Wednesday, October 03, 2007
Council’s Tax Freeze Likely to Get a Chilly Reception
The City Council took a preliminary vote today on freezing the parking tax rate at 45 percent and eschewing the state’s tax rollback under the 2004 reform package. In so doing, Council wants to take the money it would have lost from the rollback over the next three years and use it for non-operational purposes of pensions and debt.
Whether this holds (the vote was 8-0 with one abstention) is debatable, but Council’s stand of solidarity is likely to backfire.
Consider what could happen: the state could nix the shift of 1/10 of a percent of the wage tax that was supposed to come from the school district, a move that will result in millions of additional dollars for the City without an increase in the total rate.
Or it could trigger the ICA to withhold gaming money when it materializes, or the non-profit community could void its contribution through the Pittsburgh Public Service Fund.
In other words, there is no upside for the City in this standoff. Even if they did succeed, the contribution of money from the parking tax freeze will make a minimal dent in the pension and debt funds at which proponents have targeted the funds.
Whether this holds (the vote was 8-0 with one abstention) is debatable, but Council’s stand of solidarity is likely to backfire.
Consider what could happen: the state could nix the shift of 1/10 of a percent of the wage tax that was supposed to come from the school district, a move that will result in millions of additional dollars for the City without an increase in the total rate.
Or it could trigger the ICA to withhold gaming money when it materializes, or the non-profit community could void its contribution through the Pittsburgh Public Service Fund.
In other words, there is no upside for the City in this standoff. Even if they did succeed, the contribution of money from the parking tax freeze will make a minimal dent in the pension and debt funds at which proponents have targeted the funds.
