Monday, June 05, 2006
Failed Leadership Training in Pittsburgh
Leadership Pittsburgh’s recent graduating class had an assignment: come up with an idea that would move Pittsburgh forward. F’s for the entire group. They trotted out the tired old idea of merging the City of Pittsburgh into Allegheny County. Regional boosters love the idea and tout improved economic development, better image, and improved efficiencies as reasons to love the notion. Just get rid of all these municipalities and watch Pittsburgh/Allegheny County take off. Perhaps they should first explain why the single City/County government in Philadelphia costs so much and has a terrible problem with its population and jobs leaving.
But they have missed the point entirely, as these civic minded, well-intentioned groups almost always do. The reason for the City’s and County’s dismal growth, and for that matter the region’s as a whole, is not fragmented government. The problems can be found in the pervasive unionism that determines the business climate as well as a regulatory climate that treats businesses as villains and unions as heroes. Merging City and County governments will not spur economic growth, although it may improve the ease with which corporate wealth fare is handed out.
True economic growth and improved job opportunities will be achieved only after union friendly regulations such as prevailing wage and Act 111 are eliminated. Furthermore, fostering a better business climate can be helped along by cutting tax rates, such as the state’s capital stock and franchise tax and the City’s parking tax. Why didn’t the Leadership class focus on these job and business growth killers?
As far as improving efficiencies in providing government services are concerned, there is no evidence that full scale mergers improve efficiencies. Two years after the merger of Louisville and Jefferson County, KY, —the example often held up as the model—government expenditures were virtually unchanged. The major reason of course is the unions involved. With two different unions, with differing pay scales and work rules, reconciling differences will be costly as the unions will favor the pay and work rules that benefit them the most.
Improved government efficiencies can be brought about through privatization or outsourcing of services. Study after study has been done recommending the City privatize its refuse collection to save money. This notion has been resisted at every turn by unions and their supporters on City Council. Even when tried, as with fleet maintenance, private providers are hindered from implementing changes that would lower costs substantially. Again, the graduates from Leadership Pittsburgh failed to mention this option as a way to lower government costs.
Moreover, virtually every Allegheny County municipality has a per capita cost of providing government services below Pittsburgh’s and they are not weighed down by huge debt burdens, enormous unfunded pension liabilities and unfunded retiree health care benefits. Nor do they spend a million dollars a month on Fire Bureau overtime or $8,000 per employee for Workers Compensation. Both of these figures prompt financial officials in other cities to shake their heads in disbelief because they are so far out of line with normal and prudent outlays. Maybe the Leadership class ought to examine some of the more egregious City spending habits before recommending that other taxpayers be saddled with them.
Perhaps some broader based research to see how other areas have fared and why so many of these mergers get turned down would be of some help as well. Taking advice from PUMP is of no use. They have rarely been right about anything.
Instead of coming up with innovative ways to improve the City and help pull it out of financial distress, the graduates from Leadership Pittsburgh are carrying water for the Allegheny Conference, which continues to confuse activity with progress. They see merging the City with the County as a way of spreading the City’s financial problems over a larger population. As the president of the Fraternal Order of Police responded, having the City ask you to merge would be like “your poor, drunk uncle was going to come and live with you.” County residents are wise enough to avoid that disaster.
But they have missed the point entirely, as these civic minded, well-intentioned groups almost always do. The reason for the City’s and County’s dismal growth, and for that matter the region’s as a whole, is not fragmented government. The problems can be found in the pervasive unionism that determines the business climate as well as a regulatory climate that treats businesses as villains and unions as heroes. Merging City and County governments will not spur economic growth, although it may improve the ease with which corporate wealth fare is handed out.
True economic growth and improved job opportunities will be achieved only after union friendly regulations such as prevailing wage and Act 111 are eliminated. Furthermore, fostering a better business climate can be helped along by cutting tax rates, such as the state’s capital stock and franchise tax and the City’s parking tax. Why didn’t the Leadership class focus on these job and business growth killers?
As far as improving efficiencies in providing government services are concerned, there is no evidence that full scale mergers improve efficiencies. Two years after the merger of Louisville and Jefferson County, KY, —the example often held up as the model—government expenditures were virtually unchanged. The major reason of course is the unions involved. With two different unions, with differing pay scales and work rules, reconciling differences will be costly as the unions will favor the pay and work rules that benefit them the most.
Improved government efficiencies can be brought about through privatization or outsourcing of services. Study after study has been done recommending the City privatize its refuse collection to save money. This notion has been resisted at every turn by unions and their supporters on City Council. Even when tried, as with fleet maintenance, private providers are hindered from implementing changes that would lower costs substantially. Again, the graduates from Leadership Pittsburgh failed to mention this option as a way to lower government costs.
Moreover, virtually every Allegheny County municipality has a per capita cost of providing government services below Pittsburgh’s and they are not weighed down by huge debt burdens, enormous unfunded pension liabilities and unfunded retiree health care benefits. Nor do they spend a million dollars a month on Fire Bureau overtime or $8,000 per employee for Workers Compensation. Both of these figures prompt financial officials in other cities to shake their heads in disbelief because they are so far out of line with normal and prudent outlays. Maybe the Leadership class ought to examine some of the more egregious City spending habits before recommending that other taxpayers be saddled with them.
Perhaps some broader based research to see how other areas have fared and why so many of these mergers get turned down would be of some help as well. Taking advice from PUMP is of no use. They have rarely been right about anything.
Instead of coming up with innovative ways to improve the City and help pull it out of financial distress, the graduates from Leadership Pittsburgh are carrying water for the Allegheny Conference, which continues to confuse activity with progress. They see merging the City with the County as a way of spreading the City’s financial problems over a larger population. As the president of the Fraternal Order of Police responded, having the City ask you to merge would be like “your poor, drunk uncle was going to come and live with you.” County residents are wise enough to avoid that disaster.
