Pittsburgh’s Time In Act 47 Ends
December 29, 2003 to February 12, 2018 puts Pittsburgh’s time in distressed status at just over 14 years. Only two municipalities (Clairton in Allegheny County and Milbourne in Delaware County) were in longer at the time of rescission, released after 27 and 21 years, respectively. Thirteen municipalities have been released from Act 47, and Pittsburgh is the 14th. By population it was the largest municipality in distressed status.
Pittsburgh was rejected for release in 2009 and 2012. In the time that the City has been in distressed status there were at least four other state statutes (separate from Act 47 of 1987) that significantly affected Pittsburgh’s finances and its time in distressed status.
Act 11 of 2004: Created the separate Intergovernmental Cooperation Authority for Cities of the Second Class to operate concurrently with the Act 47 recovery team. Prohibited Pittsburgh from levying a earned income tax on non-residents (commuter tax) while in Act 47 as long as the Authority was in place and intercepted the local share money from the Rivers Casino to direct it to specific purposes. The Authority was empowered with a much broader set of powers than the Act 47 recovery team but never issued bonds like the Intergovernmental Cooperation Authority in Philadelphia. Faced major problems in 2016 with its former executive director and its responsibilities, and is currently unfunded by the state and it is unclear what will happen to it with Act 47 gone today.
Act 187 of 2004: This shifted a portion of the earned income tax levied by the Pittsburgh Public Schools to the City so as to get the City more money without raising the combined wage tax rate (3% between the City and the District). It is possible that the District will come asking for a revision to this statute if the City has been given a clean bill of fiscal health.
Act 222 of 2004: Raised and renamed the occupation privilege tax (for all municipalities), ended the mercantile tax, phased out the business privilege tax, created the payroll preparation tax (just for Pittsburgh) and reduced the parking tax in steps from 50% to 35%.
Ac4 44 of 2009: Addressed municipal pensions statewide, but had specific provisions for Pittsburgh in order to get the aggregate funded ratio to 50% or greater by December 31, 2010 or face a takeover of the plans and a transfer to the state Municipal Retirement System. Most of 2010 was spent on a plan to lease parking garages and meters for an upfront payment to put into the pension plans, but that was scuttled in favor of a 30 year commitment of parking tax money. Law allowed the City to keep the parking tax at 37.5%.
And the Act 47 statute itself was amended in 2014 to put a time limit on how long municipalities could be in distressed status unless granted an extension by the coordinator or moved to the possibility of being non-viable and disincorporating. It also changed the criteria the Department of Community and Economic Development was to consider in determining whether a municipality was ready to be released. With Act 47 gone the Mayor in November of last year proposed four ordinances to codify some of the financial/budgetary practices of Act 47, and three of those four have been signed into law.