The recent addition of Ms. Dugan to the Intergovernmental Cooperation Authority (known as the oversight board) was a tremendously positive step for the Governor to take in addressing the lackadaisical approach of the board and its habit of too often being irrelevant to the job at hand-guiding the City’s financial matters with strict discipline.
But more remains to be done to bolster the resolve and performance of the oversight board and the Act 47 recovery team. The Republicans in the House should move quickly to replace the appointment made several years ago by then Speaker Perzel. The appointment of a Democrat union leader by the House Republicans was disappointing in that it gave the Democrats a four to one majority on the board. Leaving this appointee in place keeps the board in the hands of a majority likely to be friendly to the City’s employees and higher spending and less likely to be worried about the taxpayers, fiscal discipline and the business climate.
At the same time the Governor, through the Secretary of DCED, should evaluate the performance of the Act 47 coordinator with an eye to replacing the group with someone less intimidated by the Pittsburgh government and its political and civic supporters.
The latest report from the City Controller, showing Pittsburgh spent more than it took in last year along with the debacle over the City’s massively underfunded pension plans, point to seriously inadequate financial oversight for the last seven years. What do Pennsylvania’s taxpayers have to show for the millions of dollars spent since 2004 for the two oversight groups? Not much apparently.
Now comes Pittsburgh Mayor Ravenstahl with plans to "consider" imposing a two cents per ounce tax on sugar sweetened soft drinks. What a non-starter. Two cents will boost the retail cost of a two liter bottle by about $2.00. Such an increase in price will drive sales down precipitously making the hoped for $26 million in new revenue a pipe dream.
The only real issue here is this: Who is advising the Mayor?
This certainly does not pass the smell test or the taste test. Now we can see where some of the stalwart supporters of the Mayor and Pittsburgh policies come down on this outlandish idea.
Pittsburgh is in serious financial difficulties because of a long history of signing generous contracts with its employees. And now City Council wants to abandon what little progress that had been made under Act 47 over the last five years. Council just voted to amend the Act 47 coordinator’s latest plan by restoring pay raises and a 5th week of vacation for long time employees-a week that was removed under the original Act 47 plan. Final approval awaits and faces objections by the Mayor.
From news accounts it appears labor leaders have been lobbying Council members for labor friendly changes in the coordinator’s plan before it goes to a final vote. And right on cue, Council has decided to go along. After all, in Pittsburgh maintaining labor peace with City unions is job one.
How to pay for the new found generosity while still trying to figure out how to cover previously incurred legacy costs? Impose $26 million in fees on all-day parkers, hospital admissions and university students. And hire a delinquent tax collector to see if he can wring $13 million from tax scofflaws over the next five years.
Rather than facing up to the real need to reduce employee costs-which are nearly 60 percent of total expenditures-and the further buildup of legacy costs, the City Council apparently believes that it can spend more, tax more, and hope state and federal generosity will be there when the inevitable crunch comes. Evidently Council members are admirers of the philosopher Alfred E. Neuman who in times like these would say, "What, me worry?"
One of America’s great cities indeed.