The Mayor just appointed City Council's most junior member to the board of the Stadium Authority, an Authority that was created in 1965 to "provide increased commerce and prosperity, and to promote cultural, physical, civic, social, and moral welfare to the general public".  No doubt its role as the owner of Three Rivers Stadium did most of the above-the jury on how "moral welfare" was promoted is still out.

Consider that the new appointee had just become eligible to drive in the Commonwealth when the stadium was demolished, eleven years ago this month.  Since then, the Stadium Authority no longer owns any stadiums, that role taken over by the Sports and Exhibition Authority (the SEA performs administrative duties and gets reimbursed by the Stadium Authority) so the Stadium Authority is now relegated to playing land developer and constructed a parking garage in the land between the new stadiums. 

The Authority's financial statements make it clear that "the garage has not and will not generate revenues fully sufficient to cover expenses and debt service".  It took on a $20 million loan to construct the garage, and the financial statement states that the last payment will be December 1, 2028, somewhere around Super Bowl LXII.  Long-term leases involving the Authority and parking spaces last until 2050, just around the time the current Steelers' quarterback can begin collecting Social Security. 

A 2005 report to the ICA said that "operationally, the Stadium Authority could be operated by another City authority such as the URA".  That same report showed that as of 2004 the Authority had total assets of $9.4 million and liabilities of $9.4 million.  In 2011 total assets were $35 million and total liabilities of $44 million. 

Sure makes that admonition on the Stadium Authority's website in 2001 that its "existence and function will conclude with the planned demolition of Three Rivers Stadium" look funny after all these years. 

Notwithstanding its incredibly good fortune in being the home of vast natural gas deposits that are propelling much of the economic growth being experienced currently, the Commonwealth of Pennsylvania is losing its ability to compete for capital and jobs. The state has antiquated and seriously inadequate laws regarding property assessments, it faces enormous future government spending to keep its pension promises to teachers and state employees, it is a perennial leader among the states in teacher strikes, it is one of two states that still owns liquor stores, one of the state's two largest transit agencies is in undeclared bankruptcy, and its bridges and roads are ranked among the worst in the nation. 

Meanwhile, Wisconsin and Indiana have passed legislation that dramatically curtails the power of unions and their ability to drive jobs away and raise the cost of government. Neither state allows teacher strikes and in the case of Indiana has greatly expanded a voucher program to allow students choices other than failing public schools. Two things Pennsylvania has notably been unable to get done or in the case of banning teacher strikes has not come close to doing.

So, while we can congratulate ourselves for Marcellus related jobs and incomes gains and laud the powerful growth in education and health employment, it must be remembered that the extent of the state's dependence on education and health for jobs cannot be the basis for sustained, long term economic health.

Pennsylvania must address the pension crisis, the teacher and transit worker right to strike, the state of transportation infrastructure and continue its recent efforts to contain the spending that grew so profusely under the previous administration.  And if it really wants to get bold, it could eliminate the dues withholding for public sector employees and begin to talk seriously about doing with prevailing wage requirements on public construction projects.  But in a state that cannot even get itself out of the liquor selling business, the much desired reforms enumerated here are probably best regarded as fantasies.  

A few days before the "Big Game" the state of Indiana is poised to become the first rust belt state to enact a Right to Work law.  Both houses of the state legislature have passed the bill and it now goes to the Governor for his action.  Indiana would be the 23^rd state in the union to be a Right to Work state. 

It has been over a decade since the last state to join the ranks of the Right to Work fraternity, Oklahoma, did so.  The New Hampshire legislature passed a Right to work bill in 2011 but it was vetoed by the Governor

As we pointed out last summer, private sector union membership in PA fell from 15% to 9% yet the issue of Right to Work cannot make it to the floor of the General Assembly.  And the ever-present listings of "best places to do business" like Forbes shows that Right to Work states are consistently better performing than their non Right to Work counterparts.  But will the change in Indiana put pressure on Pennsylvania to act? 

The ongoing saga of the financial morass at the Port Authority (PAT) has developed an interesting twist.  Governor Corbett, through a spokesperson, has responded to PAT's entreaties for a hefty boost in money from the Commonwealth to cover an impending $64 million deficit by telling PAT that, "they should look to their own resources to come up with a solution." 

In response to the Governor's comments, PAT's Executive Director stated, "If this is a local problem why was there an executive order creating a transportation funding commission?" And he further argued that the problems could be fixed by changing the way Pennsylvania pays for transportation programs. Presumably, that means raising taxes or fees to generate additional funds for mass transit.  

Weighing in separately, the head of the transit workers union said, "The answers to solving the transit funding crisis lie in Harrisburg." Adding, "It is not a local issue as the good Governor has said."

Who is right? Clearly, the Governor is right in the sense that $64 million more in state funds is not the appropriate or reasonable answer to what ails PAT.  One of the biggest problems for PAT has been the willingness of previous governors to come up with last minute bailouts that have conditioned the unions and management to believe the state will somehow always find the money needed to fill budget gaps just before the spending cuts have to be made. And right on schedule the authority and transit supporters have gone into full lobbying mode to try to persuade or embarrass the Legislature and the Governor into abandoning their opposition and allocating the requested funds.  

While the Governor is undoubtedly correct in the view that more state funds are not the correct answer to PAT's shortfall, it is important to realize that because PAT is a state created entity operating under state laws, the Commonwealth has a vital interest in seeing the Authority carry out its mission of providing transit services as efficiently and as cost effectively as possible. As the situation currently stands PAT is simply incapable of serving the people of Allegheny County with efficient, cost effective bus service. It is saddled with enormous and growing legacy costs for retirees, extraordinarily generous wages and benefits for current workers and substantial debt service expenditures.

Earlier service reductions have improved ridership per bus trip but they have not cut into the factors driving overall costs ever higher. The Authority simply cannot survive without ever increasing state allocations to pay for a rising tide of benefits for people who are no longer working and providing service. It is patently unreasonable to force state taxpayers to pay endlessly to cover the costs of PAT's excessively generous contracts they had no say in negotiating.

Still, the state cannot sit idly by and watch labor contracts and promises made to retirees over the years cripple mass transit in Allegheny County, which is the almost certain outcome of the fiscal  path PAT has been traveling.  Several steps can be taken to ensure that costs can be driven down and that service is available to as many riders as possible.  But these steps require immediate action by the Governor and Legislature.

First, end PAT's monopoly over transit service in Allegheny County to allow regional transit agencies to offer service on routes where it makes economic sense and to allow private carriers to begin service on routes abandoned or severely cut back by PAT, all without having to ask PAT's permission. Second, end the right of public transit workers to strike-a major source of the massive problems now being faced by PAT. Third, amend state laws to allow PAT to declare bankruptcy to deal with its legacy cost problems. Fourth, require PAT to freeze hiring and begin a process of privatizing service as other transit agencies in the region and around the country have done with a goal of 50 percent outsourced in five years.  

Finally, to reduce the devastating amount of impending service reductions, the Commonwealth could offer, on a one time basis for fiscal 2012-2013, a dollar in additional funds for every dollar in immediate but permanent and irreversible costs cuts achieved though retiree and current employee concessions by July 2012. 

There are no easy ways out of this calamitously awful situation. But for the state government simply to cave in and hand over more money without serious changes at PAT would be foolhardy and would merely guarantee another round of even heavier lobbying and stalling for time next year.

In short, the Governor is right to stand firm against sending more money. However, the state does bear considerable responsibility for creating the circumstances under which PAT has careened its way into the condition it finds itself. And that means the state must grapple with the underlying causes of PAT's problems and work diligently to make the interests of transit users and taxpayers who provide the generous subsidies the highest priority-not the unions, not the management, not the vendors, not the Board.

Until that happens, the story of PAT will become more woeful and taxpayers will be saddled with a bigger and bigger load in return for no improvement in, or availability of, service. It is time to grasp the nettle and deal with this long running, seemingly intractable situation. 

A newspaper article over the weekend provided an in-depth and interesting take on what it means to homeowners who have their street split down the middle between two taxing jurisdictions.  In this case the purpose of pointing out the split is the looming reassessment in Allegheny County, with new values expected to take effect countywide in 2013, and Butler County, which has not reassessed since 1969 (that was the last year of a full reassessment, but the County did change its predetermined ratio [the ratio between assessed and market value] in 2009). 

Noting that home #1, within Allegheny County, pays more in taxes than home #2, who lives in Butler County (about $3,000 more), the Allegheny County Executive opined that by not reassessing for ten years "[Allegheny County] brought stability into the system, and people could predict what their taxes were going to be."  The Executive stopped short of saying that owners could predict their taxes would be "high". Stability and predictability were two themes the Supreme Court considered before tossing out Allegheny County's base year plan, uniformity trumping both.   

With two "real world" examples-the current assessments of both homes mentioned in the piece are available on the respective real estate websites for both Allegheny and Butler counties-we can see how the current millage rates (2012 for county and municipal, 2011-12 for schools) of each county and the municipality and the school district affect each home.  Keep in mind that neither property has been officially reassessed in some time (home #1 since 2002, home #2 since 1969) though home #1 should be getting a reassessment notice in the coming months. 

The Allegheny County home is paying $3,000 more in taxes as a result of a higher County tax bill ($464) and a higher school tax bill ($2,758).  The Butler County home is paying more to the municipality than their neighbor.  Both are paying more than 75% of their total tax bill to fund public education. 

So obviously the Butler County home, according to the County Executive, must be free from worry about their taxes.  A quick look back to 2005-that's when Allegheny County adopted its base year-shows that Butler County increased its taxes then cut them in 2009 after a change to the predetermined ratio; Cranberry increased its taxes this year, and Seneca Valley school district had increases in 2006, 2007, 2010 and 2011.  It is planning an increase for the coming school year according to its preliminary 2012-13 budget.

Just down the street in Allegheny County, home #1 will see a higher County tax bill this year as a result of the millage hike; his municipal taxes have not changed since 2005; and his school tax bill went up in 2010 and is expected to go up again according to the preliminary 2012-13 budget.  Home #1 might see a tax cut when rates rolled back once the windfall provisions are applied and the new values go into effect. 

Can we once and for all stop the talk that reassessments lead to tax increases?  There is enough hard evidence of tax increases happening without them to believe otherwise.