Tuesday, February 28, 2006
Port Authority requests record $191 million in transit funding
PAT on Taxpayers’ Backs Again
The Port Authority (PAT) is asking the Federal Transit Administration for $70 million in federal highway funds to be “flexed” to cover a projected shortfall in its 2005-06 operating budget. This is not the first time that the Port Authority’s budget deficit has been covered with money originally destined for much-needed road and bridge work. With area bridges and roads in bad need of repair, this is a terrible misuse of road funds.
Many bridges in the region are listed as “structurally deficient” and are waiting for funding to be repaired. One span fell onto Interstate 70. Yet the Port Authority is asking for more money to be diverted away from these projects. Since 2003 Governor Rendell has flexed more than $117 million from highway and bridge repair to the Port Authority to cover budget gaps.
But has PAT done anything to close the financing gaps on its own? Has it made any efforts to reduce spending? In short, PAT has done little or nothing. But it has spent money on capital projects such as the Overbrook T extension, parking garages and the Wabash Tunnel HOV project—all horrendously underutilized and adding to operating costs. Now, to top it off, PAT wants to waste another $400 million plus who knows how much in overruns on the North Shore Connector boondoggle.
PAT wages and benefits are among the very highest in the country. Meanwhile, ridership figures have been in long term decline for years—until recently when they were buoyed by high gasoline prices. But even that is a double edged-sword because fuel costs for the Port Authority have also increased.
PAT is threatening to raise fares and reduce services, which will cause riders to demand that lawmakers dedicate more money to this black hole. It is time for some accountability and rationality at the Port Authority. Service cuts should be implemented especially on the very low volume routes. Shift to more cost efficient, smaller vehicles on many routes with low ridership and off-peak hours. Fares should be raised to better reflect the true cost per passenger trip. The Port Authority could offer vouchers to subsidize very low-income riders.
Finally, the Port Authority should begin to cut its costs by privatizing certain functions or even bidding out its smaller routes to private companies. However, that will not happen because the Governor intervened in the contract negotiations and helped the union get a clause in the contract that precludes privatization efforts.
Welcome to Pennsylvania, home of outrageously expensive public services and no political will to do anything about them.
The Port Authority (PAT) is asking the Federal Transit Administration for $70 million in federal highway funds to be “flexed” to cover a projected shortfall in its 2005-06 operating budget. This is not the first time that the Port Authority’s budget deficit has been covered with money originally destined for much-needed road and bridge work. With area bridges and roads in bad need of repair, this is a terrible misuse of road funds.
Many bridges in the region are listed as “structurally deficient” and are waiting for funding to be repaired. One span fell onto Interstate 70. Yet the Port Authority is asking for more money to be diverted away from these projects. Since 2003 Governor Rendell has flexed more than $117 million from highway and bridge repair to the Port Authority to cover budget gaps.
But has PAT done anything to close the financing gaps on its own? Has it made any efforts to reduce spending? In short, PAT has done little or nothing. But it has spent money on capital projects such as the Overbrook T extension, parking garages and the Wabash Tunnel HOV project—all horrendously underutilized and adding to operating costs. Now, to top it off, PAT wants to waste another $400 million plus who knows how much in overruns on the North Shore Connector boondoggle.
PAT wages and benefits are among the very highest in the country. Meanwhile, ridership figures have been in long term decline for years—until recently when they were buoyed by high gasoline prices. But even that is a double edged-sword because fuel costs for the Port Authority have also increased.
PAT is threatening to raise fares and reduce services, which will cause riders to demand that lawmakers dedicate more money to this black hole. It is time for some accountability and rationality at the Port Authority. Service cuts should be implemented especially on the very low volume routes. Shift to more cost efficient, smaller vehicles on many routes with low ridership and off-peak hours. Fares should be raised to better reflect the true cost per passenger trip. The Port Authority could offer vouchers to subsidize very low-income riders.
Finally, the Port Authority should begin to cut its costs by privatizing certain functions or even bidding out its smaller routes to private companies. However, that will not happen because the Governor intervened in the contract negotiations and helped the union get a clause in the contract that precludes privatization efforts.
Welcome to Pennsylvania, home of outrageously expensive public services and no political will to do anything about them.
Friday, February 24, 2006
Vote Asking For End to Oversight Put on Hold
City Union Arrogance and Ignorance
Firefighters’ union chief, Joe King, says that Act 47 distressed status must be lifted so that collective bargaining can be done on a level playing field. He also contends that because the City had a $15 million surplus in 2005 its financial woes are over. Ergo, no reason for Act 47 oversight of Pittsburgh’s finances.
What incredible arrogance and ignorance have been folded into the union’s argument. First, owing to the unlevel playing field created by Act 111-- the law governing binding arbitration-- the firefighters in Pittsburgh were able to achieve some of the most lavish wages and benefits anywhere in the U.S. Outrageous amounts of overtime stemming from the previous giveaway contract were a major cause of the City’s plunge into virtual bankruptcy. Act 47 is used in part because it is the only effective check on the imbalance in bargaining power created by the binding arbitration law—a law the legislature cannot develop the spine to reform even minimally as almost every other state has done.
Second, the Secretary of the Department of Community and Economic Development will make the decision based on factors described in section 253 of Act 47. One of those factors is that obligations issued to fund municipal deficits have been retired. We know that hundreds of millions of dollars in debt issued to cover pension shortfalls is still outstanding. Thus, it is unlikely the Secretary will reach the conclusion that the City is in a secure financial position for some time to come.
The City has made some progress but it is a long way from being able to move out of distressed status. Indeed, since the only thing preventing the unions from wrecking the progress that has been made is the Act 47 coordinator, it is even more necessary to keep them on the job.
Of course, when you are the firefighters union in Pittsburgh you do not need to worry about facts, logic or rational argument. All you need is the political clout to do as you wish.
Firefighters’ union chief, Joe King, says that Act 47 distressed status must be lifted so that collective bargaining can be done on a level playing field. He also contends that because the City had a $15 million surplus in 2005 its financial woes are over. Ergo, no reason for Act 47 oversight of Pittsburgh’s finances.
What incredible arrogance and ignorance have been folded into the union’s argument. First, owing to the unlevel playing field created by Act 111-- the law governing binding arbitration-- the firefighters in Pittsburgh were able to achieve some of the most lavish wages and benefits anywhere in the U.S. Outrageous amounts of overtime stemming from the previous giveaway contract were a major cause of the City’s plunge into virtual bankruptcy. Act 47 is used in part because it is the only effective check on the imbalance in bargaining power created by the binding arbitration law—a law the legislature cannot develop the spine to reform even minimally as almost every other state has done.
Second, the Secretary of the Department of Community and Economic Development will make the decision based on factors described in section 253 of Act 47. One of those factors is that obligations issued to fund municipal deficits have been retired. We know that hundreds of millions of dollars in debt issued to cover pension shortfalls is still outstanding. Thus, it is unlikely the Secretary will reach the conclusion that the City is in a secure financial position for some time to come.
The City has made some progress but it is a long way from being able to move out of distressed status. Indeed, since the only thing preventing the unions from wrecking the progress that has been made is the Act 47 coordinator, it is even more necessary to keep them on the job.
Of course, when you are the firefighters union in Pittsburgh you do not need to worry about facts, logic or rational argument. All you need is the political clout to do as you wish.
Thursday, February 23, 2006
Condominium Developer Seeks Tax Break from Mt. Lebanon School District
The TIF Proposal That Will Not Go Away
There are a multitude of problems that come with a plan to develop glitzy condominiums along Washington Road in Mt. Lebanon. All stem from the fact that—surprise, surprise—the developer says he must have a TIF (tax increment financing) to proceed. An attorney for the developer recently appeared in front of the school board to make the case for a TIF.
The attorney was quoted as saying that one argument against the TIF would be that the free market should be allowed to work. In her view, since the property has sat vacant for over twenty years, the market has failed. “That’s what the free market has done” was the exact quote.
Balderdash. The Mt. Lebanon parking authority owns the key piece of property and has held it on behalf of the municipality for the “appropriate” development. The property has never been offered on the free market to other buyers who might have long ago developed it. Indeed, the property has been valued at $400,000. It might even be more if an open bidding process was permitted. But in any case, the market has not failed. It has been prevented from working by government officials who presume to know best.
Recall too, that a previous developer who insisted on tax increment financing had the property tied up for several years only to abandon the project once his private financing arrangements failed.
There are other issues with using a TIF. If the project is built with private dollars, there will be no diversion of taxes to service bond indebtedness. Using a TIF requires prevailing wages and inflates the building cost. And taxpayers will be subsidizing upscale living spaces, which in itself, is morally objectionable. Yet another problem, at least from what can be gleaned from the newspaper report, is that the development group doesn’t understand that the law requires a redevelopment or industrial authority to make the presentation to the taxing bodies and make the estimates of the tax revenue. One of those authorities steers the process, not the developer, developer attorneys, or a parking authority or a municipal official.
Officials should have done a better job of selecting the prospective developer and sought out someone who could have done it without subsidy. That would have made for a much better situation for all concerned—except of course the TIF seeking developer and their attorneys.
There are a multitude of problems that come with a plan to develop glitzy condominiums along Washington Road in Mt. Lebanon. All stem from the fact that—surprise, surprise—the developer says he must have a TIF (tax increment financing) to proceed. An attorney for the developer recently appeared in front of the school board to make the case for a TIF.
The attorney was quoted as saying that one argument against the TIF would be that the free market should be allowed to work. In her view, since the property has sat vacant for over twenty years, the market has failed. “That’s what the free market has done” was the exact quote.
Balderdash. The Mt. Lebanon parking authority owns the key piece of property and has held it on behalf of the municipality for the “appropriate” development. The property has never been offered on the free market to other buyers who might have long ago developed it. Indeed, the property has been valued at $400,000. It might even be more if an open bidding process was permitted. But in any case, the market has not failed. It has been prevented from working by government officials who presume to know best.
Recall too, that a previous developer who insisted on tax increment financing had the property tied up for several years only to abandon the project once his private financing arrangements failed.
There are other issues with using a TIF. If the project is built with private dollars, there will be no diversion of taxes to service bond indebtedness. Using a TIF requires prevailing wages and inflates the building cost. And taxpayers will be subsidizing upscale living spaces, which in itself, is morally objectionable. Yet another problem, at least from what can be gleaned from the newspaper report, is that the development group doesn’t understand that the law requires a redevelopment or industrial authority to make the presentation to the taxing bodies and make the estimates of the tax revenue. One of those authorities steers the process, not the developer, developer attorneys, or a parking authority or a municipal official.
Officials should have done a better job of selecting the prospective developer and sought out someone who could have done it without subsidy. That would have made for a much better situation for all concerned—except of course the TIF seeking developer and their attorneys.
Wednesday, February 22, 2006
“Governor Rendell Acts to Protect Fundamental Right to Vote, says Bill Places Unnecessary Burden on PA Voters”
What Are They Afraid Of?
In a move that surprised no one, the Governor vetoed House Bill 1318, which would have tightened identification requirements to prevent voter fraud. It is pretty straightforward: voters would have to produce any of the following to vote—a passport; a driver’s license; a student, government, or employee ID; a voter registration card; a firearm permit; a utility bill; a bank statement; or a paycheck or government check.
When a person turns 18 and is eligible to vote, it is reasonable to believe that if they cannot obtain a voter registration card and hold on to it in order to vote, then they should be prevented from voting.
But the Governor says that voter participation levels are too low that it should not be made harder to vote in Pennsylvania. Voting is not hard in Pennsylvania for people of conscience who obey the law. Moreover, there is no higher duty of elected officials than to protect those who voted legitimately from those who abuse the sacred right and privilege of citizen participation in the democratic process. Shame on those who coddle and condone those who would break the bonds of trust that are necessary to bind us together as a civilized society.
The Governor expressed in his news release that having to produce ID would “disenfranchise people living in nursing homes, a displaced family, or the state’s poorest [citizens]”, a theme echoed throughout the letters he received in support for the veto. Groups such as Common Cause, Pennsylvania AFL-CIO, AARP Pennsylvania, and the Philadelphia Federation of Teachers are just some of the groups that urged him to do so.
What are these groups afraid of? Consider this quote from the Teachers’ union letter referring to the possible disenfranchisement: “the loss of these votes alone could easily cost us the Pennsylvania U.S. Senate race in 2006 or the Presidential election in Pennsylvania (and possibly the nation) in 2008” (emphasis added). Are they really saying they can’t win elections in a fair and open process?
Anyone looking for how corrupt electoral politics has become in Pennsylvania need look no further than this latest veto.
In a move that surprised no one, the Governor vetoed House Bill 1318, which would have tightened identification requirements to prevent voter fraud. It is pretty straightforward: voters would have to produce any of the following to vote—a passport; a driver’s license; a student, government, or employee ID; a voter registration card; a firearm permit; a utility bill; a bank statement; or a paycheck or government check.
When a person turns 18 and is eligible to vote, it is reasonable to believe that if they cannot obtain a voter registration card and hold on to it in order to vote, then they should be prevented from voting.
But the Governor says that voter participation levels are too low that it should not be made harder to vote in Pennsylvania. Voting is not hard in Pennsylvania for people of conscience who obey the law. Moreover, there is no higher duty of elected officials than to protect those who voted legitimately from those who abuse the sacred right and privilege of citizen participation in the democratic process. Shame on those who coddle and condone those who would break the bonds of trust that are necessary to bind us together as a civilized society.
The Governor expressed in his news release that having to produce ID would “disenfranchise people living in nursing homes, a displaced family, or the state’s poorest [citizens]”, a theme echoed throughout the letters he received in support for the veto. Groups such as Common Cause, Pennsylvania AFL-CIO, AARP Pennsylvania, and the Philadelphia Federation of Teachers are just some of the groups that urged him to do so.
What are these groups afraid of? Consider this quote from the Teachers’ union letter referring to the possible disenfranchisement: “the loss of these votes alone could easily cost us the Pennsylvania U.S. Senate race in 2006 or the Presidential election in Pennsylvania (and possibly the nation) in 2008” (emphasis added). Are they really saying they can’t win elections in a fair and open process?
Anyone looking for how corrupt electoral politics has become in Pennsylvania need look no further than this latest veto.
Thursday, February 16, 2006
Faith Leaders ask Spector for Immigration Law Fixes
Misguided Members of the Cloth
Leaders of the Pittsburgh Interfaith Impact Network are campaigning to have Senator Specter gut the language of the immigration law passed by the House of Representatives. This is a bill that puts some teeth in the effort to stem the flood of illegal migrants entering the U.S. How easy it is for people in Pittsburgh, which is little affected by the torrent of illegals that are invading other parts the country, to get on their moralistic high horses about the need to be compassionate to people who are in this country illegally.
They should travel out to Arizona where the influx is playing havoc with the state finances and hospitals have been forced to close because of the services they must provide with no offsetting revenue increases. They should contemplate with their brains and not just their hearts what is going to happen if this tide is not stemmed and stemmed quickly. Any program that imposes no sanctions will only encourage the flood to continue and possibly worsen.
Perhaps they should go down to Mexico and try to improve the lot of all Mexicans and not just those who are willing and able to violate U.S. laws to get here. Perhaps they should contemplate the fact that all the illegals working in the U.S. are depressing wages across a wide range of occupations, making it harder for many Americans to earn a decent living. Where’s the compassion in that?
Leaders of the Pittsburgh Interfaith Impact Network are campaigning to have Senator Specter gut the language of the immigration law passed by the House of Representatives. This is a bill that puts some teeth in the effort to stem the flood of illegal migrants entering the U.S. How easy it is for people in Pittsburgh, which is little affected by the torrent of illegals that are invading other parts the country, to get on their moralistic high horses about the need to be compassionate to people who are in this country illegally.
They should travel out to Arizona where the influx is playing havoc with the state finances and hospitals have been forced to close because of the services they must provide with no offsetting revenue increases. They should contemplate with their brains and not just their hearts what is going to happen if this tide is not stemmed and stemmed quickly. Any program that imposes no sanctions will only encourage the flood to continue and possibly worsen.
Perhaps they should go down to Mexico and try to improve the lot of all Mexicans and not just those who are willing and able to violate U.S. laws to get here. Perhaps they should contemplate the fact that all the illegals working in the U.S. are depressing wages across a wide range of occupations, making it harder for many Americans to earn a decent living. Where’s the compassion in that?
Wednesday, February 15, 2006
Council to Review Appointees
[Dis]appointing Authority Protocol
“To the victor go the spoils”. That describes the ability of an election winner to hand out jobs and appointments as a way to reward campaign supporters. It happens at all levels of government, and it just so happens that the new Mayor of Pittsburgh is about to have his say on the authorities that help the City carry out its functions.
We have argued before that these authorities—particularly the Stadium, Redevelopment, Parking, and Water and Sewer—need to help the City with its recovery by divesting themselves of assets that could be put to use by the private sector. Through an auction, potentially valuable pieces of property could be sold and returned to the tax rolls.
We have also argued that the Mayor needed to make appointments that would shy away from the “business as usual” approach that got the City into the current state. Many of the appointments are merely shuffling people from one board to another and keeping a representative of City Council in a slot. While this no doubt helps to improve coordination and communication, it is more of the same approach.
Most distressing on the face of it is that the Mayor has made an appointment to the Stadium Authority, which has not had a stadium to manage since the demolition of Three Rivers. Ownership of the two new stadiums is handled by the City-County Sports and Exhibition Authority, while the City Stadium Authority essentially acts as the final arbiter of development between the two structures. Proceeds from parking and land sales are continuously re-circulated into a development fund, thus ensuring continual subsidy to the North Shore.
The Stadium Authority is essentially a shell organization that was kept in place for the previous Mayor to use to control development. The authority has no staff, and, prior to the new Mayor’s appointment, had the same chairman as the SEA. Simply put, the Stadium Authority’s remaining functions ought to be transferred to the SEA and the Stadium Authority needs to be dissolved. Hopefully, the first new appointment will set those wheels in motion.
“To the victor go the spoils”. That describes the ability of an election winner to hand out jobs and appointments as a way to reward campaign supporters. It happens at all levels of government, and it just so happens that the new Mayor of Pittsburgh is about to have his say on the authorities that help the City carry out its functions.
We have argued before that these authorities—particularly the Stadium, Redevelopment, Parking, and Water and Sewer—need to help the City with its recovery by divesting themselves of assets that could be put to use by the private sector. Through an auction, potentially valuable pieces of property could be sold and returned to the tax rolls.
We have also argued that the Mayor needed to make appointments that would shy away from the “business as usual” approach that got the City into the current state. Many of the appointments are merely shuffling people from one board to another and keeping a representative of City Council in a slot. While this no doubt helps to improve coordination and communication, it is more of the same approach.
Most distressing on the face of it is that the Mayor has made an appointment to the Stadium Authority, which has not had a stadium to manage since the demolition of Three Rivers. Ownership of the two new stadiums is handled by the City-County Sports and Exhibition Authority, while the City Stadium Authority essentially acts as the final arbiter of development between the two structures. Proceeds from parking and land sales are continuously re-circulated into a development fund, thus ensuring continual subsidy to the North Shore.
The Stadium Authority is essentially a shell organization that was kept in place for the previous Mayor to use to control development. The authority has no staff, and, prior to the new Mayor’s appointment, had the same chairman as the SEA. Simply put, the Stadium Authority’s remaining functions ought to be transferred to the SEA and the Stadium Authority needs to be dissolved. Hopefully, the first new appointment will set those wheels in motion.
Friday, February 10, 2006
URA Advances Projects for Downtown, Hill District
PNC Likely a Slam Dunk
You’d think that a City in a state of financial distress and under the direction of a state oversight board would be sufficient to give some hesitancy to approving a project like Three PNC Plaza. You’d also think that the office and hotel vacancy rates in Downtown would be enough to stop it. You’d also think that the County’s talk about not supporting projects that move jobs from one location to another within the County would be enough to stop it. In fact, you’d think that the Pittsburgh Public School District’s situation—facing financial problems and the reality of finally closing schools to right size the district’s facilities—would be enough to stop it.
But none of these factors have come into play to stop the Three PNC Plaza project from moving ahead. The Urban Redevelopment Authority is ready to commence with a tax increment finance package of $18 million to help build the structure. If the City, County, and School District approve the plan, they will get a combined $1.1 million in real estate taxes while deferring $1.7 million to retire debt associated with the TIF. If the project were to be built privately, they would have gotten all of the tax money following completion. They wouldn’t be forced to use prevailing wage, which has inflated the cost of the project.
But remember that the state has promised to kick in $30 million as well. On Tuesday, City Council took action to allow the URA to apply for $16 million in Redevelopment Assistance Capital Funding (RACP) for the development. It is not clear where the balance will come from, but as our recent report (#06-01) noted, there is a long menu from which to choose. To be sure, PNC is no stranger to the RACP. After all, it was the funding source the state used to build PNC Park.
Much like the North Shore Connector, a project that defies all common sense, this PNC building is proceeding against every notion of good public policy.
You’d think that a City in a state of financial distress and under the direction of a state oversight board would be sufficient to give some hesitancy to approving a project like Three PNC Plaza. You’d also think that the office and hotel vacancy rates in Downtown would be enough to stop it. You’d also think that the County’s talk about not supporting projects that move jobs from one location to another within the County would be enough to stop it. In fact, you’d think that the Pittsburgh Public School District’s situation—facing financial problems and the reality of finally closing schools to right size the district’s facilities—would be enough to stop it.
But none of these factors have come into play to stop the Three PNC Plaza project from moving ahead. The Urban Redevelopment Authority is ready to commence with a tax increment finance package of $18 million to help build the structure. If the City, County, and School District approve the plan, they will get a combined $1.1 million in real estate taxes while deferring $1.7 million to retire debt associated with the TIF. If the project were to be built privately, they would have gotten all of the tax money following completion. They wouldn’t be forced to use prevailing wage, which has inflated the cost of the project.
But remember that the state has promised to kick in $30 million as well. On Tuesday, City Council took action to allow the URA to apply for $16 million in Redevelopment Assistance Capital Funding (RACP) for the development. It is not clear where the balance will come from, but as our recent report (#06-01) noted, there is a long menu from which to choose. To be sure, PNC is no stranger to the RACP. After all, it was the funding source the state used to build PNC Park.
Much like the North Shore Connector, a project that defies all common sense, this PNC building is proceeding against every notion of good public policy.
Thursday, February 09, 2006
Governor’s Budget: Spend and Spin, Spin and Spend
The Governor just released his proposed fiscal 2006-2007 budget proclaiming expenditure cuts in many departments while holding the line on taxes. However, on close inspection, this allegedly beautiful budget turns out to have warts. Spending is increased by nearly $1 billion over the current level and doesn’t include the significant tax cuts taxpayers deserve.
Two line items in particular jump out. First is the increase in debt service expenses of nearly 20 percent or $140 million over last year’s level. This is a clear indication that the heavy borrowing to “stimulate” economic growth comes at a large cost. Certainly, it is extremely unlikely that the subsidized development projects will ever generate $140 million a year in new tax revenue for the state. Instead of cutting taxes and improving Pennsylvania’s overall business climate, the Governor has pursued a strategy of handing out checks to select “economic winners”.
In another budget busting outrage, the Governor has proposed a 6.4 percent increase in basic education spending, a rise of $517 million above the current level. An increase large enough to cover inflation would be just $240 million. The state continues to pour more and more money into public education, yet our students show little significant progress. PSSA scores have been flat with less than 50 percent of the state’s 11th graders proficient in math and only 60 percent proficient in reading.
These two items alone represent $400 million in unnecessary and unjustified expenditures. That $400 million would have made a really nice down payment on a meaningful tax cut for Pennsylvanians.
The proposed budget does not bode well for Pennsylvanians. Spending should have been cut across the board and taxes lowered. Instead this budget is long on spending and platitudes and short on restoring money to Commonwealth taxpayers.
The Governor just released his proposed fiscal 2006-2007 budget proclaiming expenditure cuts in many departments while holding the line on taxes. However, on close inspection, this allegedly beautiful budget turns out to have warts. Spending is increased by nearly $1 billion over the current level and doesn’t include the significant tax cuts taxpayers deserve.
Two line items in particular jump out. First is the increase in debt service expenses of nearly 20 percent or $140 million over last year’s level. This is a clear indication that the heavy borrowing to “stimulate” economic growth comes at a large cost. Certainly, it is extremely unlikely that the subsidized development projects will ever generate $140 million a year in new tax revenue for the state. Instead of cutting taxes and improving Pennsylvania’s overall business climate, the Governor has pursued a strategy of handing out checks to select “economic winners”.
In another budget busting outrage, the Governor has proposed a 6.4 percent increase in basic education spending, a rise of $517 million above the current level. An increase large enough to cover inflation would be just $240 million. The state continues to pour more and more money into public education, yet our students show little significant progress. PSSA scores have been flat with less than 50 percent of the state’s 11th graders proficient in math and only 60 percent proficient in reading.
These two items alone represent $400 million in unnecessary and unjustified expenditures. That $400 million would have made a really nice down payment on a meaningful tax cut for Pennsylvanians.
The proposed budget does not bode well for Pennsylvanians. Spending should have been cut across the board and taxes lowered. Instead this budget is long on spending and platitudes and short on restoring money to Commonwealth taxpayers.
Wednesday, February 08, 2006
Don’t Bother Them with Facts
Pittsburgh’s new school superintendent has fired off an indignant letter to the Pennsylvania Labor Relations Board complaining about the recent “fact-finder’s” report on the district’s conflict with the teachers’ unions. In the letter Superintendent Roosevelt points out the failures of the state appointed fact-finder to include important estimates of how much his recommendations would cost the district and failed to take into account the parlous state of the district’s finances. This is a school district that is being forced to close schools because of declining enrollments and outrageous per student spending.
Despite the condition of school finances, the fact-finder concluded that pay raises for teachers are affordable. Perhaps he believes that more money from the state or higher millage rates will do the trick. In any case, he failed to produce a salary schedule with proposed raises as required by his appointment letter. Nonetheless, the spokesperson for the Labor Relations Board backed the fact-finder and his report.
What all of this says again in starkest terms is that Pennsylvania’s public sector bargaining has become completely one-sided in terms of the taxpayers and unions. The unions have every conceivable state granted and enforced advantage.
Even as the extraordinary cost per student, the resultant high local taxes and heavy state funding and inexcusably poor academic achievement of Pittsburgh schools can be traced in large measure to the unions representing employees of the district, as far as the government of Pennsylvania is concerned, so what?
Any doubt as to where the current administration’s allegiance lies with respect to taxpayers and teachers was removed by the announcement that the Governor will recommend another 5 percent increase in state school spending for the next fiscal year. With no appreciable change in the number of students and just three percent inflation, there is no justification for the spending increase unless the money is mandated to be used to roll back property taxes. But, it isn’t.
The claim is that the money is coming from savings the administration has been able to achieve. Yet, when the legislators passed a bill asking for a small business tax cut, the Governor said there was no way to fund it. When it comes time to take care of powerful supporters there is plenty of money, but for businesses the message is clear, “go pound salt.”
Pittsburgh’s new school superintendent has fired off an indignant letter to the Pennsylvania Labor Relations Board complaining about the recent “fact-finder’s” report on the district’s conflict with the teachers’ unions. In the letter Superintendent Roosevelt points out the failures of the state appointed fact-finder to include important estimates of how much his recommendations would cost the district and failed to take into account the parlous state of the district’s finances. This is a school district that is being forced to close schools because of declining enrollments and outrageous per student spending.
Despite the condition of school finances, the fact-finder concluded that pay raises for teachers are affordable. Perhaps he believes that more money from the state or higher millage rates will do the trick. In any case, he failed to produce a salary schedule with proposed raises as required by his appointment letter. Nonetheless, the spokesperson for the Labor Relations Board backed the fact-finder and his report.
What all of this says again in starkest terms is that Pennsylvania’s public sector bargaining has become completely one-sided in terms of the taxpayers and unions. The unions have every conceivable state granted and enforced advantage.
Even as the extraordinary cost per student, the resultant high local taxes and heavy state funding and inexcusably poor academic achievement of Pittsburgh schools can be traced in large measure to the unions representing employees of the district, as far as the government of Pennsylvania is concerned, so what?
Any doubt as to where the current administration’s allegiance lies with respect to taxpayers and teachers was removed by the announcement that the Governor will recommend another 5 percent increase in state school spending for the next fiscal year. With no appreciable change in the number of students and just three percent inflation, there is no justification for the spending increase unless the money is mandated to be used to roll back property taxes. But, it isn’t.
The claim is that the money is coming from savings the administration has been able to achieve. Yet, when the legislators passed a bill asking for a small business tax cut, the Governor said there was no way to fund it. When it comes time to take care of powerful supporters there is plenty of money, but for businesses the message is clear, “go pound salt.”
Monday, February 06, 2006
Tax Reform? Voters Should Look in the Mirror
There are very few taxpayers, especially property tax payers in Allegheny County, who are not desirous of seeing their tax bills reduced. Indeed, since the pay raise flap of last year, property tax reform has become the focus of legislative and gubernatorial rhetoric. A special session of the legislature was called to grapple with the problem. But, as in every previous attempt to reduce property taxes, the reality of having to find replacement dollars through raising other taxes brings discussion of meaningful reduction to a grinding halt.
Therein lies the key to understanding the real problem. Total taxes are high because spending is high. Spending is high because elected officials, including school board members, are motivated for many reasons, mostly political, to keep expanding outlays. Their constituents want more government provided goodies and they feel compelled to oblige.
Voters in high tax areas keep electing big spenders-- as well as representatives who promote policies which lead to higher expenditures-- to office and then complain when their taxes go up. Presumably, such voters are hoping the bill can be shifted to businesses or other taxpayers around the country or state. But for local government and schools that is very hard to do.
All one need do to verify this thesis is to have state and local candidates in Allegheny County run on a platform that calls for the elimination of prevailing wage laws, elimination of teacher strikes, elimination of PAT worker strikes, reform of binding arbitration laws relating to public safety employees and privatization of state or local government services. There might be two or three districts in the County where such candidates could get elected. And that is the problem here and in much of the state.
Simply put, people looking for a way to reduce their tax bite should support candidates who will work to change the laws that create an upward spiral of government spending. If on the other hand voters believe the primary role of government is to provide discharge proof jobs with high wages and generous benefits-- such as PAT drivers and public school teachers-- then they need to stop complaining about taxes and quit dreaming their taxes will ever be lowered.
There are very few taxpayers, especially property tax payers in Allegheny County, who are not desirous of seeing their tax bills reduced. Indeed, since the pay raise flap of last year, property tax reform has become the focus of legislative and gubernatorial rhetoric. A special session of the legislature was called to grapple with the problem. But, as in every previous attempt to reduce property taxes, the reality of having to find replacement dollars through raising other taxes brings discussion of meaningful reduction to a grinding halt.
Therein lies the key to understanding the real problem. Total taxes are high because spending is high. Spending is high because elected officials, including school board members, are motivated for many reasons, mostly political, to keep expanding outlays. Their constituents want more government provided goodies and they feel compelled to oblige.
Voters in high tax areas keep electing big spenders-- as well as representatives who promote policies which lead to higher expenditures-- to office and then complain when their taxes go up. Presumably, such voters are hoping the bill can be shifted to businesses or other taxpayers around the country or state. But for local government and schools that is very hard to do.
All one need do to verify this thesis is to have state and local candidates in Allegheny County run on a platform that calls for the elimination of prevailing wage laws, elimination of teacher strikes, elimination of PAT worker strikes, reform of binding arbitration laws relating to public safety employees and privatization of state or local government services. There might be two or three districts in the County where such candidates could get elected. And that is the problem here and in much of the state.
Simply put, people looking for a way to reduce their tax bite should support candidates who will work to change the laws that create an upward spiral of government spending. If on the other hand voters believe the primary role of government is to provide discharge proof jobs with high wages and generous benefits-- such as PAT drivers and public school teachers-- then they need to stop complaining about taxes and quit dreaming their taxes will ever be lowered.
