So Much for Authority Independence

Municipal authorities were purportedly created in part to do things regular governments cannot do and to assume certain financial and operational functions. In Pittsburgh, we have the water and sewer authority, the parking authority, the housing authority, the redevelopment authority, etc. These authorities are governed by a board that is appointed by the Mayor and approved by the City Council. Within the state’s statutes governing the authority and the authority’s own charter and by-laws, the board presumably has the responsibility and freedom to make the big decisions for the authority.

Generally speaking the board is supposedly independent of political pressures. Of course, board members who continually run afoul of the Mayor’s wishes could be asked to resign or not be re-appointed. Certainly, the City Council should not be stepping into manage the affairs of any authority. That is a prescription for turmoil.

Now comes Councilman Shields saying, "The [Urban Redevelopment Authority] can’t even breathe a breath without the consent and authorization of this body"-referring to Council. He went on to say that he would do unimaginable things to the URA if it did not comply with the prevailing wage bill Council is getting ready to pass.

So, in Pittsburgh, what is it? Are authorities independent or are they lackeys of City Council? Apparently, a new era of Council hegemony just dawned in Pittsburgh.

Mayor Vetoes Terrible Bill

In a moment of economic lucidity, Pittsburgh’s Mayor on December 31 vetoed the so called "prevailing wage" bill Council passed in the waning days of 2009. The late veto made it impossible for Council to put together the votes needed to overturn the veto.

The legislation, a last minute Christmas gift to labor unions, was passed on December 21. That opened the opportunity for the Mayor to veto the bill on the last day of the year. One wonders about the Council’s rush to pass the bill in the last few days with the very real threat of a last minute veto hanging over the process. Was all this carefully choreographed as a Council sop to the unions that was never meant to be put into effect? We will know if Council revives the bill in 2010 and overturns another veto.

The bottom line is the prevailing wage bill was terrible legislation and the Mayor’s reasons for vetoing it were extremely logical. It would have made Pittsburgh even less competitive for attracting companies and investment into the City by aggressively interfering in the market’s ability to set wages through supply and demand.

More devastating, it would have sent yet another signal to the local, national and global business communities that Pittsburgh is slipping deeper into an anti-free market, statist approach to public policy.

We can only hope this poorly thought out and insidious bill never sees the light of day again.

Pittsburgh Prevailing Wage: Union Power Play

Pittsburgh’s Councilman Shields will propose a prevailing wage bill that is expected to mandate that employees at businesses with a City contract or receiving any City subsidy be compensated the same as City employees doing the same job.

Since City employees other than managers are likely to be union members, the compensation requirement would effectively unionize all newly covered workers in terms of pay and benefits. But unless they are union members they will not have a contract covering work rules and they will not have to pay dues. Thus, the non-union workers covered by prevailing wage would receive the benefits without the union dues cost.

If the employees covered by the prevailing wage are union members but are earning less than City workers, the new law will in effect supersede collective bargaining agreements. And we have been told for years those agreements are sacrosanct. That appears not to be the case if the government decides to force the company to pay more than the negotiated contract calls for.

In the case of the non-union workers getting union pay and benefits, the question must be asked: Why would unions support the proposed bill? Why not simply ask that Council require the workers on City contracts or on projects getting a subsidy join the union? Legally, that might be hard to enforce if the workers vigorously oppose being compelled to join a union and fail to vote to be represented.

All told, one must wonder why the prevailing bill is so important to unions. It must be viewed as just another way of showing their strength in the City and reminding politicians who is in charge.

City Gets Another Summit

No, not another event on the scale of the G-20; this time, it is a summit on education. Funded by a $10k grant from the America’s Promise Alliance, the forum will allow "community leaders to convene key stakeholders to develop and/or advance action plans for improving the high school graduation rate" according to a City Council resolution to accept the funds.

What more can be done? They can’t argue for college aid. The City and the School District have already tapped the local foundation community to create the Pittsburgh Promise, a program that awards college scholarship money to graduates of the Public Schools. The chance at getting the money should be spurring on students to work harder and graduate on time with the necessary grade point average if we are to believe the proponents.

Then too, they can’t argue that the School District has been tight-fisted: per pupil expenditures have almost doubled in the last decade (($11k in 1999 to $19.5 in 2008 according to the Schools’ financials). That should be adequate money to prepare students to graduate on time.

Maybe they can discuss the increasing impact charter and cyber charter schools are having on the District. In FY2005, the enrollment ratio of the Pittsburgh Public Schools to students living in the District attending charter schools was 17 to 1: three years later, enrollment in the Public Schools has fallen and enrollment in charters has grown to the point where the ratio is 11 to 1. Perhaps parents are seeing something that others aren’t. But don’t look for these stakeholders to be invited to the meeting.

The City’s New Architects

A coalition of community activists, environmental groups, and labor unions are becoming increasingly vocal on how development is supposed to look in Pittsburgh-one City Council member called them "a politically powerful force to reckon with" and we can see firsthand the result of their efforts. The URA tells a hotel developer to seek a higher classification of a "green" certification; demonstrations on the North Shore and at the Mayor’s office over community benefits; and now calls to mandate a living wage for projects taking public money are just the latest instances of action by this coalition.

Let’s take the living wage: it is back again after the City and County both resisted enacting it in the early part of the decade. With no discussion of a Countywide provision the City would make itself an island, a point noted by developers. And of course developers who don’t come begging for assistance (not many of those nowadays) would not have to comply with the regulations should they become law, a point noted by union activists. But it is a sure bet that this coalition would stage protests and file complaints if a large-scale development (built without public money) did not pay a living wage or was not environmentally friendly-they would be accused of "skirting the law".

But here is the bigger point that merits debate: after numerous public-private partnerships, state financed developments, tax increment finance projects, stadiums, a convention center, a new casino, etc. when do the private developments that were supposed to create family sustaining wages-without more government intervention-start popping up? We were told that doing the big subsidized developments would create a critical mass that would attract private spin-offs-now nearly a decade after the late 1990s rush of activity we still see elected officials and interest groups jockeying for ever more special provisions. And they will be anything but a "silent partner".