One Young World: A Good Thing?

The City will roll out the welcome mat for another international-flavored conference called the "One Young World Summit" in mid-October 2012. Of course the Mayor and civic boosters are all titillated to have the summit coming since by then it will have been three years since the G-20 came to town. The Mayor stated "2,000 of the world’s brightest young people will have the opportunity to experience why Pittsburgh is America’s most livable city. They’ll see firsthand the transformation Pittsburgh has undergone that is second to none in the country."

That’s in case they were unable to read, listen, or view any of the media that came out of the G-20, which officials noted at the time was "…a chance for us to showcase our city, and our region, for the world." Perhaps the young leaders that comprise the "One Young World Summit" were, well, too young to pay attention.

One Pittsburgh area delegate noted that at the recent conference (the group’s second, held in Zurich) "There were some anti-American sentiments expressed here…so I’m looking forward to breaking down some of the barriers in Pittsburgh and showing them what good we can do as well." That’s going to take a Herculean effort based on the impact areas featured on the group’s website. To wit, the group calls upon:

"Global businesses to define and act on their role in the fight against poverty"

"Our political leaders to make clear their stance on humanitarian issues before we consider our support for them."

"Governments to take more deliberate, legislative action to help guarantee that appropriate carbon emissions reduction targets are both agreed and met by 2020."

Sounds decidedly anti-market, anti-growth, and pro-redistributionist; so why would the local delegate be at all surprised at anti-American sentiment?

And what of the conference attendees? Are they going to take time out of the meeting to stroll around Downtown, spend money, eat at restaurants, and stay in hotel rooms without deep contemplation about where the food and services came from, how much profit the sellers of the goods are making, or the presence of multi-national corporations in the City where the summit is held?

While they are drifting off to sleep they might want to do a mea culpa or two for the carbon footprint they imposed on their flight to the Steel City.

What the Mayor’s China Trip Means

If hosting the G-20 conference last fall was to tell the world Pittsburgh had changed-the spokesman for the region’s premier economic development agency said at the time that it was "an opportunity to dispel the smoky-city image once and for all"-then why did the Mayor of Pittsburgh and economic development officials have to travel to China to tell them that Pittsburgh is no longer a "smoky city"?

Sure, the Mayor was extended a personal invitation and should not pass up the opportunity to "sell" Pittsburgh. Apparently from press reports he is the only elected official to go on the trip.

So should the junket bear fruit in the way of development opportunities, we’re sure the Mayor will be first to celebrate. That would even be true if a Chinese company decided to locate anywhere in western Pennsylvania, say, in the airport corridor, Cranberry, or Westmoreland County, right? Sure, the City would not get property taxes from a development (but neither would any other community if there was a subsidy or abatement involved) or wage or payroll taxes, but there would be spin-off benefits for the City somewhere. And what exactly would be built? Manufacturing is doubtful, so perhaps a distribution facility for imports. Or maybe there could be a closer look at some of the other assets the City has at its disposal.

Summing Up the G-20 Summit

Shortly after the conclusion of the September G-20 Summit, the head of VisitPittsburgh claimed the event’s economic benefits to the City and region reached $35 million.  As we pointed out in an earlier Policy Brief, that was a very dubious claim. Two months later data are available that call into serious question the notion the region enjoyed a $35 million boost in economic benefits.  We now have a reading on the RAD (regional asset district) tax revenue for September, which is a gauge of retail sales in Allegheny County, as well as figures for hotel occupancy tax revenue for September, which allow us to calculate the dollars spent on hotel rooms during the month.  By comparing the September 2009 data to September 2008 numbers and examining the pattern of year over year changes for 2009, it is possible to come to a reasonable conclusion about the G-20 meeting’s direct impact on spending. 


Continue reading

Pittsburgh Mayor Bubbles over with G-20 Enthusiasm

"I think what we have proven is that anything is possible in Pittsburgh on the heels of the G-20." Thus spoke Pittsburgh’s Mayor in explaining his optimism in being able to levy new City taxes on college students and hospital patients-with the help, if need be, from the Legislature.

This is just what the doctor ordered after he and the Legislature capitulated to public sector union demands to eviscerate the already modest pension reform last month.

There is clearly one area where the impossibility of improvement in Pittsburgh is solidly entrenched. And that is curbing the power of public sector unions. Unions-that by virtue of political power that is far beyond their numbers-have almost single-handedly driven the City to the edge of bankruptcy.

When it appeared Harrisburg might actually take a baby step towards helping the City deal with the pension and legacy cost issue, the Mayor, with the assistance of labor unions who refuse to yield a scintilla of their overweening control over local governments, essentially browbeat the Legislature into scuttling the reform plan it had worked on for months.

If the Mayor believes his ebullient statement that G-20 proves he can do anything, then he should use some of that new found wizardry to restore a semblance of taxpayer control over the City’s employees. Or perhaps he does not believe that such a restoration of balance of power is necessary, in which case taxpayers (including new ones such as students and hospital patients) must expect to forever bear the brunt of government’s kowtowing to special interests.

The irony of course is that one of Pittsburgh’s biggest PR points during G-20 was how the City had morphed into an eds and meds success story. It must have escaped the Mayor that a major reason for that success is that these sectors are tax exempt and derive enormous amounts of their revenue from government sources.

Why not simply ask the President and Congress to send him the money Pittsburgh needs? Or does G-20 optimism that he can do anything not extend to believing such help would be forthcoming or is he just too embarrassed to admit that America’s premier green, new economy city is teetering on the brink of insolvency?

Will G-20 Backfire for Pittsburgh and Pennsylvania?

When reporters from around the world write about Pittsburgh and Pennsylvania during their visit in conjunction with the G-20 meeting, what will they say? Of course, with all the "redd up" activities and the swell parties being thrown and the constant barrage of positive spin from the Mayor and County Executive, it is expected that nothing but laudatory comments extolling Pittsburgh will be forthcoming.

On the other hand, reporters aren’t stupid. If they bother to read the local paper or watch local news broadcasts they will be well aware that not is all perfect in the workers’ paradise. For example, Pennsylvania has only a skeleton budget in place and has not funded its biggest expenditure item–education. Then too, it will not have escaped their notice that Pittsburgh’s finances, particularly its pension plans, are in shambles. And how about those Pittsburgh schools. Think that might have attracted some attention?

Lastly, can it have slipped under the radar how public sector unions threw their weight around in Harrisburg to scuttle what was a tentative first step to help municipalities cope with severe pension funding problems?

Reporters who do not simply run with the self serving handouts from the Mayor’s office and the Chamber of Commerce will undoubtedly find some of the unattractive sides of Pennsylvania’s and Pittsburgh’s governance. The City might be physically improved and have great cultural and higher educational facilities but the inability to govern itself prudently is a far more compelling story for a real journalist.

The Uncertainty of the G-20

In an opinion piece in the Pittsburgh Business Times, the head of corporate communications for the Allegheny Conference made the argument that the benefits (press coverage, possibility of relocation/expansion from countries) of hosting the G-20 Summit next month will likely outweigh the costs (protests and related damage, traffic restrictions, security spending) and "it is up to all of us to make the most of it" since no one here lobbied or asked for the Summit.

Already several educational and government agencies have decided to err on the side of caution and avoid possible inconvenience by shutting down altogether for the days of the Summit. We’ve chronicled some of them in previous blogs, but we know that the Pittsburgh Public Schools, the Diocese Schools, the Federal Courthouse, and City Council will be closed for business. Are they overreacting? It is hard to say until after the Summit leaves town.

Plus, how do we know that there will be a net benefit from the Summit? We can’t look at previous G-20 gatherings since this is only the third one since last fall. According to the G-20 Study group at the University of Toronto, the first one, in D.C. came together so quickly and without much fanfare that there were no protests (and one has to account for the heavy security presence already in D.C.) and to their knowledge no economic impact study of the meeting.

The indirect costs of possible logistical problems for businesses, possible traffic and travel inconveniences, and others have to added to the direct outlay of $20 million in security costs. Then there will have to be a quantifiable measurement of media coverage and tangible job growth or relocations arising from the Summit. Knowing how hard this is to track in the field of economic development (even the grantors and grantees of subsidies in Pennsylvania often cannot accurately measure the impact of economic development programs) it will be a Herculean task.

The bottom line is that we are taking a leap of faith that there will be a payoff without any evidence that a payoff will come.

G-20: Pre-Emptive Disruption

For all the advance work that the City and County are doing for the G-20 conference in terms of beautification, site visits, and trying to keep Downtown functioning as normal come late September, there are a string of closures occurring in anticipation of the inconvenience and possible chaos that could occur in and around the City. To wit:

  • All community college campuses are closing
  • The symphony has moved concerts from that weekend to June of 2010
  • Duquesne University is cancelling classes and make them up the week of Thanksgiving
  • The Port Authority noted "in all likelihood, we will not have very much service, if any, in Downtown Pittsburgh"
  • The Penguins are rescheduling a game that they were set to play on the 25th to the 15th of September

Even the City’s public safety director, who has noted that the City will be open, but with inconveniences, has acknowledged "many restrictions and road closings, we may not know until days before".

These are just the ones mentioned at the outset: who knows what else will be closed near the convention center when the conference actually arrives? Or what will happen to businesses that remain open but suffer from the residual effect of people staying away from the City? How can visiting dignitaries see the rebound Pittsburgh has made if their gathering causes enough inconveniences that the City is a ghost town?