Tag Archives: H1828

The pension reform train is full speed ahead, and Pittsburgh sees one last opportunity to jump off, at least for a brief time (two years). The legislation before the House would allow Philadelphia to raise an additional 1 percentage point on its sales tax (bringing it to 8 percent) and would outline reform for the remainder of municipal pension plans in the state (discounting Philadelphia’s 3 plans, there would be over 2,500 subject to the reform program), including Pittsburgh’s plans.

Now the political debate is over Philadelphia’s desire to quickly get its sales tax vs. Pittsburgh’s desire to opt out and try its parking garage plan. Some fear that opening up the bill for Pittsburgh will allow for other amendments, thus requiring another read by the Senate, and the possibility for the bill falling apart.

Of course, there are numerous opinions floating around about whether Pittsburgh should get a temporary pass and what the legislation would mean. A sampling:

The Mayor said the reforms "will force this city to make some very difficult decisions…It will be very difficult for us to look at those taxes and to look at those service reductions". Of course it will force difficult decisions: that is the point. The City has to start to decide how to perform services (in house, contracting with the County, bidding out to private vendors, or not at all) if it wants to offer a menu of them and still meet the obligations of promises it made to City employees. The City would be facing a difficult decision under Act 47 if they followed through on the directive to put an additional $10-$15 million into pension by either cutting spending, raising taxes, or privatizing garages.

The head of the fire union said "If it happens, the costs will fall on the backs of the employees of the city." No surprise in his line of argument. But on whom else would he like to see the costs fall on-taxpayers across the state? And what type of solution would he advocate for: a sales tax that just affected the City of Pittsburgh? That would do more damage to the City and would likely make it into an island.

A state legislator said "There’s no reason we can’t give them a period of time to get their house in order." How much more time? The City has been in oversight and Act 47 since 2004 and there have been suggestions of selling assets for just as long. It was only at the beginning of this year that the idea of the parking garage sale/lease moved beyond the trial balloon stage.

We will see how it all plays out early next week.