Mayor Fails $52 Question

Mayor Fails $52 Question

The Mayor of Pittsburgh was on a radio station today bemoaning the condition of the City’s roads and advocating for more money to pave nearly 900 miles of asphalt roads. The Mayor stated that commuters drive on the City’s roads and only pay $52 a year to work in the City through the Local Services Tax and that the tax should be increased and the resulting revenue would be dedicated to roads.

A few facts for the Mayor are in order. First, as we have pointed out time and again, non-residents pay more than the $52 LST; a good portion of the RAD sales tax goes to the City, and, if the drivers busting up the City’s roads are parking at a garage, lot, or meter they are paying the nation’s highest parking tax.

Second, a boost in the $52 tax would be a tax increase on City residents as well. The last time the state raised the tax from $10 to $52 they permitted every municipality in the state (except Philadelphia, which does not levy the tax) to raise it and would likely do the same if the idea were to get more than a moment’s notice in Harrisburg. And if for some strange reason the state permitted only Pittsburgh to raise the tax it would fall on City residents who work in the City (some of them might drive to work as well) since the tax is paid where the taxpayer works.

Lastly, on the idea that the proceeds would be put into a "lock box" for roads the state law already mandates that funds from the LST be used for police/fire/EMS, road construction/maintenance, and/or reduction of property taxes. The law does not allow it to be used for other purposes, so it is disingenuous for the Mayor to imply otherwise. Council attempted to dedicate LST money to pensions late last year before opting for the parking tax due to these statutory restrictions. Perhaps a detailed accounting of how the City has allocated the cumulative $100 million in LST money (from its increase in 2005 through 2011’s budget) would be helpful.

The City has decided to fund its capital needs on a pay-as-you-go basis without issuing new debt. That was seen as a necessary remedy for Pittsburgh, which has above-average debt on a per-capita basis. That means infrastructure improvement decisions are made with the same pot of money as pension benefits, money for workers’ compensation, the clerk’s office, etc.