to impose a one percent County add-on sales tax to fund the district. The County Commissioners quickly voted to do so. There was no referendum asking the voters to approve the tax. This outrage was not repeated when it came to the plans to impose a sales tax for stadiums in 1997.  That tax was roundly defeated by the voters and in all likelihood so would the RAD tax have been if it had been put to the voters.

 

But it is the law and the RAD tax has been collected for 18 years funding all sorts of things including new stadiums and propping up the Civic Arena.  It was used to fund the Pittsburgh Development Fund that helped underwrite such memorable debacles as the Lazarus Department store. The Pittsburgh Schools also received a dollop of the tax revenue but that is now being sent to the City.

 

Now we have the spectacle of the RAD board approving $3 million for the Port Authority (PAT) to help fund the County's matching contribution in order to receive additional state funds to fill a $64 million dollar deficit at PAT. Note that reserves had to be tapped to get the $3 million. Of course that means some other applicants or potential applicants could have gotten more money if the dollars were not going to PAT.

 

And why does PAT need the RAD money in the first place? In brief, because the state Legislature and the Governors over the years have done a remarkably inept job at controlling PAT by giving it a monopoly in the County and then giving the union employees the right to strike-something only three states permit. The right to strike a mass transit system is the most powerful bargaining chip any union can hold. Just the threat of a strike sends management into flights of terror and riders into paroxysms of anxiety about they will get to work. Businesses then join the chorus of pleading to give the union what it wants. Anything but a strike.  So using the kryptonite equivalent of a bargaining advantage the unions have been able to extract one of the best, if not the best, compensation package and union favoring work rules in the nation.

 

Thus it was that PAT became an extraordinarily expensive transit operation, inefficient and destined to go bankrupt. If only state law would permit bankruptcy of PAT-which unfortunately it does not. So for a decade or more PAT kept sliding deeper into the ravine of financial chaos only to be temporarily bailed out again and again by the Governor riding to the rescue with highway money to fill the budget holes. Only this time, the hole was too big for the state to fill by itself. After all, the state is not flush with cash lying around to be redirected to PAT. Moreover, there are many in the Legislature from other parts of the state who are repulsed by the idea of tossing more of their constituents' tax dollars at the outrageously expensive and inefficient PAT.

 

In this latest iteration of asking for state money, the Governor was far less generous than previous Governors and forced the County, the unions and the management to come up with a big chunk of the $64 million projected deficit. Of course the union share was a pittance relative to their share of the cost structure. The County, to raise its share, went immediately to the pot of money at RAD, asking for $3 million a year for ten years. The argument being that transit is too important to allow the major cuts that could be required if the state money is not forthcoming.

 

Dutifully, the RAD board agreed to hand over $3 million, no doubt under enormous pressure from the County Exec, PAT board members and the business community.

 

There it is. In short, the Legislature allows the County to create a revenue stream with one hand and then gives a "take all you want card" to the transit workers union with the other hand. Guess what was inevitable as the robins in spring? Eventually, the RAD money bags would be tapped for PAT. And so it goes.

 

At the very least the Legislature should have prohibited RAD money from being used to fund entities other than educational, recreational or cultural.  There are some who will say this grab of RAD dollars for PAT could not have been foreseen. But they would be wrong.

 

Then does that make the various methods of reform the ghosts?  The video game reference, made by the Governor and noted in a new report on pensions from the state Budget office, arises from the state's pension contributions in which money put toward pensions devours dollars that would otherwise go to the fundamental areas of state policy such as public safety, infrastructure, education, and health. 

 

The report deals with the two pension plans administered directly by the state-one for state employees (SERS) and one for public school employees (PSERS)-and no mention is made of dealing with the pension plans that exist at the county, municipal, or authority level.  There are about 2,000 of those in Pennsylvania, but diagnosis of the problem (the report looks at the dozen years or so of legislative enhancements and corrections to pension funding) and exploration of solutions deals with the two big statewide plans.  Believe it or not, the funding ratio for both hover around 68%, making them "moderately distressed", which is where the beleaguered City of Pittsburgh's plans are as of now.

 

The report lays out a framework for how to achieve changes, including looking at other states for guidance.  Interestingly, with data from the National Conference of State Legislatures there has been a fair amount of reforms that have affected new and current employees as opposed to just singling out employees that have yet to be hired.  Increasing employee contributions, a reduction in increases to post-retirement benefits, and restrictions on return to employment tended to hit current and new employees in recent years.  If there were changes to age and service requirements, changes to average final salary calculations, or vesting changes they tended to fall on new hires predominantly or exclusively.  Pennsylvania's Act 120 of 2010 made changes that mostly affected new hires. 

 

In the 2013 preliminary budget for the Regional Asset District (RAD), total proposed spending would top $88 million: $85.5 million from the half of the sales tax proceeds that go to the District to fund cultural, recreational, and sports facilities; close to $3 million from reserves; and the rest from interest. 

 

The District allocates money to contractual assets (the zoo, libraries, the aviary etc.), multi year assets (money to the Sports and Exhibition Authority for debt service), annual assets (a group that includes a variety of organizations that make annual petitions) and a small share for administration.  Next year marks the beginning of a new category-provisional-for $3 million requested by the Port Authority (PAT) as part of an agreement brokered by state, local, PAT officials and PAT employees to avoid service cuts in September.  Recall that we pointed out in a Brief earlier this year that RAD had come to the aid of another authority from 2007 through 2010 (the SEA) but the SEA was lumped in with the annual grants along side groups like the Pittsburgh Symphony and the Civic Light Opera. 

 

It is not clear if, by creating this new category, PAT will be required to be put in line for budgetary consideration each year or if the $3 million is guaranteed for a certain number of years.  The preliminary budget, which was put together by the District's allocations committee, notes that "the decision on this unique request needs to be made by the full board after review of the information that has been provided by [PAT] since the [initial] hearing and after public input is received".  The committee pointed out that inclusion in the budget did not constitute endorsement, but to show what the budget would look like with it in. 

 

Contractual assets are slated to get $1.8 million more in operating money next year than this year; the multi year debt service payments to the SEA are expected to go down slightly (by $44k due to a drop in arena debt service); annual operating grants are up by $209k, but there was some churn from 2012.  This year, 77 organizations received annual RAD operating support; in next year's preliminary budget six of those organizations are gone (they received a total of $74k in 2012), leaving 71 organizations that received 2012 operating support in consideration for 2013.  Of those, 45 are to receive more money than they are in 2012 (increases vary considerably) and the other 26 are slated to receive the same as they did in 2012.  There are three organizations that appear in the 2013 preliminary budget that did not get annual operating support in 2012 (the three combined will get less than $10k). 

 

The County Executive released what he anticipates the 2013 property tax rate to be this past week.  As a result of changes to state law in 2005, the County and municipalities have to adjust millage rates following a reassessment to be revenue neutral.  Subsequent tax rate hikes have to occur in a separate action.  Recall that last December the County hiked millage rates from 4.69 to 5.69; with new values countywide were expected to rise 35% (that's still what the County's assessment webpage shows) but a newspaper article said the County is basing its new tax rate on a 20% increase in value. 

 

How will that tax rate, if it holds, affect tax bills?  Property owners can use the millage rate to calculate it against the 5.69 rate in place.  Assuming no change to the homestead exemption that allows a homeowner to reduce the assessment by $15,000 for County tax purposes, a home assessed at $100,000 would apply the millage against $85,000.  This year, the County tax bill for that home would be $483.65.  If the assessment rose to $120,000 for 2013, the homeowner would take the homestead exemption (now the County assessment would be $105,000) and apply a millage rate of 4.73 against it and the tax bill would be $496.65, a $13 increase.

 

We went back to the data complied for our most recent report and applied the proposed millage rate against our 100 sales.  We actually had a scenario in the report which estimated the County rolling the millage rate to 4.69 mills, so the 4.73 rate is not much different.  Of the 100 sales, 57 properties would pay more in County taxes, while 43 would end up paying no more or less.  The 4.73 rate moved one property in our sample (in quartile 3) from paying $2 less to breaking even.   

 

Staring at a nightmare of intertwined problems seemingly of Gordian Knot proportions, Pittsburgh's Superintendent issued a plaintive call for help in the form of ideas about how to solve the conundrum. Joining in a non-helpful way, the Post-Gazette  weighed in editorially praising the school for not raising tax rates for twelve years, ignoring entirely the tremendous ongoing decline in enrollment over the period and the increases in other revenue that have allowed the schools to keep spending well above $500 million.

 

Here's an idea for the Superintendent. Send to the Board a proposal to set aside $10 million to create a thousand $10,000 scholarships that can be used by parents who wish to send their children to non-public alternatives.  With the current spending of over $21,000 per student that would represent a savings for taxpayers. And if the recipient students perform better academically, which most probably will, it is a win-win for taxpayers and students. If demand for scholarships is greater than a thousand, arrange to expand the program year after year.

 

But here's the problem that will have to be confronted. With declining enrollment, school employment, including teachers, would be reduced. No doubt there will a lot of screaming by the unions and their supporters about the cuts. If that happens, the parents of school children in the City will be able to see what is really important to the Board-their kids' education or kowtowing to unions. 

 

The Board will be under intense pressure from unions and the indefatigable defenders of the public education monopoly who have long since forfeited any moral claim to their anti-choice positions. Years after year and decade after decade miserable academic performance and wasted potential of so many students lives.  Where do they go to get back the opportunity derived from a good education? 

 

The truly remarkable part of the story is that the union and the defenders of public monopoly education apparently feel no responsibility or remorse. For the unions, it is understandable if not defensible. They are about their members and their power.  Students are and have always been secondary.  Maybe some individual teachers would like to put students first but they toe the union line when they have to choose between the students and union loyalty.

 

Bottom line, the Superintendent should make this such an important priority that she will threaten to resign if the Board refuses to consider the idea. 

 

And the cries for the Governor to find new revenue to fix roads and bridges -and fund mass transit -grow louder.  This while the Governor wants to protect taxpayers from higher costs.  He knows other problems are looming large such as the whopping increases in pension funding that will be required over the next few years. Where will that money come from?  There are projected Federal Medicaid funding cuts. How will that be made up?

 

It is marvelous to watch the crowd that supports an outrageously expensive and inefficient mass transit system and wants the state to pour more money into it grouse about transportation needs. Indeed, the Governor, against his own better judgment and the strong case that was made not to bail out the Port Authority, has committed $35 million a year in additional state tax dollars for the Authority.  No one knows where that money is coming from.

 

What is really galling about the latest round of caterwauling regarding the Governor's inaction on raising taxes and fees for transportation is the assent given explicitly or tacitly by the same complainers when the previous Governor was moving hundreds of millions in highway funds to underwrite the Port Authority's egregious spending.  That money was wasted rather than fixing road problems.

 

Moreover, why was it that the people who are now so exercised about the Governor's inaction could not contain themselves at the prospect of tolling I-80 to raise funds for transit? Anyone who bothered to look at the law could have known that tolling I-80 for any purpose other than funding maintenance and improvements on I-80 was not going to happen. Yet the then Governor, the Legislature and all the spendthrift supporters of mass transit all thought it was  great idea and that somehow the presidential administration would get it approved notwithstanding the law.  Mirabile dictu, it did not cave to political pressures from the former Governor. Years were wasted in dealing with cost issues and seeking funding sources. And then the sharp economic downturn put on hold any meaningful discussions.

 

Road work does need to get done. How about we ask the Feds to lift the Davis-Bacon prevailing wage requirements?  That would lower costs dramatically. Not that it will ever happen. But the state could eliminate prevailing wage requirements on projects not using Federal dollars. Where is the clamoring for something sensible like that?   Why is it always the taxpayers who must make the sacrifices? Why not some concessions from those who drive the costs far above where they would be in market based system?

 

 

If an exam with 132 questions was administered at any of the schools in western Pennsylvania and the student correctly answered 85 of those questions, the resulting percentage would be a 64%.  On most grading scales that would be a "D": if the student was previously and "F" student, then there is progress. 

 

Unless dealing with bond ratings, letter grades are rarely handed out to cities and towns.  As Pittsburgh waits to hear if the state will release it from Act 47 distressed status, the team charged with recovery (in place since 2004) published its rescission report that shows what Pittsburgh has accomplished: debt levels are down, there is labor peace, a trust fund has been established for retiree health care liabilities, there is a financial management system in place, and the City has pledged a revenue stream to deal with pensions.  Just as those successes are heralded by the coordinators, they also express "continuing concerns" on most of those big ticket items: dealing with escalating benefit costs, funding capital needs, and executing collective bargaining agreements in the future.  Unlike 2007, when the City petitioned to get out of Act 47, the recovery coordinators are now in favor of rescission. 

 

The team shows 132 initiatives that have come from the recovery plans and funnels them into one of four categories:

• Completed: Action has been achieved or achieved to date and may require a recurring action to remain complete. (85 or 64% of initiatives)
• In progress: Demonstrable progress made to achieve completion, but the action is not complete or it may require a long term effort. (38 or 29% of initiatives)
• Not applicable: Opportunity has passed or it is out of the City's control. (9 or 7% of initiatives)
• Incomplete: No demonstrable progress has been made. (0)

 

Obviously there is a lot of leeway in this typology, even realizing that if DCED would accept the status of each initiative as gospel only 64% of them are actually done to the point of completion (or how something that is "completed" would require "recurring action").  If DCED looks at the initiatives "completed" or "in progress" as "good" then the City has made positive strides on 93% of the work. 

 

But there are some head scratchers for sure. The Act 47 team considers the City's establishment of a debt policy "completed"; whether the City sticks to it is another matter altogether, hence the recurring or further action.  Same holds for the three decades long promise of money to the pension fund. Does anyone believe that "[pursuit] of City-County consolidation of departments" is "in progress"?  Or that the City is not "incomplete" on any of the initiatives? 

 

In order to have distressed status removed, a municipality has to have a positive operating fund balance for at least one year, have eliminated accrued deficits, retired obligations that were taken on to eliminate the deficit, and get the recommendation of the coordinator.  Pittsburgh has satisfied the first two, never had the third, and has the fourth.  It also has the situation where even if Act 47 goes away the oversight board stays in place.