Some Wilkinsburg Furlough Details Emerge

Earlier this year when we wrote about the partnership between the Wilkinsburg School District and the Pittsburgh Public Schools we speculated about what would happen with teachers at Wilkinsburg.  With the District closing its middle and high schools, enrollment would be falling and teachers would not be needed there.  But with students from Wilkinsburg going to Westinghouse, the enrollment there would increase and clearly more teachers would be needed, but it was not clear how many and if any Wilkinsburg teachers would be hired (the agreement between the Districts said PPS could consider hiring them, but were not required to do so).

According to a newspaper report, Wilkinsburg has given furlough notices to 20 teachers.  Some of those furloughs went to elementary school teachers who are “…being bumped by a high school teacher with more seniority because that high school teacher also has elementary certification” according to the acting superintendent.  Unless those employees also have a high school certification they probably would not be considered for employment with PPS.  That is where the state’s $3 million in transition funding for the transfer will likely come into play.

The most recent state audit of Wilkinsburg (covering a period from 2010 through 2013) said that Wilkinsburg employed 127 teachers.

Residency Issue Will Be Settled By Court

It has been nearly four years since the General Assembly amended language in the Second Class City Code (applicable to Pittsburgh only) pertaining to a residency requirement for Pittsburgh police (see this Brief detailing the change).

We wrote then that the debate over whether to allow Pittsburgh police to live outside the City limits would be heated.  The debate has now reached the state Supreme Court, following arbitration, a home rule charter amendment on residency, and lower court decisions. 

The arbitrator’s decision said that police would still be abiding by a residency requirement, but one that would let them reside anywhere within a 25 mile radius of Downtown Pittsburgh.  That would open up a significantly larger area than having to reside in the City of Pittsburgh limits, which is what would be the standard given the home rule charter amendment.

County to Provide Borough’s Police Service?

Allegheny County Council plans to hear a proposal this week for the County police to “provide basic police and law enforcement services” for the Borough of Wilmerding.  Based on the municipality’s website it currently gets police service provided by North Versailles Township, a neighboring municipality.

The agreement would be completed under the terms of the Intergovernmental Cooperation Act, which states “Two or more local governments in this Commonwealth may jointly cooperate, or any local government may jointly cooperate with any similar entities located in any other state, in the exercise or in the performance of their respective governmental functions, powers or responsibilities”.  The law defines local government as a county, city of the second class, second class A, third class, borough, incorporated town, township, school district, or any other general purpose unit of government.

Whereas it is common for municipalities to contract out to another municipality for police service or to be part of a regional (multi-municipal) force, many municipalities rely on the state for police service, which brings up multiple issues that we have written about before.  That the County police is primarily responsible for ” public safety and security services at the Pittsburgh International Airport, the Allegheny County Airport, and Allegheny County parks as well as investigative services to all of the municipalities within Allegheny County” this would be a departure from that traditional position.

Marcellus Shale Impact Fees Fall

The Pennsylvania Public Utility Commission (PUC) released the impact fee totals for 2015 at $187.7 million—sixteen percent lower than those collected in 2014.    In fact the high-water mark to date occurred in 2013 when the impact fee garnered $225.7 million.  In 2014 that number fell slightly to $223.5 million.  The impact fee has been collected for five years (since 2011) and had not been less than $200 million (2012 realized $200.5 million).

 

Of course this new total reflects the steep decline in the price of natural gas as traded on the various exchanges based on the sale at various gas hubs—specifically the Henry Hub in Louisiana but also at local Pennsylvania hubs.  As the trading price has fallen, the number of new rigs being drilled has also declined.

 

To refresh our readers’ memories, the impact fee is a graduated fee based on the average price of natural gas as traded on the New York Mercantile Exchange based on activity at the Henry Hub.  It also is dependent upon the age of the rigs as they tend to be charged less as they get older, of course depending upon the price of gas (see Policy Brief Volume 12, Number 11 for a fee schedule).  An upcoming Policy Brief will look at the details more closely.

 

There is no doubt that the low price of natural gas has had a ripple effect throughout the industry.  When the technology first became feasible and the first wells were drilled, news accounts were full of stories of booming towns and growing employment levels.  However, over the last year or so, we have been hearing about falling natural gas prices which have caused natural gas companies to scale back activity.  The stories have been there, but up until now had not seen the tangible results.

 

The Marcellus Shale industry had been propping up the state and local economies for the last five years.  Many counties and municipalities have been relying on the local share payments from the impact fee.  Is 2015 the first sign of a shrinking industry or is it a small drop that is temporary?  One thing is certain it is very foolish to pin economic hopes on one industry, especially one that is so dependent upon supply and demand.

Education Spending and Taxes

The state Department of Education has made 2014-15 data on school district spending and revenue available and what that data shows is that statewide the average per-pupil expenditure was $15,854 with $8,544 (54%) accounted for by actual instruction costs.  With state and local revenue accounting for most of the per-pupil revenue total, statewide the average was $9,197 coming from local sources and $5,802 from state sources.  When combined, state funding per-pupil averaged 39% statewide.

How do the 43 districts in Allegheny County compare for 2014-15?  On average, school district spending here was $2,000 higher per-pupil ($17,892) and the instructional cost difference was $1,500 ($10,036).  On the revenue side, the local revenue per-pupil average was $10,950 and state revenue per-pupil average was $5,912 (35% average).  Combined, in Allegheny County the local and state revenue combined was $16,862 whereas the state average was $14,999.

Looking closer at revenue, especially the state share of funding since that garnered a lot of attention and produced a formula that will drive new state funding (above what went out in 2014-15, which will be a base amount going forward).  Ten districts in Allegheny County received 45% or more of its combined local and state funding from the state.  Five–Duquesne, Clairton, McKeesport, South Allegheny, and Sto-Rox–received 60% or more of their combined per-pupil amount from the state.

Four districts–Pine-Richland, Mt. Lebanon, Fox Chapel, and Quaker Valley–received 20% or less from the state.

Philly’s Soda Tax Not Just For the Kids

Remember back to the turn of the decade when Pittsburgh’s then Mayor was pushing the idea of a sugary drink tax?  If not, read about those days of yesteryear here, here, and here.

The Mayor’s idea was to use the revenues for the pension fund.

Out east, where pop becomes soda, a new 1.5 cent per ounce (originally it was proposed at 3 cents per ounce) and despite it being sold as solely for pre-K, community schools, and park and library improvements but at a meeting this week it came to light that $41 million will go to the City’s fund balance.  The tax is projected to raise $91 million annually. 

Lodging App Becomes Tax Collector

Last summer we wrote about how the lodging app AirBNB was close to having its transactions subject to Allegheny County’s hotel occupancy tax.  That happened earlier this year. 

While last year the app had agreements with a few local governments, a new article says that it has expanded to states (they levy occupancy taxes too) and other local governments and now those agreements are being used as a sweetener to entice localities to allow the business to operate in various jurisdictions.

Of course, while the company is addressing the U.S. Conference of Mayors this month,  the local collection method in Pennsylvania leaves the levying of hotel taxes at the county level, and the beneficiaries of the tax are largely tourism-related rather than general operations.

Task Force Quiet on Appeals, But Mentions Circuit Breaker

 

In April the Mayor of Pittsburgh withdrew all City-initiated appeals of property values for 2016 and a press release from the Mayor’s office stated “The moratorium will remain in effect for the remainder of 2016, and a new policy will be implemented by the Administration as part of the Mayor’s Affordable Housing Task Force.”  As we noted in a Policy Brief Council passed a resolution prior to the moratorium that contained some recommendations of what could constitute a new appeal policy for the City.

The Task Force report was released yesterday, and the Mayor’s press release on the topic notes that one of the recommendations is to “[protect] existing homeowners and tenants citywide through efforts including controls over reassessment spikes” and the report’s recommendation 3.2 calls for the establishment of a “real estate tax circuit breaker provision”, which has basis in PA Constitutional and statutory law, and some history with Allegheny County and the City of Pittsburgh, but does not deal with appeals of property.

Article VIII, Section 2(v) allows counties of the first and second class (Philadelphia and Pittsburgh) to enact programs for long-term owner-occupants where property values have risen because of improvements in the areas around them (this was approved in a referendum in November of 1984).  Act 146 of 1988 provided the statutory language of the provisions and allowed Allegheny County and its subdivisions (municipalities and school districts) could opt in as well.  The program allows for a “deferral or exemption” that must be uniform and in specifically designated areas where “…the market value of the real property as a consequence of the refurbishing or renovating of other residences or the construction of new residences in long-established residential areas or areas of deteriorated, vacant or abandoned homes and properties.”

According to the Task Force Report, Allegheny County had enacted a provision for this purpose in 1990, but it was struck down by the courts in 1995.  The City has language in its code of ordinances for the provision, but the Report notes “…it appears to be dormant for some time.”  Three years ago there was a proposal by a member of City Council to use part of the City’s share of the RAD tax to enable the provision, but as we noted in 2014, that money went into the City’s general fund.

The Report makes suggestions on how this provision should be revived, and most of it deals with asking the County to determine how to make the program compliant for municipalities and then tweaking the City’s language.  Of course, if the provision is reactivated it would exist alongside the City’s homestead exemption and the senior citizen tax relief program under Act 77 (the RAD law).  But it would not keep a property from being appealed, as there are thousands that are that carry one or all of the existing exemptions.  As the Report does not appear to address appeals, it is not clear at this point what the City will do unless it will utilize the language and guidelines from the Council resolution from February.

 

Two Western County Districts Plan Tax Hikes, Wrestle With Furloughs

Recently there was discussion and debate in Harrisburg over the role of seniority in determining teacher layoffs.  Part of those proposals, including the bill that passed the General Assembly and was vetoed by the Governor, would have expanded the list of reasons a school district can furlough professional employees by adding “economic reasons”.  Under section 1124 of the PA School Code, furloughs can occur because of a “substantial decrease” in enrollment, the curtailment or alteration of the education program, or where schools are consolidated wither within the district or via a merger or consolidation of existing districts.

Two districts in western Allegheny County are dealing with their 2016-17 budgets and the topic of furloughs has come up in both.

Moon Area School District plans to raise property taxes and possibly borrow some money.  Because the District has not had a drop in enrollment, the superintendent noted “[their] hands are tied as to what you can do“.  She also noted “In the commonwealth, you are not allowed to furlough people for economic reasons. You have to have a drop in enrollment, which we do not have a significant drop” (the other two reasons were not mentioned). Moon did shutter a school building in March and furloughed the staff there.

A district that borders Moon Area, Montour, also is planning on raising property taxes for 2016-17 and may furlough teachers and staff but can do so because enrollment has fallen and the District may eliminate duplicative classes.  Based on comments made in an article, enrollment fell by 500 but staff adjustments were not made.  Based on a 2014 series on school size and district adjustments, Moon Area has about 1,000 more pupils than Montour, and are in various stages of closing schools.