An Uber Effect on Medallions?

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On the other side of our fair Commonwealth, the taxicab system is quite a world away in terms of regulation.  While Pittsburghers following the ridesharing debate in 2014 might have gained an understanding of the inner workings of the Public Utility Commission and its regulation of taxicabs in the City and other parts of the state, Philadelphia’s Parking Authority regulates taxicabs in that City and operators need a medallion to operate.

The regulatory environment leads to a restricted supply of cabs, making medallions quite valuable.  An article examined the performance and ownership structure of medallions in large American cities in light of the competition being brought by ridesharing companies.  One of those cities was Philadelphia, which just held an auction at which no bids were taken on the Authority’s bid price of $475,000 per medallion.  There are other reasons that have been speculated upon, but it could be an effect of new entrants into what has long been a hard to enter business.   Without medallions, Pittsburgh and other parts of Pennsylvania will never get to see the outward signal of what happens to the price to get into the cab business as more options become available.

Turnpike Commission Urged to Increase Ethics Training

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Surely a sign of the times and a meaningless and useless suggestion.  Following a Turnpike scandal a couple of years ago a panel was formed to make recommendations. And predictably they are just out with a recommendation that includes more ethics training. Why not more morals training as well?  As certain as night follows day, there will be ethical lapses in the future and more scandals.

The problem is the culture and nature of the Turnpike itself.  It is saturated with politics. That is its history.  Ethics as we have learned are not a strong suit in Pennsylvania’s government. Sadly, so much of the government’s apparatus attracts people who see the public trough as the means to economic success.  The bigger government is, the more the greedy in and out of government see gravy trains to be ridden.

Privatize the Turnpike. At least then any ethical lapses would not reflect so poorly on the state government.

What Happens When a City Budget Gets Rejected?

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So the City’s 2015 budget proposal was rejected by the oversight board yesterday.  That means the City gets 15 days to submit a revised plan and then, after it is submitted, “the [oversight board] shall determine whether the revised plan satisfies the criteria set forth in subsection (g)(1)”.  That subsection of the law states that the oversight board has to review each financial plan, operating budget, and capital budget and that there are “prudent, reasonable, and appropriate assumptions” and that the operating and capital budgets are consistent with the financial plan.

But what happens in the rare event that the City’s resubmission of the plan after the 15 day period is rejected by the oversight board?  The law directs the oversight board to notify the state, which is empower to withhold funds to the City (with certain exceptions) and place them in escrow until the oversight board members determine that whatever caused the non-compliance with the plan is no longer doing so and the state action is halted.

Pennsylvania School Scores in Limbo

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Proving once again that incompetence reigns throughout Pennsylvania’s public education apparatus, the Department of Education still does not have the reports on 2013-2014 test results ready for release. These tests were taken at least six months ago. They were due to be released in September, then October first and now they are being delayed again and no one is sure for how long.

The excuse is the Department needs to wait for schools to look over the results before official release.  But the real problems are never mentioned; political influences and thorough going incompetence in the Department.

Still, the even bigger problem is not in the delay of the scores, it is the terrible results for many schools that will be revealed. While educationists, liberal politicians and uninformed citizens clamor for more education spending, they never want to consider that the current level of spending ought to be adequate to educate youngsters.  It is the same old song, more money, more money followed by excuses as to why the test scores are so pathetic.

A recent survey by the Milton Friedman Foundation found that 49 percent of the public thinks school spending is $8,000 or less per pupil, with 20 percent believing it is less than $4,000.  The real answer in Pennsylvania in 2012-2013 was $14,600, with many far higher than that. Little wonder the education lobby is so successful in condemning anyone who questions the cries for more dollars for education. They have successfully propagandized the public long enough to create the false narrative about education spending.

Greenfields Get Subsidies, Too

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During the Governor’s visit to Pittsburgh yesterday to present $10 million in economic development funding to a site in Hazelwood, a local development official made the “priming the pump” argument of why the public needs to fund site development and noted “It’s too easy for developers to go into the suburbs and greenfield sites and build there instead”—implying that if there is no public money for older sites eager developers have the pick of the litter in non-urban sites and will do so on their own dime.

That would be true if the region was not littered with examples of state money, tax increment financing arrangements, and even neighborhood improvement district deals to make greenfield developments happen.

Think Pittsburgh Mills, Victory Center, the Mall at Robinson, Mt. Nebo Pointe as projects that involved a TIF.  That goes without mentioning proposals that stalled in Mt. Lebanon and in the Allegheny Valley. Who knows how many more came about with the involvement of one of the components of the alphabet soup of programs offered at the state and local level.

If it is easy, why does the state and local governments offer to pony up dollars or make incentives available?  And when does the public investment in non-developable areas reach its apex?

Calculating Local Police Costs

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A new report from the state’s Legislative Budget and Finance Committee on municipal police service in Pennsylvania explores several interesting topics, including some which have been discussed in southwestern Pennsylvania and written about by the Allegheny Institute.

Under existing law, Philadelphia, Pittsburgh, and Scranton (cities of the first class, second class, and second class A respectively) are required to provide police service while other municipal classes (third class cities, boroughs, townships) are authorized but not required to do so, according to the report.  There are opportunities for contracting out to neighboring communities, participating in a regional police department, or having the state provide coverage are all options.  With 2,500 municipalities in the state, the arrangements work out as follows:

  • State police provide all police service to 1,279 municipalities and part-time service to 420 municipalities
  • 986 municipalities have their own police force and 136 of these contract out their services to other municipalities
  • Twelve municipalities have a police force with over 100 full-time officers
  • There are 35 regional police departments in the state, with the oldest in Allegheny County (Northern Regional in the North Hills) and two are in Washington County

The report points out many of the hurdles to consolidation departments (cost, control, pensions, etc.) and offers several case studies of recent consolidations.

A Novel Approach for a Distressed District

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York City School District is under Act 141 status, which is essentially the public education version of Act 47 municipal financial distress.  It even has a recovery officer and a recovery plan.  That plan found that of 7,658 school age students in the District, 5,130 (67%) attended one of the District’s schools, and 2,450 (32%) attended a charter or cyber charter school (the remainder attended an alternative school).  The plan noted “a growing share of the total student enrollment is moving away from the District schools to charter schools” and survey data seems to indicate that parents are very satisfied with the results of the charters.

The recovery officer is proposing to turn over three of the District’s schools to charter management while leaving the remaining five in the hands of the District.  Student progress and parent satisfaction would be measured and, after four years “…whichever model was working better would be pursued”.  A third party would monitor the progress.

Of course, members of the teachers’ union are not happy with the proposal, even as they can see with their eyes the movement of children to charters.  One of the complaints is that the company that could manage the schools might “pump its own money into schools”—here is a guess that many of York’s teachers are strongly in support of more funding via new taxes.

Rangers in County and City

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We know, you hear “ranger” and think of a baseball team or a fellow chasing a bear in a tie.  But the County’s proposal to place rangers in County parks and redeploy County police to other, as of now unspecified, parts of the County, made it into the County’s 2015 budget proposal.

The County would hire four full-timers to get the program off of the ground.  Seasonal rangers could come in the spring but the thrust is to expand the program to the nine County parks.  The park ranger division of the Department of Parks budget would be $400,000 total, with $276,000 attributed to personnel cost (personnel and fringe benefits).  That averages out to $69,000 per full-timer if the personnel costs don’t include anything for the seasonal workers.  The County placed the cost of a County police officer at about $100,000 per year.  The Police portion of the 2015 budget for Parks Police Division shows a full-time headcount of 50, the same as 2014.

The County, while it has garnered some attention on this proposal, is not alone in embracing the idea of park rangers.  The City has actually budgeted for one full-time park ranger in their section of the Parks and Recreation budget for 2015.  According to the Parks Department, the ranger will be based at Schenley Park.  Pittsburgh police aren’t based at City parks the way County police are, so it is not that the City’s ranger is helping to redeploy an officer somewhere else.

School Choice in Rural Settings

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A newspaper article over the weekend contained an interactive look at the growth in charter schools in Pennsylvania.  A map included in the data showed that 52% of the state’s charters are located in Philadelphia, and pointed out that “charter school enrollment in Pennsylvania, as nationally, is overwhelmingly urban”.

Outside of Centre County there is very little presence of charters in the northern tier of Pennsylvania.  Of course, students in areas without brick and mortar charters can access cyber charter options.

Another article from last week looks at the presence of charter laws in states that have over 40% of their population living in rural areas as defined by the Census.  Only three of those states have charter school laws currently.

Mayor Wants Fair Funding

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The Mayor of Pittsburgh appeared at an event calling for “…a fair, sustainable and predictable method for funding public schools that recognizes the shared responsibility we all have — and the shared benefits we all receive — when every Pennsylvania child gets that opportunity.”

Now the Mayor of Pittsburgh does not have any formal control over Pittsburgh’s schools, but he has convened a commission and asked for participation in a Federal program thus far prior to the event.

So what is fair?  In 2012-13’s fiscal year, the combined revenues from local, state and Federal sources for Pittsburgh Public Schools was $595.5 million, with 48% coming from local revenue, 41% coming from state revenue, and 11% from Federal revenue.  Does the Mayor think City schools aren’t getting enough from the state?  Ten years ago (2003-04) the state’s share in Pittsburgh was 35%, so as a percentage of the total Pittsburgh is getting more state money now.

Does the Mayor want the state to fund 50% of public school education?  Doing so in Pittsburgh, based on 2012-13 totals, would require $53 million more from the state to bring the total to $297 million.  To arrive at the same funding per-pupil in order to keep the 50% level would require cuts of $53 million from Federal and local sources.

Doing so in a district that generates much more from local sources like North Allegheny (2012-13 total revenue of $128 million was split $102 million local (80%), $24 million state (19%), and $1.8 million Federal (1%)) might be welcomed, but to get that district to 50% from the state would mean sending $10 million more ($64 million) than would come from the state to that district than Pittsburgh.  Would that be seen as fair?

Or how about if a district had to cap expenditures in relation to its state designed market value/personal income ratio?  At 0.4134 Pittsburgh’s spending of $20,594 stands higher than districts with ratios nearby to Pittsburgh’s.  Statewide only two districts in other counties are at the same aid ratio yet spending more than $20,000 per-pupil.