Issue Summary (Updated May 2012)
Pittsburgh is committing a large share of its parking tax revenue to fund pensions through the next three decades.
What We Know:
Parking--and the City's parking tax--was a central part in the discussion over the City's troubled pension system in recent years. Under Act 44 of 2009, the City had to get its funded ratio (assets/liabilities) to 50% or better or turn its pension funds over to the state. The Mayor proposed entering into a long-term lease for the City's parking system in return for a lump sum up-front payment which would then be placed into the pension system's books to satisfy the state's requirement.
After a year of deliberations, City Council opted to not do the lease but instead pledged additional revenue to the pension system as a way to get the funding ratio improved. The City identified the parking tax as the source: $13 million annually through 2041. Combined with savings from the retirement of debt obligations the plan is to put a massive amount of cash to get the pensions into healthy shape.
The City has said that it plans to make up for the commitment of revenue by finding savings in its budget. At the same time, the City is relying on the independent Parking Authority to modernize meters, enforcement, and collection while increasing a payment to the City under a cooperation agreement.