Merry Christmas

The staff of the Allegheny Institute wish our readers a peaceful, joyous and safe holiday season.

From the Book of Luke:

And there were in the same country shepherds abiding

in the field, keeping watch over their flock by night.

 

And, lo, the angel of the Lord came upon them,

and the glory of the Lord shone round about them:

and they were sore afraid.

 

And the angel said unto them, Fear not: for, behold,

I bring you good tidings of great joy,

which shall be to all people.

 

For unto you is born this day in the city of David a Saviour,

which is Christ the Lord.

 

And this shall be a sign unto you; Ye shall find the babe

wrapped in swaddling clothes, lying in a manger.

 

And suddenly there was with the angel a multitude of the

heavenly host praising God, and saying,

 

Glory to God in the highest, and on earth peace,

good will toward men.

 

Merry Christmas and a happy and prosperous 2019 from all of us at the Allegheny Institute.

 

Another dusk before Christmas

There comes a time on Christmas Eve when something extraordinary happens. Above and beyond what already makes this day so phenomenal, that is. That “something” is the first hint of dusk.

And though we each experience it in different locales, and some of the details obviously vary, there is a constancy in the experience that is peaceful to the core. As long as we open our eyes to it, that is, to take a moment to partake of it.

I experienced this grand snapshot in time for the first 21 years of my life in the countryside of Southeastern Ohio. Then, for nearly 30 years, in suburban Pittsburgh. These days, I do so in a place I’ve come to love, not far from the childhood abode, in a place I’ve dubbed Jones Mountain in the Northern Panhandle of West Virginia.

So, sit back with your favorite holiday libation or other treat as the blank canvass is painted with another dusk before Christmas.

The last-minute shopping is done. Some of the cats are lounging on various beds and overstuffed chairs. Others are out for the count in the basement on two sets of summer furniture cushions placed in front of floor-to-ceiling windows. This time next year, there will be a new and large stone fireplace to warm all their slumbers.

Through those windows, by the way, they can see the stack of ash and apple wood that, once split and fully seasoned, will help warm their purrs for Christmas 2019. More wood will follow.

The buffalo chicken dip, deviled eggs and other goodies are chilling in various fridges. So, too, are two plum puddings received just this week, air-express from England. The latter will be the perfect dessert to cap the perfect feast of roast turkey with all the fixin’s at brother Shannon’s the next day.

On this late afternoon prelude to a journey over the hills and through the dales to a Christmas Eve gathering at brother Scott’s, the traditional roast beast, seared crispy brown on the outside and tantalizingly medium rare on the inside, has been devoured. As have been the traditional “1:4” mashed potatoes (that ratio representing one-part potatoes to four-parts butter).

And in what surely must be a universal and timeless act of holiday stealth, somebody’s sneaking a dip of the extra homemade dinner rolls into the boat of what’s left of the wine gravy, simmered with painstaking slowness.

“Shoot!”  that somebody blurts out, realizing an incriminating trail of gravy drips will have to be cleaned up post-haste to thwart discovery.

Outside, some of the junior illumination engineers in the neighborhood are a tad switch-happy — a mixture of white and multi-colored lights on the boughs and buntings of their door surrounds already are on.

Across the way, the window wreaths already are illuminated by small spotlights. Window candles, those beacons to weary travelers (i.e. Mary and Joseph looking for a suitable shelter to welcome the birth of the Christ child) are glowing as well.

But some of the neighborhood’s outside Christmas lights remain off. Perhaps, just perhaps, these neighbors know too the majesty of this very special moment.

Back inside, the tall and fat evergreen glows softly as its lights show off precious family decorations, many old and some new; some purchased during overseas travels, many secured here and there but nowhere necessarily special.

And the same small light bulb that brightened the “Nativity scene,” as it was known in childhood, now spotlights the old Stone & Thomas Department Store figurines in a stable made of cut branches by paternal grandfather “Pop” in the middle of the last century.

My, how time flies.

The days of listening to old Christmas songs – lightly snapping, crackling and popping on a turntable with a dime on the tone arm to prevent skipping – are long gone. The old tunes still are played, of course, but these days they are conveyed through a high-tech Internet radio, live from studios just about anywhere in the world.

On this day of days soon to become that night of nights, Der Bingle & Co. are coming from an Irish broadcast that raises money each year for the less-fortunate among us.

My, how small the world has become.

The cats now have stirred, sensing that the day turning long is something different. They’re not sure why but they feel a growing reverence in the air. And out of respect for that, they appear to have put aside any ambushing, chasing and hissing, albeit temporarily.

In fact, two of them – Wyeth and Oreo – can be seen sitting side by side at the front storm door partaking of the arriving magic.

As wondrously simple and tranquil as all this inside “activity” is, something of a minuet has begun to unfold outside as the dusk draws nigh.

Follow the deer tracks, not in any snow but in a soggy mountain foothill, and you’ll soon come upon a group feeding at the tree line of the leafless wood.  They’ve found the remnants of a buckwheat patch planted in the summer to bribe them away from the gardens.

From time to time, sensing they’re being observed, they pause to turn their heads, carefully watching for danger, if not a human handout. Sent a nod and wink by their potential human benefactors, they soon know they have nothing to dread.

Some squirrels are quenching their thirst in a mini-pond regularly replenished by a drainpipe carrying away this year’s plentiful rains. A stray bluebird, odd to see this time of the year, makes careful sorties in and out of the water, watched curiously by a pair of cardinals (indeed a true couple, what with one colored brilliant and the other muted) high in a bare tulip poplar.

And a fox, who newly revealed himself just a few weeks ago, thinks he’s concealed in the waning daylight at the wood’s corner. Ever the opportunist, he’s trying to determine if there’s something in any of this for him. Disappointed, his silhouette slides further into the waxing darkness; he’ll slink back into the picture soon enough.

But, set now is the sun.

Subtle are the winds.

Sweet is the smell of the crisp air.

It now is being punctuated by the scent from several fireplaces. Their tenders are stoking them for the early evening burn, a wonderful mix, the prevailing breeze confirms, of locust, cherry and something that hints of a musky oak.

Soon enough, the proverbial “Ma’s” in their “kerchiefs” and “Pa’s” in their night “caps” will settle in for the first of many “long winter naps” atop this windy outpost.

Then, one by one, the rest of the neighborhoods’ Christmas lights flick on.

The dusk before Christmas suddenly is gone. But as one wonderful moment ends, another begins.  And Christmas has come to Jones Mountain once again.

Silent night.

Holy night.

All is calm.

All is bright.

“The time draws near the birth of Christ,” reminded Tennyson. “The moon is hid; the night is still; The Christmas bells from hill to hill; Answer each other in the mist.”

Merry Christmas, every one.

Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).

 

Disappointing PSSA results for 2018

Summary: Pennsylvania has its third through eighth graders take Pennsylvania System of School Assessment (PSSA) tests annually. These tests are designed to assess academic achievement in three areas—math and language arts, as well as science, in fourth and eighth grades. Eleventh graders for the last few years have taken the Keystone exams in math, literature, and science rather than PSSA tests.  This Brief focuses on the PSSA scores.

____________________________________________________________________

2018 scores for the state have been posted.  Student achievement is assigned to one of four levels: below basic, basic, proficient and advanced. Of course, the desired level is proficient or advanced. Advanced recognizes the student’s achievement to be above, or well above, the level necessary to move up to the next grade.  A proficient rating means the student has a grade-level mastery of the subject adequate to move on to the next grade. Basic means the student has some understanding but not sufficient to move on without remedial help. Below basic means the student has little or no grasp of the subject matter taught in that grade.

Suffice to say, the 2018 results are not encouraging.  First of all, the percentage of students scoring advanced or proficient in math fell slightly from the 2017 level in grades three, four, six and eight. The percentage advanced or proficient edged a bit higher in fifth and seventh grades. Only in third grade did more than half of students score proficient or higher, 54.5 percent in 2017 and 54.1 percent in 2018. That means that for every other grade the combined percentage of basic or below basic is above 50 percent.

The worst of the findings in the PSSA results is the sharp decline in scores with each higher grade in both 2017 and 2018. In 2018, the third grade combined basic and below basic percentage was 45.9. By sixth grade that combined percentage climbed to 60.5 percent and by eighth grade reached 69 percent.

English language arts scores tend to run higher than the math scores but remain well below levels the state should find acceptable. About 40 percent of students in each grade from third to eighth scored in the combined basic and below basic categories. And while better than the near 60 percent scoring basic or below basic in math in all grades but the third, 40 percent falling behind in third through eighth grades is a huge problem, especially for the high percentages of eighth graders who will be entering high school unprepared for ninth grade in math and English language arts.

Moreover, with only 53 percent of eighth graders scoring proficient or higher in the science portion of the exam, the inadequacy of preparation for high school is even more pronounced.

A very interesting statistic is found in the Education Department’s PSSA results report.  750,302 third through eighth grade students were tested in 2018. Of that number 414,495 are classified as historically underperforming. That means they are either economically disadvantaged, English learners or have an individualized education plan. A student falling into more than one of those categories is counted just once.

What an amazing statistic—55.2 percent of elementary school test takers are classified as historically underperforming (HU). It is stunning to contemplate that well over half of Pennsylvania elementary students are in the HU classification. One would assume that the bulk of these children are in the HU grouping because of economics. But that begs the question of how poor does a child’s family have to be to qualify as disadvantaged. And given that school and transport, and in many cases breakfasts and lunches, are free, it must be that the category is trying to capture something else that is detrimental to learning.

And as it happens, the HU students as categorized by the Education Department do underperform the average of all students; indeed they bring down the all-student average.  The underperformance occurs in all three subjects tested—math, English and science.  For example, in math 47 percent of the HU students in third through eighth grades scored below basic while the all-student average was 31.9 percent. Likewise the HU students had a much lower percentage of advanced or proficient at 25.2 percent compared to 42 percent for the all-student average. Using the state’s data for the average and HU student scores for the proficient or higher rating of third through eighth students, the scoring percentage for the non-HU students can be calculated. In math, those students would have had a combined proficient and advanced percentage of 62.7

And while the numbers for science and English are better, overall the pattern of HU students falling well short of the average scores is maintained.

How is it that “historically underperforming” seems to have a great impact on learning but not sports performance?  In 2017 Aliquippa’s 11th graders (59 test takers) performed poorly on math with 71 percent basic or below basic and only 27 percent proficient. And remember that the math test is on Algebra I which can be taken just before the exam. In science these students had 83 percent score basic or below basic.  Note that of the 59 test takers, 58 are classified as historically underperforming. Yet despite the inability of the vast majority of students to show meaningful academic achievement, the football team just won its 17th WPIAL championship in its division and another state title. Does this mean poor children cannot learn math or science but they can master a complex and demanding sport? Priorities appear to be misplaced.

Indeed, are there no academic requirements to play sports?

Pennsylvania needs to get over its excuse-making for poor academic performance, especially considering the sums spent on remedial education and other special programs aimed at improving quality of education.

Combatting the region’s ‘delusive sophisms’

Public officials, elected and appointed, have had a tough year ‘round these parts in their prosecution of “public policy” that all too often disrespected the public and gave policy a bad name.

But the truly tragic part of all this is that the public has been disrespected for so long, and that dubious policy prescriptions have been foisted on them for just as long, that it has become inured to most of it.

Take, for instance, the ballyhooed multibillion-dollar bid to lure Amazon to Greater Pittsburgh. As bad as the precept of underwriting one of the world’s richest concerns with public dollars is, far worse was the subterfuge employed by public officials to keep details of the package hidden from those who would foot the bill.

So antithetical was the behavior to open government and sound public policy that a judge even accused the principals of using the Allegheny Conference on Community Development to establish a shell entity to “launder” the proposal out of public view.

Yet, there are no real repercussions for those who eschew sunshine and operate the laundry. They are free to launder again, and again, with impunity.

Then there’s the textbook case at the Allegheny County Airport Authority of how government interventionism is the lie that keeps on giving – and requiring successive interventions to cover up the failures – the lies — of past interventions. The practice of blindly throwing public dollars at airlines with questionable financial wherewithal has morphed into subsidizing airlines at Pittsburgh International Airport to kill off other subsidized airlines.

Some public officials have blamed the vagaries of the marketplace – the “shakeout” going on in the airline industry – for subsidized failure after subsidized failure. Never mind that free markets require honest failures to have successes. Never mind that government interventions so pervert the markets that their functions are so skewed that just about everyone becomes a loser.

Yet such behavior continues in Greater Pittsburgh. It long has been the norm instead of the exception. “It’s the way business is done,” we are told, ad nauseum, by those, who through their market-perverting behaviors, prove repeatedly they know neither sound business practices nor what truly sound public policies are.

But as Arthur Goddard wrote long ago in the preface to French economist Frederic Bastiat’s “Economic Sophisms”:

“The public has been despoiled of a great part of its wealth and has been induced to give up more and more of its freedom of choice because it is unable to detect the error in the delusive sophisms” that “exploit its gullibility and its ignorance of economics.”

Indeed, shame on the exploiters in Pittsburgh and Allegheny County. But shame on the public that, knowing no better, so subserviently succumbs to the notion that the proper role of government is to attempt to command the economy, never mind the repeated examples of predictable failure.

And, in typical fashion, as Bastiat himself wrote:

“Yes, we must admit that our opponents in this argument have a marked advantage over us. They need only a few words to set forth a half-truth; whereas, in order to show that it is a half-truth, we have to resort to long and arid dissertations.”

This is what the legacy-seeking pols practice. And this is what a more engaged public must work harder to counteract. Governments at any level don’t exist to “create” or “command” markets.  They exist to protect them by not facilitating their demise.

But as the late great economics author Henry Hazlitt also cautioned:

“It does no good for (the fundamental principles of economics) to be discovered unless they are applied, and they will not be applied unless they are widely understood.”

That must apply to government policy makers and the public that pays for these policies in equal measure.

Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).

 

 

Odd conclusion from performance audit

This past week the state Auditor General’s office released its mandated quadrennial performance audit of the Port Authority of Allegheny County. The audit covered the period from Jan. 1, 2016, to Dec. 31, 2017.

The audit focused on the mass transit agency’s hiring procedures (in the time period 330 new hires were added to bring the total headcount to 2,533 at the end of 2017) and how new service requests are processed. It also measured performance of bus and light rail operations measured by

1. on time performance,
2. percentage of time vehicles are in service,
3. and passengers per revenue hour

The audit looked at four peer agencies (Cleveland, Baltimore, Minneapolis and St. Louis) that have been used previously by the Port Authority and the Pennsylvania Department of Transportation to measure performance. On time arrival for buses, which the Port Authority defines as a vehicle arriving from one minute ahead to five minutes behind the time listed on the schedule (but defined differently by peer agencies) was found to be improving but still lagging at 67 percent in the two-year span.

In 2016, vehicle in service time was 85 percent for buses (the peer average was 90 percent) which the authority attributed to the locations of two bus garages and language in the collective bargaining agreement with the Amalgamated Transit Union on meal breaks. On passengers per revenue hour, the Port Authority ranked second behind Baltimore with 33.8 on buses and third behind St. Louis and Minneapolis on light rail with 47.7 passengers per hour. To improve where lacking, the audit recommends a renegotiation of the collective bargaining provisions when the current labor contract expires (2020) and possibly looking at different locations for garages to reduce time out of service.

In presenting the findings the Auditor General stated that fares should not rise and that “it’s critical that Harrisburg make greater investments.” In the fiscal years since the end of FY 2013-14, state operating assistance for the Port Authority has risen from $177.6 million to $224.9 million (26 percent) due to Act 89. That is a significant increase.  But due to the Authority’s costs, even if the Auditor General put a specific number to his suggestion it would probably not be enough.

What is interesting is that the audit did not measure cost-effectiveness in comparison with the peer agencies that were utilized in other parts of the audit. 2017 numbers from the National Transit Database on bus expenses per revenue hour, a statistic highlighted in a Policy Brief this year, show that the Port Authority is higher (by 30 percent) than the other agencies. So why would the opinion that more money, specifically from the state, be made rather than asking why the Port Authority was higher on such a critical indicator?

The Airport Authority’s due diligence crisis

Word that discount carrier WOW Airlines is slashing its fleet of jets nearly in half and laying off more than 100 employees in a major restructuring yet again raise serious questions about how the Allegheny County Airport Authority is operating.

WOW is three-quarters of the way through a two-year deal at Pittsburgh International Airport (PIT) that pays it a total of $800,000, public money coming from those hardly discerning almsgivers at the state Department of Community and Economic Development.

But touted as a major coup for the airport, the airline now is struggling to survive.

Spurned by one potential rescuer (Icelandair) but thrown a life line by another (Frontier Airlines parent Indigo Partners), WOW has slashed its Airbus fleet from 20 to 11 and will lay off 111 employees.

Bookings have been halted past mid-January. Which raises questions about PIT being part of WOW’s future plans. One traveler tells the Post-Gazette that his mid-January flight was canceled and that rebooking was not an option. WOW, in a statement, said contractors and short-term staff “will not be renewed for the time-being.”

It sounds as if the bell is tolling for WOW in Pittsburgh, if not a number of other markets. If not for WOW itself.

Which makes the pronouncements of November 2016, when the WOW deal was announced, all the more embarrassing.

Christina Cassotis, the Airport Authority’s CEO, called the deal an “investment that will pay off.”

Question: If WOW permanently suspends Pittsburgh services, is there a clawback provision in the contract that, if all of that $800,000 already has been given, pro-rates what WOW must return to the public kitty?

That appears not to have been the case with OneJet, involuntarily sent by creditors into Chapter 7 liquidation. Pre-bankruptcy, the Airport Authority was forced to file a lawsuit in an attempt to recover the lion’s share of its $1 million gift.

Back to November 2016. An airline consultant told the P-G that such subsidies are a way “to bring (airlines) along and mitigate their risk.”

By exposing the public to a risk that only these airlines should bear. The risk to the public be damned, right?

Said a travel agent of the WOW deal, quoted then in the same story: “This is magical.”

Sorry, but as the predictable failures of publicly subsidized air travel and cargo service at PIT are exposed, airline by airline, that “magic” is primarily smoke and mirrors and government-enabled hocus-pocus.

Which brings us back to the Airport Authority and Cassotis and questions repeatedly posed and worth asking anew. To wit:

The authority board gave Cassotis plenary power to grant these airlines subsidies of any amount. Where’s the check and balance?

Oh, of course, silly us – until recently at least three members of the authority had been investors in at least one of the subsidized failures (OneJet). And two of those board members have been named in a lawsuit filed by OneJet investors.

What a convoluted and conflicted mess.

And what kind of due diligence is done to thoroughly vet subsidized airlines for their financial wherewithal? The vetting of OneJet was a bad joke. What kind of vetting did WOW get? Surely a discount carrier that is expanding rapidly should be scrutinized extra carefully, yes?

What’s the process? Who’s does the vetting? Is there a process? Is there any vetting? Or does the authority CEO simply keep a giant rubber stamp hanging from a desk lamp to get the job done?

Said Cassotis in November 2016 of the WOW deal: “This is huge. … And I promise it’s just the beginning.”

More’s the pity. And all the more reason for the state Attorney General’s Office, which, by statute, has auditing power over the Airport Authority, to step in.

As embarrassing as these failures have been, it would be even more embarrassing to do nothing about them.

Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).

Airport Authority ‘uh-ohs’ & debunking an acolyte

The Allegheny County Airport Authority has unveiled development plans for a 195-acre tract overlooking Pittsburgh International Airport (PIT). But questions abound.

The same authority that posted an embarrassing record in 2018 attempting – and, predictably, failing — to command the air-services marketplace with public money now is touting something it calls an “innovation campus” at the Findlay Township site.

As the Post-Gazette’s Mark Belko describes it, it “could house offices, research and development labs and industrial manufacturing facilities – all built around a town center with restaurants and retail.”

Uh-oh.

There’s even talk of a light-rail link.

Uh-oh.

Airport Authority CEO Christina Cassotis told the newspaper her agency will be working on a strategy to attract companies to the “campus.”

Uh-oh.

Added Allegheny County Chief Executive Rich Fitzgerald, announcing the plan on Dec. 6, “Today is about economic vitality and about jobs.”

Uh-oh.

Added Dennis Davin, the former county development chief who now heads the state Department of Community and Economic Development, “This is something I think can be transformational.”

Uh-oh.

So what are all these “uh-ohs” about?

Well, given the government’s history of touting its development schemes as the best thing since sliced bread and soft butter, the immediate questions that comes to mind are these:

How much public money is going to be dangled over and/or thrown at this latest government central plan?

Will public dollars – i.e. from shale gas drilling and gambling proceeds – be offered?

And then will Airport Authority officials rationalize the corporate wealthfare as “not coming from taxpayers”?

Will tax-increment financing (TIF) be employed, never mind that TIF is a poor use of such an “incentive,” given retail’s insignificant multiplier effect and cyclical nature?

Light-rail? Really? Talk about a boondoggle in the making that might just dwarf the boondoggle that is the North Shore Connector.

Of course, if PIT’s “innovation campus” really is the be-all and end-all that government types insist it will be, here’s a novel idea:

Let those who want to be a part of it invest their own money in pursuit of profit.

But to the usual suspects that’s archaic thinking, if not old-school economics, by which they simply cannot abide. Of course, that’s the kind of mindset propagated by central planners and command economists who are all too willing to turn public dollars into a venture capital kitty.

Speaking of the Airport Authority, acolytes for bad economics continue to defend the authority’s practice of subsidizing airlines with public dollars, a practice that has, predictably, failed spectacularly in 2018 at PIT.

Writes one regular defender of the subsidies, responding to an Allegheny Institute commentary of the market-perverting practice in the Tribune-Review:

“The British Airways flight will only cost $3 million in incentives over two years but will generate $57 million per year,” the writer claimed.

But that claim is farcical, as Jake Haulk, the institute’s president-emeritus and senior advisor, wrote in Policy Brief Vol. 18, No. 31, this past August.

In fact, Haulk, a Ph.D. economist poked so many holes in the study touted by the Airport Authority – from a dubious methodology to making conclusions not supported by reality –that it wouldn’t even qualify as Swiss cheese.

The same writer takes issue with the institute’s contention that public dollars are being used to pay airline subsidies:

“They come from casino revenue and natural gas drilling revenue from airport land,” he says. But that clearly is public money. And it’s being pledged and allocated by a public authority.

The writer further touts that Qatar Airways, the cargo carrier that shook down public coffers for $1.48 million – and was incentivized by contract to fail — now is operating subsidy-free at Pittsburgh International. Never mind that officials are discussing future subsidies.

Then there is the writer’s defense of Delta Air Lines’ suspended Paris flights. He barks at how Delta operated for eight years “subsidy-free” after the Allegheny Conference on Community Development pulled its subsidy.

Conveniently not mentioned is that the Delta reduced those regular flights to seasonal when the subsidy ran out and, when the Airport Authority announced the multimillion-dollar subsidy for British Airways, a direct international competitor, Delta said it would pull out of PIT.

Sad to say, the facts are such the inconvenient thing for the Trib commentator.

Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).

 

As one ICA forms, another waits to dissolve

Summary: Act 124 of 2018 creates an Intergovernmental Cooperation Authority (ICA) for the City of Harrisburg and allows the city to keep two higher tax rates in place for a limited period of time. While this legislation came together rather quickly, a separate bill to dissolve Pittsburgh’s ICA languished.

This fall it appeared that the City of Harrisburg was set to spend three more years under the supervision of an Act 47 coordinator until it exited distressed status in 2021.

Instead the city will leave Act 47 and come under the supervision of an ICA patterned on the ones in Philadelphia and Pittsburgh. Once a cooperation agreement is signed between Harrisburg and the ICA, its financial distress declaration will be rescinded. However, the city’s ability to levy tax rates only afforded to municipalities under Act 47 will remain in place until the termination date of the ICA, which would be at the end of 2023 assuming the parties act on the agreement in the coming year.

This change came about from legislation introduced at the beginning of October and signed into law a few weeks later as Act 124. Though the act authorizes an ICA for cities of the third class, of which there are 53, only Harrisburg meets the act’s highly specific definition of “city” as one with a population between 48,000 and 55,000 that has been released from receivership and has or had an Act 47 coordinator.

The ICA will be steered by five members appointed by the governor and legislative leaders. They will be tasked with improving the financial condition of the city. The appointees are to have a background in finance or management and either be city residents or have a business or be employed in the city. An appropriation of $100,000 from the general fund will cover this year’s operations, which is $56,000 more than the state was spending on the Act 47 coordinator, according to a fiscal note on the legislation. There will be no dual (sometimes dueling) financial overseers as was the case with Pittsburgh.

The ICA will possess general as well as specific powers (32 in all) to examine consolidations, staffing levels, shared services, pensions and collective bargaining agreements. It can hire an executive director, contract with consultants, maintain a website and must file annual reports and audits with state officials. Hopefully fulfilling the annual ICA reporting requirement will not slip through the cracks as happened in Pittsburgh. Then, too, it must approve a five-year financial plan each year that accounts for the city’s revenues and expenditures, including how to phase-out the special taxes.

Normally, Harrisburg would be able to levy a 0.5 percent earned income tax on city residents and a $52 local services tax on everyone working in the city. But under Act 47 the city was able to seek court approval to levy an additional 1.0 percent on the earned income tax and triple the local services tax to $156. These taxes are expected to raise $12 million in 2018, close to 20 percent of Harrisburg’s total revenue. The enabling legislation does prohibit Harrisburg from levying an earned income tax on non-residents. Unless the city adopts home rule the tax levies will revert to the normal rates upon the ICA termination date.

Given the very short life span for the authority, the city will need to be thinking ahead a few years as to whether a new plan might arise that allows the taxes and the ICA to remain in place for a longer period of time. Harrisburg could become dependent on the higher tax rates and legislators could be sympathetic and extend the ICA and accompanying extraordinary taxing privileges.

It could happen. Authorities sometimes stay in place after outliving their purpose. Consider the ICA for Pittsburgh. It is still in existence despite the fact that it has no money nor does it expect any further allocation from the state. It has asked to be dissolved and legislation to do that was introduced in the General Assembly.

The state last appropriated funds for the ICA in the 2016-17 fiscal year. To get by this year the ICA requested and received $37,000 from the city. With no money appropriated in the current state budget, it seems there was a genuine interest by the General Assembly to dissolve the ICA.

In November 2017 recovery coordinators recommended that Pittsburgh be released from Act 47. Since the ICA’s term of existence allowed for dissolution upon Act 47 rescission or June 30, 2019, whichever came later, the board passed a resolution requesting the General Assembly to amend the language to allow it to dissolve along with Act 47.

When Pittsburgh’s distressed status was officially lifted in February, legislation allowing for immediate ICA termination was introduced. Instead of quick action the legislation remained in the Senate from February until it was passed in June. It then went to a House committee where it was not acted upon by the end of the legislative session. That was surprising for what seemed like a straightforward proposal.

Yet Pittsburgh’s ICA remains in place with not much to do and no money do it. The board did not even meet when the city’s 2019 budget was submitted to them. Due to language in the ICA statute, the budget was deemed approved after 30 days from when it was submitted. Will this go on until June 30? It will be interesting to see if board members stay in place or choose to resign from what is an inactive authority. They would be justified in taking that action at this point.

Around the public policy horn …

Pittsburgh Mayor Bill Peduto has been in Poland this week, representing U.S. mayors at the United Nations’ annual climate change conference.

He’s of course a big advocate for supposed remedies to address the issue. Never mind that such “solutions” invariably have a dubious cost-to-benefit relationship. That is, the cost so outpaces the benefits that the touted cure is worse than the claimed disease.

In Pittsburgh, Peduto’s plan revolves around city operations that, by 2030, are to use 100 percent renewable energy; a fossil fuel-free vehicle fleet and ancillary disinvestment in fossil fuel companies; and a 50 percent reduction in overall energy and water usage and transportation emissions.

Again, at what cost? Again, at what benefit? High and marginal, respectively, it would seem.

Peduto’s trip comes on the heels of the release of an updated draft plan to cut carbon emissions statewide. Strategies include requiring more solar and wind power coming onto the grid (likely heavily “incentivized,”aka subsidized by tax dollars), a transition to electric vehicles (again, likely subsidized) and cutting home and business electricity usage.

Backers lament that such efforts could be for naught given that emissions from the growth in transportation, natural gas production and waste are expected to rise over the next 30 years.

What draconian, economic growth-arresting steps next will be advocated to offset that growth are anybody’s guess. But the concept of “cap and trade” looms large.

As the Post-Gazette recently characterized it, cap-and-trade “is a market-based approach that both sets a shrinking limit on how much pollution can be released and offers economic incentives for companies to make further reductions and to earn valuable allowances they can sell to others.”

Never mind that a government-created market is an oxymoron. As the Capital Research Center recently reminded:

“The tax can only be called ‘free market’ in the sense that it sets up a phony market based around a kind of commodity – carbon dioxide emissions – and forces companies to work within it or face heavy fines from the federal government.”

Not only is it a perversion of free markets, critics cringe at how it directly assaults U.S. manufacturing and competitiveness and is nothing more than the latest attempt at wealth redistribution.

That’s hardly sound public policy.

In a rare spate of common sense, Pittsburgh City Council is refusing to fast-track legislation from the Peduto administration to spend up to $100,000 to better “brand” city services.

As the Post-Gazette reports it, one councilor doesn’t think “branding” should be any kind of priority in a city not long – less than a year — out of state financial oversight.

Another flat out called it a waste of money.

Still another council member said expending $100,000 for re-branding – and that would be just for the concept and no implementation – would involve spending “a significant amount of money for what we think is going to be a little return.”

So, why spend the money? A mayoral spokesman says “Pittsburgh is growing” and says it’s “getting an international reputation.”

But the reality is the city continues to shrink, at least in population.

And one can only wonder what that “international reputation is,” what with its perennially underperforming public schools; its out-of-whack public transit (bus) cost structure; its market-perverting subsidies to airlines; the equally perennial failure to reassess property for taxation purposes (a political practice that has only exacerbated inequities in the taxation regimen) and slavish devotion to economic “development” practices that too often retard true economic growth instead of enable it.

Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).

 

Long road ahead in school funding case

A trial in the case of William Penn School District v. Pennsylvania Department of Education has been tentatively scheduled for the summer of 2020.  A lawsuit over K-12 school funding provided by the state was filed by six school districts and several statewide associations in 2014.

As we noted in a Policy Brief last year, Commonwealth Court dismissed the case in April 2015 upon which it was appealed to the state Supreme Court.  Last fall that court ordered the case back to Commonwealth Court for plaintiffs “to substantiate and elucidate the classification at issue and to establish the nature of the right to education, if any” which could possibly set up a judicial-legislative conflict over determining state subsidies for K-12 education.

According to the docket sheet for the case, fact discovery is to be completed by October 2019, responses, motions and replies by March 2020 and then the trial scheduled for sometime in the summer of that year.

We noted in the 2017 Brief that the process will be “messy, drawn-out and expensive” and with the tentative schedule there is at least an idea of just how drawn out it will be. Parties to the case could spend months diving into the issue of the state and local funding mix and how that produces different per-pupil funding levels.  Even with the tentative date there has to be time for the court to deliberate and there possibly could be a return trip to the Supreme Court depending on the verdict.

If the Commonwealth Court decision comes in 2021, by that point six, possibly seven, years of newly appropriated basic education funding will likely have been distributed through the student weighted funding formula enacted by the General Assembly in Act 35 of 2016.  That formula has been pointed to by legislative defendants named in the case as proof the state has made strides in addressing the claims of petitioners.

With a decision that might eventually order equalized spending across 500 districts there would have to be significant reductions for districts that raise revenue above the state average, largely arising from local property taxes.