Here, in a nutshell, is what continues to be wrong with Pittsburgh’s leaders:
Mayor Bill Peduto is hoping a tax increase will leverage city nonprofits to help fund an affordable housing program and universal preschool for city kids.
During his annual budget address this week, the mayor asked City Council for legislation that would increase the 4 percent realty transfer tax by a full percentage point to 5 percent.
Peduto says he’ll seek matching donations over a decade from the likes of Carnegie Mellon University, Highmark, Pitt and UPMC.
“It makes my job so much easier to say, ‘Look, this is what we’ve committed. Now I need you to commit to the same level or more,’” the mayor said.
But since when is raising the cost to live (and, by proxy, to do business) in Pittsburgh somehow attractive? As City Controller Michael Lamb told the Tribune-Review, such a tax would put the city at a competitive disadvantage. It would be “devastating,” he added.
Lamb says the mayor is “basically suggesting that (the) council should raise taxes to get more money from the nonprofits.” He called it “wrong-headed.”
And economically unsound. It remains this fundamental: The more you tax something, the less you get of it.
Incredibly, Peduto says such a tax hike would “show that we’re in the game.” And, just as incredibly, two of the nonprofits targeted, at least hint that they might be on board.
But they should be among the leaders advocating for the lowest tax burden possible to encourage economic growth, not a tax hike that surely will, coupled with other onerous taxes and regulations, work to retard it.
It was nearly 20 years ago that economist William Beach reminded that “When the tax system is used as a tool for producing certain economic and social outcomes … it becomes, perhaps by accident, the essential partner in expanding the scope and size of government.”
But the action of the Pittsburgh mayor is no accident. It is, however, economics ignorance, no matter how well intentioned it might be.
If Pittsburgh truly wants to “show that we’re in the game,” it should be working day and night to find ways to lower the tax burden, not increase it.
And that applies not only to its elected and appointed leaders but to those in the business and philanthropic community.
The Post-Gazette, reporting on the latest Pittsburgh Public Schools report card from A+ Schools, offers this:
“Sixty percent of seniors got grade-point averages that made them eligible for the Pittsburgh Promise scholarships.”
Given that students qualify with a GPA as low as 2.5, an average grade of C, it’s not much to brag about.
All due props to Sala Udin, a member of the city-county Sports & Exhibition Authority, for his lone “no” vote against the bum’s rush that was the SEA’s vote to approve that new deal with the Penguins for redevelopment of the old Civic Arena site.
Reminded Udin, in calling for a 30-day delay to garner public input:
“It’s different if you go to the public and say we have already agreed on these terms. It’s a done deal. That’s what makes people want to put their hair on fire. I think it would be a terrible mistake if we made a decision without opportunity for public consideration.
“I do think we owe (the public) the opportunity to see (the new agreement), to understand it, and to comment on it, and then we come back and make the best decision we can make,” he said.
That should have been a no-brainer. But Udin was shut down 6-1.
SEA board member James Ellenbogan offered that the public appeared to be more concerned about whether the Penguins beat the Blackhawks than about the redevelopment deal.
“I don’t think the public is engaged in this,” he said.
But the public can’t be interested in what it can’t see, now can it?
Colin McNickle is a senior fellow and media specialist at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).