Friday, November 02, 2007
A Silly Plan to Raise Taxes
The proposed drink and car rental taxes received another public hearing last evening, which once again provided an opportunity to see how utterly nonsensical the plan is.
What we have repeatedly heard is that if the County Council approves the optional taxes the money will be withheld until the Port Authority makes the necessary changes to its structure that will then justify releasing the money to them. This line of reasoning was convincing enough to pick up the support of the Allegheny Conference and the Greater Pittsburgh Chamber of Commerce, who endorsed the plan at the hearing.
Under Act 44, the County needs to come up with $28 million as a match for state funding. Up until now, the County has written a $25 million check to the Port Authority from property tax revenues. The Executive says the County can no longer continue that course, so instead of finding an additional $3 million in savings from existing programs, the Executive and supporters on Council have attempted to sell the new taxes as dedicated funding for transit.
Instead, the new taxes will allow for County to stop sending property taxes to PAT and instead use those dollars to plug a hole in the County budget. It is a tax grab scheme perpetuated by the Executive’s ill-advised base year reassessment plan.
And what is the outcome if the new taxes are approved and held essentially in trust? There is no benefit to the County or the taxpayers, that’s for certain. If the taxes are enacted and then withheld, there is a good chance that the matching state subsidy is held back and the system shuts down. Think the County Executive is going to go down this road? Not likely. And what about the transit union? They’ve seen threats come their way before only to have an elected official come through for them. So what incentive do they have to give concessions if the tax money is sitting there waiting to be released only if they decide to play nice? No much at all.
The silliness of this plan is once again laid bare.
What we have repeatedly heard is that if the County Council approves the optional taxes the money will be withheld until the Port Authority makes the necessary changes to its structure that will then justify releasing the money to them. This line of reasoning was convincing enough to pick up the support of the Allegheny Conference and the Greater Pittsburgh Chamber of Commerce, who endorsed the plan at the hearing.
Under Act 44, the County needs to come up with $28 million as a match for state funding. Up until now, the County has written a $25 million check to the Port Authority from property tax revenues. The Executive says the County can no longer continue that course, so instead of finding an additional $3 million in savings from existing programs, the Executive and supporters on Council have attempted to sell the new taxes as dedicated funding for transit.
Instead, the new taxes will allow for County to stop sending property taxes to PAT and instead use those dollars to plug a hole in the County budget. It is a tax grab scheme perpetuated by the Executive’s ill-advised base year reassessment plan.
And what is the outcome if the new taxes are approved and held essentially in trust? There is no benefit to the County or the taxpayers, that’s for certain. If the taxes are enacted and then withheld, there is a good chance that the matching state subsidy is held back and the system shuts down. Think the County Executive is going to go down this road? Not likely. And what about the transit union? They’ve seen threats come their way before only to have an elected official come through for them. So what incentive do they have to give concessions if the tax money is sitting there waiting to be released only if they decide to play nice? No much at all.
The silliness of this plan is once again laid bare.
