A major part of the City’s pension bailout plan hinges upon getting more money from the Parking Authority as a payment in lieu of taxes (PILOT). This year "Authority Payments", which count money from authorities in addition to the Parking Authority, total $11.4 million. Next year the amount is forecast at $20.1 million, an amount projected annually from the current five-year forecast.
A letter from a Councilman to the Mayor stated the Parking PILOT agreement "…currently gives the City $1.3 million dollars…This needs to increase to $2.6 million this year and $9.3 million in 2012 and beyond in order to cover the hole in the City’s budget from diverting parking tax revenue to the pension". Movement on that measure has effectively ground to a halt. The latest incident coming last week when a majority of the board voted against forming a panel to study how the Authority could raise revenue and dedicate some of it to the City. The panel idea was put forth by a board member who is also a City Council member and a proponent of the bailout plan. All of this serves as a way to examine what the proper relationship between the City and its authorities really should be.
The Controller’s CAFR notes that the cooperation agreement between the City and the Parking Authority dates back to February of 1995. It was amended five years later to increase the PILOT payment to where it currently is. That increase was 36%; the current proposal for 2011 to 2012 would be for a more than three fold increase. The payment is made, however, "…only upon the Parking Authority successfully meeting its debt service requirements". The Authority has outstanding debt of around $100 million.
Legislate in haste, repent at leisure. Recent developments indicate that axiom applies to the City’s budget, especially the New Years’ Eve plan aimed at avoiding a state takeover of pensions. The axiom’s admonition applies equally to the other parties involved in the unseemly last minute machinations.
Monday, December 21st marked the demise of the proposed tuition tax, also known as the “Post Secondary Education Privilege Tax” and the “Fair Share Tax”, as the City and the Pittsburgh college and university community reached an accord in which the Mayor and Council agreed to table the tax. But what has arisen in its stead brings a new set of very troubling concerns.
The tuition tax, also known as the "Post-Secondary Education Privilege Tax", also known as the "Fair Share Tax" has been put to rest after weeks of almost coming up for a vote before City Council only to be temporarily shelved time and again. All along proponents had the necessary five votes and an opinion from an attorney that the tax would stand up to a court challenge.
So what comes next? Obviously the City is determined to obtain $15 million to put toward pension costs. According to early news reports on the tax being tabled, there is a collation of universities and colleges, along with some of the City’s corporate interests, that will work toward getting "significant legislation in Harrisburg". What could it be? Certainly an increase in the $52 Local Services Tax-levied on everyone who works in the City-would not help many of the same college students targeted by the tuition tax since many have jobs. And a boost in that tax would certainly be enabled for all municipalities (except for Philadelphia) since that’s what happened just five years ago when the last pieces of "significant legislation" were crafted for Pittsburgh.
All of this smacks of the "don’t tax me, tax the fellow behind the tree" mentality on the part of the college community-they won’t see a tuition tax, but would be perfectly fine with enabling a new or higher tax instead of holding the City accountable for its continued growth in expenditures in recent and coming years.
And what makes this coalition think that legislators would be agreeable to help? Just a few short months ago the City was a big part of the collapse of the initial plan for municipal pension reform (the City wanted exempted so as to pursue the parking garage lease plan). Now the "heavy hitters" want to return to the Capitol to pursue a new a pension solution? Good luck with that. What other revenue sources can there be? The City has obtained the RAD sales tax, payroll tax, casino money, etc. They need to take a much more hard line approach to their costs.