Six Packs at Gas Stations: Where Does that Place PA Now?

Almost seven years ago, in October of 2009, we wrote that a PA Liquor Control Board decision to allow grocery store sales of beer–with stipulations–allowed the state to enter the 20th century in regard to malt beverage sales.

Today, the Liquor Board approved applications by gas stations to sell six packs at their locations.  This has come about in the shadow of a Supreme Court case over the matter.

Education Finance Potpourri

A couple of education finance notes to cover in the news media today:

The outgoing director of an advocacy group focused on Pittsburgh Public Schools conducted an exit interview with a newspaper and was asked if there were any unaddressed issues and remarked that “one is around budgeting. This is sort of a high-spending district”.  Sort of?  In 2013-14 Pittsburgh spent $11,596 on instruction per-pupil–that was 29th highest in the state (out of 500 districts).  Measure total expenditures per-pupil and Pittsburgh ranks 16th of 500 at $21,753.  In 2003-04, Pittsburgh spent $8,497 per-pupil on instruction, which ranked it 23rd of 501 districts.  Total expenditures per-pupil were $14,907, which ranked it 18th.

Monday’s blog covered the Wilkinsburg School budget, the final one before its middle and high school students transfer to Pittsburgh Public in the fall.  The business manager for the District stated that it will “cost $9,600 for each student to go to Westinghouse”.  That runs counter to what was characterized in the agreement that first year tuition would be $8,000 and would rise to $9,600 in the second year (Wilkinsburg was spending $13,775 on instruction per-pupil, so maybe that was the basis for the comparison made by the advocacy group director) the article also mentions the soon to be approved transition money from the state, and since some of that money was already spent it must be recurring.  Another article quoted an official helping with the transition that PPS “…will hire some Wilkinsburg teachers and staff but the process is still underway”.

Lastly, Mt. Lebanon School District boosted its millage rate by 0.38 to 23.93 (since the 2013 reassessment and the adjustment of millage to 22.61, the district has boosted millage each year.  The District’s spokesperson stated that the millage hike is due to an increase in the pension contribution rate.  There is some talk of a pension reform bill for PSERS and SERS in the upcoming budget discussions.

Wilkinsburg Preps Budget for Life After PPS Partnership

Very soon, Wilkinsburg School District will become the second school district in Allegheny County (along with Duquesne) that will not offer a full K-12 education within the district’s borders.  Starting next year, grades 7-12 will attend Westinghouse in the Pittsburgh Public School District.  That will leave Wilkinsburg with two elementary schools–Kelly, with 361 students and Turner, with 255 students, based on the most recent data from the PA School Performance Profile.

In an August 2014 article related to school size and what districts in Allegheny County have done in response to declining and/or shifting enrollments and the presence of expanded charter school options, the Wilkinsburg school board president noted that “The expenses of running the district don’t go down because a student leaves”.  About 270 of the student body is leaving under the PPS arrangement, and there will be a tuition payment of $8,000 per-pupil based on the agreement made with the approval of the state.  It is not clear what will happen with the school building that will be vacated, nor what will happen to the teachers employed by the district that taught in the grades being transferred.

One item that does not appear it will change is the District’s property tax rate, which will remain at 32.68 mills for 2016-17, that rate it has been since 2013-14.  If Duquesne’s experience is any guide, its tax rate remained at 21 mills from 2006-07 through 2012-13, then fell to 17.5 when the reassessment took effect, and has stayed there since then (it is not clear what the 2016-17 rate will be).

What Does Mid-Point Census Estimate Mean For Pittsburgh?

The 2015 estimated population counts for incorporated places was released this past week (this table shows changes for places of 50,000 or more people) showed a slight decline for the City of Pittsburgh from 2014 of 1,374 people, and, based on the official 2010 census count of 305,704, a decline of 1,313 people.  City officials don’t agree with the estimates as indicated by comments from this article which is similar to the comments made by the County Executive in March when the metro area estimates were released.

So where did Pittsburgh stand with mid-decade estimates in the previous two decades?  The data from the Census’ historical estimates data shows the following:

1990 official Census count: 369,879

1995 estimate: 353,781

2000 official Census count: 334,563

2005 estimate: 316,718

From Census to estimate, the previous two decades had drops of 16,098 and 17,845 respectively.  If we eliminate the estimates and just go Census to Census, the 1990s change was 35,316 and 2000s was 28,859.  Sure, there was a lot of development in Pittsburgh in those decades as well, but it did not translate into population growth.

Based on the Census estimate data, if we look at cities of roughly the same population count as Pittsburgh starting from the 2010 Census (cities that had a range of 320,000 to 290,000 people) only St. Louis reported a drop by the 2015 estimate.

PA’s Oldest Assessed County Preps to Move Forward

“Elvis had hit songs the last time this was done.”

That would be Presley, not Costello.

But the county in question is clear–Blair County, last reassessment conducted in 1958, will be with new values in 2017.  As we pointed out in a Brief last year, and in this week’s Taxpayer Q and A on Indiana County (they last reassessed the year of Elvis’ comeback special), Blair County is one of three in the western half of the state that is reassessing in 2016 and 2017.  Taxpayers in the County should be receiving their change of value notice around July 1st of this year.  Prior to that the County plans on holding a series of public meetings on the process.



Philadelphia’s Fiscal Impact Requirement Fairly Limited

Our latest Brief addresses the proposal for legislation in Pittsburgh to undergo the requirement of a fiscal impact study.  These are done regularly in the PA General Assembly, but wanted to know about the local level.  We contacted Philadelphia and spoke with their Budget and Program Evaluation in the Office of Finance.  It turns out that in 2013 an ordinance calling for fiscal impact statements was passed and signed into law.

While Pittsburgh’s proposal would apply to all ordinances, resolutions, and executive orders, Philadelphia calls for fiscal impact statements on ordinances other than those making an appropriation, and it is only done at the request of the sponsor of the bill or by three other members of Council (there are 17 total) and either the Finance Director or the Controller can conduct the study.  The statement is to be completed within a specified time period from when either the bill is forwarded or when the first committee hearing on the bill is held.

According to the Budget office one such impact statement has been completed to date and that dealt with a tax abatement program.

Transit Support Fund Runneth Over

The County Controller released the 2015 Comprehensive Annual Financial Report (CAFR) for 2015 and the Controller’s press release on the CAFR pointed out the $16.1 million fund balance at the end of the year for the transportation fund that provides the local match for Port Authority mass transit.  Setting aside what the Controller argues to be done with the money in the press release for the time being, let’s look at the intertwined financials of the County’s transportation fund (primarily exhibit B-3 of the CAFR), the budget of the Port Authority, and the budget of the Regional Asset District.  Note that of the three only PAT operates on a non-calendar fiscal year.

The County taxes alcoholic beverages at a rate of 7% and car rentals at a rate of $2 per day.  In FY15, these two taxes raised a combined $46.4 million; penalties and interest added $1.1 million, bringing transportation fund revenues to $47.5 million.  Total expenditures–state law requires that a local match for mass transit operations be 15% of state money–from the fund were $29.0 million.  But the state, based on PAT’s 14-15 budget, provided $212.4 million, and 15% of that is $31.8 million.  That’s where the RAD board comes in, providing the remaining $3 million of operating assistance, as they have since 2013 when the previous Governor came through with $30 million in additional state operating assistance, which was prior to the passage of Act 89.

So with $47.5 million in revenue and $29 million in expenditures, what happened to the remaining money in the transportation fund?  $17.1 million was transferred out of the fund–$9.9 million to the debt service fund, $7 million to the capital projects fund (the County has to match PAT capital at 3 1/3%), based on exhibit B-3.  That left $1.3 million in the fund, but the fund balance at the beginning of 2015 was $14.7 million, meaning year end was the $16.1 million from the press release and news coverage.

Could the tax rates be cut?  Seems like there is more than enough money to meet operating and capital needs at PAT.  What about RAD?  Is their board asking why they need to put $3 million toward the state operating assistance match even though the two taxes for transit support are bringing in plenty of money?

County administration officials stated that there could be a bump in “future increases in County subsidy” and with upcoming capital projects that money might be needed.  But even looking at pre-to post-Act 89 state operating assistance with PAT’s FY16 budget showing $221.5 million from the Commonwealth being a $36 million increase over FY14 ($155 million in state assistance plus the additional from the Governor at $30 million, total $185.6 million) the County, if it was doing the 15% match without RAD money, would have grown $6 million.

For 2016, the County budget director projects that it will send $30.2 million in operating match and $8.5 million in capital to PAT.  Counting in the additional $3 million in RAD operating assistance, that’s $41.7 million.  The County’s 2016 fiscal plan projects that the drink and car rental taxes would bring in $43.2 million.

County Boosts Hotel Tax

No, not Allegheny County, although there has been mention of that made and we wrote about the proposal last summer but what also happened last summer was that the General Assembly gave permission to other classes of counties (first class-Philadelphia, second class-Allegheny, and second class A–Bucks, Delaware, and Montgomery were exempt from this permission) to raise their hotel tax from 3 percent up to a maximum 5 percent.  The act allowing the action spells out what the money must be used for.

The county in question is York County, which opted to boost its rate, an action taken by several other counties in that part of the state according to an article.  For a look at where Allegheny County’s hotel tax revenue (based on its 7% rate) goes, click here.

Act 141 Meets Act 88 in State Capital

The Harrisburg School District is one of four school districts in financial recovery status under Act 141 of 2012, which we have described previously as an Act 47 for school districts.  Part of the law involves the preparation and submission of a school recovery plan by the chief recovery officer.

According to an article, upon the presentation of the recovery plan, (which can be viewed here) the Harrisburg Education Association announced that it intended to strike after working without a contract for close to four years. Members of the union that showed up to a meeting detailing the plan wanted to know what the plan’s impact on bargaining might be.

Act 47 says new collective bargaining agreements cannot violate the terms of the recovery plan.  What does Act 141 say in this regard?  While Act 141 gives the school board power to cancel or renegotiate contracts, collective bargaining agreements are exempt from this provision but it does state that the board can “Negotiate a new collective bargaining agreement if the negotiation of a new collective bargaining agreement will effect needed economies in the operation of the district’s schools.”


City Pension Fund Ratio Flat

“Better than it was” or “it could be worse”.  That’s about what one could say regarding the latest numbers from the City of Pittsburgh’s pension trust fund.  At 55% funded, that puts Pittsburgh in the “moderately distressed” category from Act 44 of 2009.  The last official funded ratio with PERC (December 2014) was 58%.  There are 27 municipalities that had a “severely distressed” rating, and thus are worse off than Pittsburgh.  In terms of big cities in PA, Pittsburgh is in the same range of funding ratio as York and Allentown.  Over 800 municipalities were given a “not distressed” score in 2014.

The chart from the City pension board’s valuation report from January 2013 (see chart 3 on page 25) the aggregate funding ratio rose from 34% in 2009 to 58% four years later, prodded on by the changes mandated in Act 44.  More recently, the October 2015 statement showed a funding ratio of 56.8% for the three pension plans.