August Wilson Center Off- Kilter Rhetoric

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The never ending saga of what to do about the financially insolvent center has produced another great quote. According to the niece of Mr. Wilson, the judges need to be reminded that they are elected and must represent the interests of the people. In other words, they must rule against the developer and Dollar Bank.

It would appear that the niece has forgotten what judges are elected to do. They are honor and oath bound to rule on the law and the facts of the case, not on whether one side can fill a court room with advocates for the “people’s” interest.

Ironically, the people’s interest is part of the larger scheme of our tripartite government and is represented in and by the judiciary. Maintaining the rule of law for all is in the long term greatest interest of the people. That is why the system is designed the way it is. The judges must look at the facts in the case, the contract agreements and their stipulations. Then the judges must rule on the facts as the law requires. To base their decisions any other way is a paving stone on the road to the perdition of anarchy.

Act 47 Changes Approved

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The changes proposed to reform Act 47—the municipal fiscal distress statute—have been approved in the Senate on a unanimous vote.  We wrote earlier this month about how the proposal would allow Act 47 municipalities to increase their Local Services Tax while in distress (choosing to do so would mean that the distressed municipality could not also seek increases to its wage tax while in distress).  Pittsburgh has always been forbidden from increasing its wage tax while in Act 47 (so long as the oversight board is in existence) so the legislation prohibits the City from utilizing the Local Services Tax option.

Quite possibly the most intriguing portion of the proposed legislation is the “disincorporation of nonviable municipalities” section.  Once a recovery coordinator has determined that a municipality cannot deliver essential services, has deteriorated economic conditions or a collapse of its tax base, and no other municipality is willing to explore a merger or consolidation, then the distressed municipality would begin the process for disincorporation, quite a radical concept in a state where every square inch is incorporated as a city, borough, township, or home rule municipality.  Presumably, by the legislation’s definition, all local governments except Philadelphia would be eligible, but of course would have to be under Act 47 status.

Kudos to the East Allegheny School Board

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Due to state law requirements from Act 88, which permits public school strikes, teachers in the East Allegheny School District will have to return to work tomorrow.  The strike lasted 16 school days.  What does this mean for the 2014-15 school year?  The calendar will likely stretch farther into June or holiday breaks may be lost.  The calendar that is posted on the District’s website as of today shows Veterans’ Day, a two-day Thanksgiving break, three day Christmas break, one day for New Year’s, Martin Luther King Day, and Memorial Day as no school days with no spring break and no teacher work/in-service days noted.  That would keep things on schedule for a June graduation, the date of which is not noted on the calendar but appears to be June 6th following a baccalaureate ceremony.

The strike wasn’t the longest in Allegheny County’s recent history (since 1997) with strikes in Bethel Park (30 days in 2010-11), Riverview (21 days in 2002-03) and Highlands (21 days in 1999-00) lasting longer.

The board is to be commended for not caving in to demands and defending taxpayers from further tax increases that would likely have to be repeated in future years to fund more lucrative compensation packages.  The District, like other districts, is facing huge pension increases over the next several years and with little growth in tax base it is impossible to continue boosting pay packages until there is some relief from the pension demands.

One silver lining from the strike?  The teachers decided they would not hold up picket signs at football games and events.  How considerate of them.

Property Tax Boost on the Table for City

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Having made it through a decade of recovery while a slew of state-level tax changes touched virtually every other tax levied by the City (the $10 Occupation Privilege Tax was hiked to $52 and is now known as the Local Services Tax, the earned income tax got a portion of the rate levied by the School District, the Business Privilege Tax and Mercantile Tax were phased out and replaced by the Payroll Preparation Tax, the Parking Tax was increased in 2004, set on a reduction schedule to 35%, then kept at 37.5% as a result of a 2009 pension law) the property tax—the biggest tax revenue generator for the City and budgeted at $128 million for 2014—could be raised in 2015 by half a mill.

The proposal should not come as a total surprise as the Act 47 team recommended the increase in its third recovery plan along with asking the Parking Authority to boost rates (done August 1) and for fees and charges to be reviewed more frequently.  Call it the “millage rate that shrunk too far” as the reason for the millage hike is being placed on the reduction from 10.8 mills to 7.56 mills to comply with Act 71 requirements that follow a reassessment.  There’s nothing that prevented the City from raising the millage rate in 2013 (it would have been limited to a 5% limit in a separate vote, but could have petitioned the courts for a higher increase) or 2014 (free of Act 71 guidelines) but it appears 2015 will be the year for an increase.  The City’s total taxable value (total value less exempt property) is $20 billion based on the most recently available audited number for 2013.

The budget will go to the oversight board and then to City Council before the fiscal year starts on January 1st. Will there be a close examination of the numbers?  As our June Brief pointed out, revisions pushed other tax projections up, but not the real estate tax and revenues essentially stayed at a total amount where they were earlier in 2014.  There are still plenty of opportunities for savings and it would be reasonable to expect there would be growth in real estate tax collections from ongoing activity.

Who’s to Blame for Woodland Hills’ Woes?

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It was inevitable, the announcement made yesterday that the Woodland Hills School District would be revamping curriculum, school alignments, and shuttering three schools in order to “…make Woodland Hills an academically competitive school district again”.  It is unclear when it was academically competitive previously but it is clear that the last decade has not been kind to the District’s enrollment, which fell 31%. 

The school closings are supposed to save money, as were the school closings that occurred in 2009, which were recommended back in 2006 by a previous superintendent.   Those were supposed to save money as well.

So, what hinders the District?  One official has blamed state funding and the reluctance of the school board to raise taxes up to the Act 1 index each year, which the official feels other districts in the region have done, but it is not clear which ones.  Woodland Hills is getting more money from the state now than it did in 2004-04 ($7 million).  It is down $2.3 million since 2009-10, but Federal money is down $3.5 million since that year as well.  So why does the state get the blame alone?

The District boosted taxes in 2007-08, 2009-10, and 2012-13.  Does the official want Woodland Hills to mimic fast growing South Fayette, or merger-partner-in-waiting Cornell?  Both districts increased taxes almost every year since 2006-07, but no one would reasonably argue that the two districts are headed in the same direction.  The District could go over the index from now until it wants to and either get state exceptions to do so or put it on the ballot for the voters to approve or disapprove.  The latter option would give District officials a clear indication of what communities feel about the changes.

Proposal for Bike Fairness

The latest fad for socially conscious urbanites is cycling.  Complete with bike paths running along existing roadways previously used by autos, trucks and buses with the drivers of autos and trucks paying the lion’s share of taxes to build and maintain them.

Here’s the problem, if bike riders want to have strips of roads taken to be dedicated to bicycle use, they ought to be willing to help pay for their construction and maintenance.  How about an annual assessment for a license medallion for any bike using a dedicated bike path?  Maybe $100 per year?  Bicycles would be registered and have safety inspections to insure brakes and other parts are in good working order. Inspections would cost $20 with half going to the maintenance funds for bike paths.

Next, the City and County should enact mandatory safety classes for cyclists and issue a certificate indicating successful completion. Failure to obtain an operator’s safety certification would result in fines and a prohibition against using the paths for some appropriate period. Bikers would be cited for traffic violations and slapped with fines just as motorists would be. Injuries to pedestrians would lead to serious charges. Cycling while intoxicated or under the influence of drugs would result in a loss of privileges for one year and a second offense a permanent ban.

If bikers want to be treated as equal players in the transportation game, they must be held to account in the same ways as cars and truck drivers, monetarily and in terms of operational safety.

One wonders what will happen to bike path usage once the icy winds blow, the snow flies and the plows push the snow into the paths.  How exciting will biking be from December through March?  Will bike paths along important roadways be eliminated during the winter to help traffic flow?

Cyclists will argue that they pay property and other taxes, some of which are used on City streets entitling them to have dedicated paths.  But residents driving cars and trucks pay those other taxes as well.  And it is no good saying; I have a car and pay gasoline tax. That tax is intended for use on the roads, not bike paths. This is akin to the requirement that the turnpike provide $450 million a year to mass transit, money it is borrowing and raising tolls to repay. It is a terrible policy.

How progressive it is to want to effect a redistribution of public goods to in-vogue groups, especially if it can be done at the expense of out of favor groups, such as CO2 emitters.

Where Will Departmental Consolidation Savings Come From?

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Based on the 2014 sunset review of County government by the County Manager, a County Council committee voted to move forward with the recommendation that the Department of Real Estate be absorbed into the Department of Administrative Services.  The former is what became of the independent row office called the Recorder of Deeds, and the thought is that its role would mesh better in the latter, which is almost a “catch all” department that handles multiple functions, including property assessment.

The estimated savings of such a move is $250,000 a year.  To put that in perspective, the large Admin Services Department spends $226,000 on supplies.  In terms of headcount, Admin Services has four times as many employees as Real Estate (226 to 50 full timers).  Based on salaries and fringe benefits, the average employee in Admin Services costs $64,159 and the average employee in Real Estate costs about $10,000 less.  That means if the $250,000 is to be saved by having an employee handle the responsibilities of another it could mean 4 or possibly 5 employees could be let go or not have their positions filled after consolidation.

If they leave personnel costs alone (wages/fringes total $14.5 million for Admin Services, $2.7 million for Real Estate) and the $250,000 is to be saved from non-personnel expenditures, there is a total of close to $2.8 million in those categories (services, supplies, materials, repairs/maintenance, and minor equipment).  That means the savings would amount to about 10% of the total of the non-personnel amount.

A Longer Look at School Employment Growth

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Last month we wrote about a study that looked back to 1970 to track the change in public school enrollment, teacher employment, and non-teacher employment.  The study found that enrollment grew 8%, teachers grew 53%, and non-teachers grew 130%.

Now comes an article in the Washington Examiner that includes a look back as far as 1950 and that school employment has far outpaced student population.  While the student to teacher ratio was 15.3/1 five years ago, the student to non-teacher staff ratio was 7.8/1.

The article points out that the consolidation in the number of school districts—in 1940 there were 119,000 in 1960 there were 40,000, in 1980 there were 16,000—has placed the control of schools under the doctrine of “scientific management” and best practices.  In Pennsylvania the number of districts fell from 2,546 in 1942 to 500 currently, with much of the consolidation happening between 1962 and 1967.  A handful of states have significantly fewer school districts now than they did in 1992.

Spending per-pupil has gone up, and so has non-teacher employment, but results have not.  The fact that employment has exploded while the number of school districts fell is astonishing and should provide a cautionary lesson to those looking at consolidation of school districts or other local governments to produce big savings or efficiencies.

Bicycles Taking Over?

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The County Exec has unilaterally appropriated bridge lanes for biker use (can he do that legally one wonders). The Mayor has hired a bicycle director. All very strange behavior but of a piece with the progressive mentality that reigns in Allegheny County and Pittsburgh politics. Schools can be dreadful, murder rates and crime at scary levels but government seems bent on the transformation of travel in the City.  Closing bridge lanes to autos will make traffic problems worse. And one must wonder what happens when the icy weather comes and riding bikes through the City is not attractive even to the most avid cyclist. Will the lanes be reopened to autos?

 

But there might be a bright side. If enough commuters opt to get to work on bikes, perhaps the talk of needing more money for mass transit expansion will subside for a while until the love affair with bicycles cools to a distant memory.

 

Would it not be nice to see the City’s real problems of financial stability, crime, education of the young get so much attention? The poor schools drive away families with school age kids. Bicycle lanes and bicycle directors will not bring them back. No city will thrive without families. It will always be searching for some gimmick to attract the twenty somethings. And then watch them leave when they have school age kids. Unless of course they are very well to do and can send their kids to private schools. And that outcome should be anathema to progressives who claim they are so concerned about income distribution.  Are they really concerned or just playing politics?