Monday, August 14, 2006
Municipalities Looking For Help in the Wrong Places
A newspaper article dealing with communities in an early-intervention program and close to entering financial distressed status under Act 47 shows that the old canards dragged out by leaders in Pittsburgh when the City was declared distressed have surfaced in other parts of the state as well. For example, the City manager of Meadville notes that 40 percent of the property within Meadville’s borders is exempt from taxation and that there are not enough taxes for local governments to levy. Sound familiar?
Perhaps he forgot that Pittsburgh was levying eight different taxes at the time it was declared distressed and that, when the 2004 tax reform package for the City winds up at the end of the decade, it will still be levying seven. Is the ability to have numerous sources of taxes the means to avoid financial difficulties? Certainly not in Pittsburgh’s case. Ironically, Meadville was the beneficiary of Pittsburgh’s financial problems in that the legislature allowed municipalities to levy a $52 EMS tax instead of the $10 occupation privilege tax.
Perhaps they would like a system like Philadelphia, whose unique wage tax burden falls on all workers, regardless of residence, and has driven jobs and investment from the City for the last six decades. Philly is not in Act 47, but is under a state oversight board and has been since the early 1990s.
And though a good deal of Meadville’s property is tax-exempt, a good guess would be that a lot of it is held by Allegheny College, which is boosting the City’s tax take through wages on working students and for real estate taxes on employees living in the City. Would Meadville take a substantial one-time monetary package in exchange for Allegheny College relocating? Seems highly doubtful.
A local pundit also got it wrong that cuts to police or garbage will automatically bring disastrous results. Note that neither he nor the official from Meadville quoted in the article mentioned the need for changes to Act 111 to enable municipalities to control costs better. Neither did they mention the savings Pittsburgh could have realized by privatizing garbage collection.
Perhaps the state will move to a system of voluntary dis-incorporation or forced consolidations. But like the property tax reforms the state has been endlessly waiting for, those changes are likely a long way off. Until then, the emphasis ought to be on obtaining cost-effective services, a hard-nosed approach to public sector unions, and strict debt policy.
Perhaps he forgot that Pittsburgh was levying eight different taxes at the time it was declared distressed and that, when the 2004 tax reform package for the City winds up at the end of the decade, it will still be levying seven. Is the ability to have numerous sources of taxes the means to avoid financial difficulties? Certainly not in Pittsburgh’s case. Ironically, Meadville was the beneficiary of Pittsburgh’s financial problems in that the legislature allowed municipalities to levy a $52 EMS tax instead of the $10 occupation privilege tax.
Perhaps they would like a system like Philadelphia, whose unique wage tax burden falls on all workers, regardless of residence, and has driven jobs and investment from the City for the last six decades. Philly is not in Act 47, but is under a state oversight board and has been since the early 1990s.
And though a good deal of Meadville’s property is tax-exempt, a good guess would be that a lot of it is held by Allegheny College, which is boosting the City’s tax take through wages on working students and for real estate taxes on employees living in the City. Would Meadville take a substantial one-time monetary package in exchange for Allegheny College relocating? Seems highly doubtful.
A local pundit also got it wrong that cuts to police or garbage will automatically bring disastrous results. Note that neither he nor the official from Meadville quoted in the article mentioned the need for changes to Act 111 to enable municipalities to control costs better. Neither did they mention the savings Pittsburgh could have realized by privatizing garbage collection.
Perhaps the state will move to a system of voluntary dis-incorporation or forced consolidations. But like the property tax reforms the state has been endlessly waiting for, those changes are likely a long way off. Until then, the emphasis ought to be on obtaining cost-effective services, a hard-nosed approach to public sector unions, and strict debt policy.
