Wednesday, April 16, 2008
Could County Be Bottling the Drink Tax Revenue?
The Allegheny County Controller weighed in on finances recently with the issuance of the 2007 Comprehensive Annual Financial Report, the official financial record of the County. He says reliance on one-time revenues to avoid deficits and stagnant revenues in the future paint a gloomy picture of what has been going on and what lies ahead. The County will get money as a host county for the gaming facility and from the tourism fund for various projects (see our issue summary for details) but, barring a Supreme Court ruling nullifying the base year assessment plan, it is unlikely that any increases to property values or property tax revenue will be coming.
That brings us to the drink and car rental taxes. Recall that the reason these taxes were enacted was to shift support of the Port Authority from County property taxes to new sources of revenue. The Executive’s Order from November of 2007 says that the County is “legally required” to send support to the Authority, but that same order vows to withhold the money until the transit union agrees to concessions. As we mentioned in an April 15 Brief, the Authority has mentioned an “end around” in the form of borrowing $27 million to trigger state subsidies.
If the state permits the Port Authority to borrow its own local matching funds, and the labor stalemate continues into next year, will the Authority be able to borrow another $27 million to keep the state dollars flowing? Assuming the state money is forthcoming and the Authority can continue to operate, why would the union make concessions but simply offer to work under the terms of the old contract?
So what happens as the drink/car rental tax revenue the County is collecting if it isn’t remitted to the Authority and the Port Authority unions are able to avoid having to make concessions demanded by the Chief Executive? Money we were told was critical for mass transit will be accumulating in a restricted fund while the contract negotiations drag on endlessly. Having this money pile up and the union off the hook for making concessions because of the end around borrowing by the Authority will not sit well with bar owners and restaurant owners already white hot angry over the new taxes.
That brings us to the drink and car rental taxes. Recall that the reason these taxes were enacted was to shift support of the Port Authority from County property taxes to new sources of revenue. The Executive’s Order from November of 2007 says that the County is “legally required” to send support to the Authority, but that same order vows to withhold the money until the transit union agrees to concessions. As we mentioned in an April 15 Brief, the Authority has mentioned an “end around” in the form of borrowing $27 million to trigger state subsidies.
If the state permits the Port Authority to borrow its own local matching funds, and the labor stalemate continues into next year, will the Authority be able to borrow another $27 million to keep the state dollars flowing? Assuming the state money is forthcoming and the Authority can continue to operate, why would the union make concessions but simply offer to work under the terms of the old contract?
So what happens as the drink/car rental tax revenue the County is collecting if it isn’t remitted to the Authority and the Port Authority unions are able to avoid having to make concessions demanded by the Chief Executive? Money we were told was critical for mass transit will be accumulating in a restricted fund while the contract negotiations drag on endlessly. Having this money pile up and the union off the hook for making concessions because of the end around borrowing by the Authority will not sit well with bar owners and restaurant owners already white hot angry over the new taxes.
