Allegheny County Council is on the verge of taking up legislation that would instruct the Council's solicitor to ask the courts to halt the reassessment ordered by a local court and the Supreme Court until the state reforms assessment laws. The argument is that it is unfair to force Allegheny County to reassess when so many counties across the state are not under court ordered reassessments. According to their reasoning Allegheny County should be off the hook until the Legislature and the Governor rewrite state law to force all counties to bring their assessments up to date.

As previous Policy Briefs have pointed out, the Council's case for a moratorium faces overwhelming obstacles.  After ruling on the County's assessment system in a lawsuit brought several years ago and having the court's ruling upheld by the Supreme Court, the Common Pleas Court has every reason to hold the County to the agreement, entered into under the terms of the Supreme Court decision, to reassess by 2012. With the large inequities in the County's assessments uncovered in the original lawsuit, any further passage of time with no resolution of the problem perpetuates and exacerbates the effects of the inequities.

Once again it must be asked, why are Council members so concerned about and protective of people whose properties are greatly under assessed and so blasé about the folks who are over assessed?  Some officials have argued that assessments can never be done accurately and therefore they should be left alone. If those who hold that view were serious they would be working to have property taxes repealed altogether to put an end to the inequities. That is not happening so their argument must be viewed as merely an attempt to avoid responsibility.

Assuming the local court is unwilling to stop the reassessment, the solicitor would be empowered to appeal to the Supreme Court.  It is a virtual certainty the high court is likely to be unimpressed with an appeal that wants the Court to put a hold on implementation of its 2009 decision until the Legislature finally gets around to fixing the state's antiquated and hopelessly out of date assessment laws. That carefully constructed decision held that massive assessment inequities perpetuated by the County's base year system are a clear violation of the Pennsylvania Constitution and must be fixed.  

But just as important, the Court recognizes that the Legislature has little or no appetite for taking on assessment reform and it cannot order the Legislature to do the needed reform. All it can do is rule on the cases brought before the Court.  Politically, assessment reform is a close relative to Social Security reform at the national level. It is a so-called third rail not to be touched despite the overwhelming and pressing need to deal with the issues. In view of the long demonstrated reluctance of the Legislature to tackle the assessment issue in a serious manner, the Supreme Court can have no confidence that revisiting their ruling on Allegheny County's assessment system or staying their order for the County to reassess will produce a positive outcome for anyone but politicians. Certainly, those who sued the County and won relief from the courts would be effectively denied due process if the unconstitutional system and inequities remain in place.                                   

There is little to be gained from this latest attempt by Council to get a moratorium on reassessments. There an was an unsuccessful attempt to get the Legislature to declare a moratorium on court ordered reassessments right after the Supreme Court decision in the spring of 2009-a decision upholding the Wettick ruling of July, 2007. There was even talk of initiating a Federal lawsuit to get the state Supreme Court decision overturned. Happily, that effort was nipped in the bud and before the County embarrassed itself even further.

It is time to bite the bullet and deal with the issue. If Council wants to do something useful, pass an ordinance that says the County will make the reassessment revenue neutral, that is, the County will change the millage rate in such a way to keep tax collections after the reassessment equal to the pre-reassessment level collections. They should also pass a resolution urging all taxing bodies in the County, municipals and school districts, to adopt a revenue neutral stance with regards to the reassessment. Then they should turn their attention to urging the Legislature to repair the seriously flawed state laws.

Economic development in Allegheny County over the last few decades has been driven heavily by government subsidies and directives putting taxpayers-County, state and municipal-in the role of venture capitalists.  This approach has produced minimal benefits for the citizens of Allegheny County in terms of employment gains.  

Since 1990 the County has sponsored or supported several high-profile economic development projects including the new airport terminal, sports stadiums, a new convention center, and a new operations center for a once prominent airline that continues to shed area jobs.  Despite the hundreds of millions of public dollars poured into these, and a large number of smaller, less prominent projects, the number of employed County residents is almost the same as the level reached two decades earlier.

In 1990, the average annual level of employment for Allegheny County, as reported in the Current Population Survey (commonly referred to as the household survey) of the Bureau of Labor Statistics, was 616,654.  By 2008, before the recession hit, average annual employment stood at 611,285-a small decline from 1990 and possibly a statistically insignificant change. The peak level during these two decades occurred in 1997 when the average annual number of employed reached 635,247.  Thus, the 2008 figure represents a 24,000 drop in the number of County residents working over the 11 year period. In fact, the latest recession lowered the annual average number of County residents working in 2010 to 591,721, a level not seen since before 1990.   

By contrast, Pennsylvania's statewide data shows that the latest recession dropped the level of employment only to 2003 levels.  From 1990 to 2008, the state's average annual level of employment grew 10.7 percent-certainly a more robust growth rate than that of Allegheny County with Commonwealth employment rising from 5.51 million to 6.1 million. Despite its own fascination with taxpayer-subsidized economic development, the growth in jobs across the Commonwealth was fairly steady for the better part of the two decades.  But it too could have performed better with a more business friendly approach that relied less on handouts to encourage private sector development.

Comparing the County's and the Commonwealth's performance with that of the nation as a whole illustrates just how anemic their respective employment gains have been over the last two decades. From 1990 to 2008, the average annual count of working Americans climbed by more than 22 percent.  Even taking the latest recession into account, the national employment level was still 17 percent above the 1990 reading. Meanwhile, comparing the County's 2010 employment to the 1990 reading shows a four percent decline while the state employment gain over the same period was held to 6 percent-about a third of the national rate.    

So what has the County been doing over the past decade or so?  Besides backing the high profile taxpayer subsidized developments mentioned above, they have also been focused on helping businesses relocate within the County's borders.  Dick's Sporting Goods moved down the road from its former facility, with help from taxpayer subsidies (Policy Brief Volume 8, Number 5) and American Eagle Outfitters relocated from Marshall Township to the City's South Side.  And let's not forget the County approved tax increment financing package for PNC bank to build a new office tower downtown. 

This resembles moving Potemkin villages more than an effective economic development strategy.  Obviously, as the employment data discussed above reveals, all this effort has had little payoff for net new job creation.  Proponents will argue that without all this public involvement, the jobs picture would have been even worse. That hypothetical cannot be proved. Moreover, the proponents' claim pre-supposes that public direction of development is the only option. Working to create a business friendlier environment has been given short shrift. Many of the problems stem from state laws dictating the labor and the regulatory climate, but by and large local officials have never gone to Harrisburg to have those laws changed.  So they are complicit in the relatively poor business climate that exists in the County.

The County's economic development approach has been necessitated by the anti-business climate that so heavily permeates local governments. This climate promotes labor union interests at the expense of employers. Allegheny County and the City of Pittsburgh have each recently enacted mandated wage laws, at the behest of labor unions, directing those who receive taxpayer money for economic development projects to pay a prevailing wage for those who will work in these developments.  While those who live at the taxpayer trough get no sympathy for taking government handouts, the message sent to firms, even those not receiving public money is loud and clear-local governments are not afraid to dictate terms of business.  And of course this begins a cycle of using subsidies to counteract mandates further entrenching government's role as developer.