Is it Time for a New Merger Typology?

It has been nearly five years since the Mayor of Pittsburgh stated "a year from now, when you ask the question ‘should the City merge with the County?’ we will have the answer". It has been four years since the County Executive said of a prospective merger "hey state [of Pennsylvania], you have to help fix the unfunded pension and the outstanding debt". And it has been three years since the report of the Citizens Advisory Committee on the Efficiency and Effectiveness of City-County Government, or the "Nordenberg report" after the chair of the committee, released its recommendations. That report was to provide the answer to the question posed by the Mayor in 2006.

So what has happened since? We have heard of the 911 consolidation, the City and the County making agreements to purchase services together, the City providing services to other municipalities, municipalities and/or their authorities joining together with others to provide services. Just in the past week there was a failed multi-municipal merger of police departments, a successful merger of water systems, and a merger of fire departments. Unlike the "one size fits all" approach that a City-County merger would have produced (though municipalities other than the City of Pittsburgh, school districts, and authorities would have been untouched) there are a variety of methods by which mergers and consolidations have come about.

They can be cooperative, directed, or voter-driven, and either between various governments (County-City, City-municipal, County-municipal, authority-authority) or wholly within government (a department-department consolidation). Note that the Nordenberg report pointed out that their inquiry was "…limited to improving the efficiency and effectiveness of the two important units of government…[it] does not extend to other municipalities or to school districts".

The recent union of the City and the County into a financial management system came at the behest and insistence of the Act 47 team and the oversight board. That would be considered "directed, County-City". The agreement announced between the City of Pittsburgh and the Borough of Wilkinsburg for the City to provide fire protection would be considered "cooperative, City-municipal". That’s similar to the garbage collection pact negotiated between the two governments several years ago.

The pact between two water authorities in the North Hills reported in the newspapers would be "cooperative, authority-authority" and the consolidation of row offices into County departments would be "intra-County, voter driven" since a voter referendum approved that change.

What this suggests is that there is more than one method by which to evaluate the conditions under which a merger or consolidation is undertaken. The typology might help to determine which kind works better than others.

Newspaper Revisits Nordenberg Report

The Post-Gazette in an opinion piece this morning laments that politicians and local leaders have failed to get a referendum question on the ballot asking voters to approve a merger of the Pittsburgh and Allegheny County. In decrying the lack of progress they remind us of the infamous Nordenberg Report from 2008, which recommended the merger vote. According to the op-ed writer the Nordenberg study group did a very thorough job of making the case that with all the municipalities there is excessive duplication and called boldly for a City and County merger to address the issue.

Too bad the op-ed writer has never bothered to read any of the criticisms of the shortcomings of the Nordenberg Report. Analytical ineptitude hardly begins to describe the hastily written report. Misleading use of Louisville’s job growth following merger with Jefferson County and failure to point out the huge differences between the situations in Kentucky and in Allegheny County and Pittsburgh are just a sample of the fallacies contained in the study.

But what really sank the Report almost as soon it was released was the absurd plan for merger. Pittsburgh would merge with the County, but all other 129 municipalities would remain intact. Pittsburgh as a government would cease to exist and be replaced by an "urban services" district. The district would run city services and collect taxes to support the expenses. Unfortunately for the plan, the Pennsylvania Constitution does not allow different tax rates for people and businesses in the same government jurisdiction. With Pittsburgh no longer in existence as a municipality its residents would be citizens of the County and could not be taxed higher than County residents. Moreover, Pittsburgh’s debt and other obligations would be shared by all residents of the County.

What a pathetic effort for seventeen months of study. Little wonder the public, in the City and across the County, have no interest in pursuing the merger.

Perhaps if the writers of opinion pieces would actually read the report and look at some of the criticisms leveled against it, they might climb down off their lofty high horse and deign to consult with a few folks who know something about the issues and problems in the Nordenberg Report. But don’t count on it. Strongly held convictions based on pie in the sky notions are often impervious to facts and reasoned argument.

Merger Misprint

In last Tuesday’s USA Today an article on city-county mergers-likely prompted by a proposed referendum vote this fall in Memphis and Shelby County, TN-was printed which contained the following statement: "Pittsburgh and Allegheny County, Pa., are considering forming a single government".

Really? That might have been true in May of 2008 right after the release of the Nordenberg report calling for an end to duplicative services and a referendum on merging "at the earliest appropriate time" but a funny thing happened on the way to the proposed consolidation.

There was the problem with how a merged entity that did not include the 129 municipalities other than the City would function; that a constitutional change would be needed to allow the City to become an urban services district that would permit the citizens of the district to be taxed at a higher rate than the citizens in the merged entity outside of the urban services district; that all areas in Allegheny County (and PA) are incorporated and have their own form of local government, a case quite different from other mergers; and this goes without mentioning the huge financial liabilities of the City that voters in Allegheny County would be reluctant to take on would the issue ever make it onto the ballot and that no one involved in the report is vocally expressing their support or questioning why their suggestions are so slow-going.

The possibility of a ballot question was essentially killed in August of 2008-approaching nearly two years now-when the County’s legislative delegation said it was not ready to pave the way for a bill allowing a question. What have the City and the County done in the time since to convince taxpayers they are aggressively looking to end duplication in public services while there is no merger talk?

Mr. Ravenstahl Goes to Harrisburg

Unlike Mr. Smith who went to Washington and attempted to do the noble thing by defending liberty and attacking graft, Mayor Ravenstahl is going to Harrisburg to plead for state money to help the City with its perennial and seemingly unfixable fiscal problems. After rebuffing the Legislature’s efforts to help the City with its pension difficulties last year, the Mayor might get a polite but cool reception when he shows up in Capitol City.

This time he is coming with the purported support of yet another newly formed coalition of corporate, university and elected officials. Interestingly, one of those is the Chancellor of the University of Pittsburgh who vigorously fought the Mayor’s effort to impose a tuition tax on college students in the City. The Chancellor also headed the task force looking into a City-County merger. A task force that recommended strongly the City and County consolidate duplicative services. In two years since, there is no measurable progress in that direction. Now the Chancellor is back as a member of the new coalition agreeing to help lobby the state for additional sources of revenue for the City.

How ironic. The state is facing serious fiscal problems of its own and to make matters even worse, revenue is coming in a half billion dollars below projections in the current fiscal year-an additional shortfall to be made up somehow. The universities have complained about the inadequate funding they receive from the state while many municipalities and school districts will also be pleading for more state funds. And the answer from the Chancellor is to lobby for more or higher taxes on already strapped Pennsylvanians to fix Pittsburgh’s spending problem.

Perhaps it never occurs to these folks that the voters in Pittsburgh were silent partners and enablers in creating the monstrous fiscal mess the City finds itself in. And, it must be noted, the state has helped with new revenues several times already over the past couple of decades. If more revenue would solve the City’s financial problem, it would have been solved. Even under supervision of two state watchdog groups for the past six years Pittsburgh has failed to make substantial progress. The real problem is the City cannot bring itself to make the serious cuts it needs to make and it has refused to take the steps other communities have taken to reduce expenses through outsourcing.

Basically, Pittsburgh’s government is run by and for the people who work for the City government. Until that situation changes, Pittsburgh will never get well.

Humbug: Coal to the Coalition for More Taxes

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. 


Continue reading

Plenty of Merger Ideas, Little Merger Action

On the heels of last Friday’s forum on the City-County merger the City Controller has released a report on the City’s Housing Authority that says perhaps the Authority should cooperate a bit more with other units of government and maybe even merge with the County Housing Authority.

Then too, perhaps City and County departments of Parks, Public Works, Finance, and Police should cooperate. But why don’t they? Obviously there must be something at work that has to do with job security, seniority, and benefits that holds such mergers up. The Controller noted that the Housing Authority exhibits "a little reluctance" to cooperating-no surprise there. But even where those issues are non-existent there is still difficulty in getting governments to consolidate.

Consider that the City’s Stadium Authority still exists even though it owns no stadium and shares much staff with the City-County Sports and Exhibition Authority. The Stadium Authority’s operations basically consist of being a pass through for various revenues and paying off bond issues. And even then there was never a case made for shutting it down or having the SEA absorb it.

There are a lot of messy details that come with merging governments, details that a lot of advocates simply want to brush over in their zeal to put the issue of a City-County merger to a vote as soon as possible. But the public wants to see some evidence that there will be savings and increased, not decreased, efficiency in services. Until there is a bit more effort beyond the 911 merger, the idea will not likely move forward.