Comparing Municipality Employee Counts

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Our recent report on municipal financial statistics (Report # 2010-04) shed light on the spending and revenues of a cross section sample of twenty municipalities in Allegheny County.  The report noted that, compared to the City of Pittsburgh, municipalities in our sample spent much less and collected less in revenues on a per capita basis.  Another metric to consider is the number of full-time employees each municipality has per 1,000 residents and to see how that stacks up against the City, other municipalities and cities across Pennsylvania. 



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Merging Municipal Functions into Counties is a Bad Idea

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A recently introduced bill in Harrisburg would mandate that all municipal functions be merged into their host county.  The rationale is an old one-too many municipalities are stifling economic growth and development.  Furthermore, bill backers claim there are too many municipalities in financial difficulty with underfunded pension plans and merging them into their county is the only way to save them.  But does this idea have any merit? 



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Act 47 Prescribes Remedies for Reading

Though separated by a distance of over 200 miles and a population difference of more than 200k people, Pittsburgh and Reading now share the distinction of both being Act 47 financially distressed communities. Late last week Reading’s Act 47 plan was published on DCED’s website.

Reading has been operating at a deficit since 2007, and the recovery team recommends a variety of solutions related to workforce (a three year pay freeze, employees pay more for health benefits), turning services over the Berks County, and exploring various revenue raising options.

A brief snapshot of three indicators in Pittsburgh-which has been in Act 47 since 2004-and new entrant Reading shows that Reading has fewer employees (on a per 1000 person basis), its ratio of fringe benefits to salaries and wages is lower, and so too is its per capita debt level.




Headcount (FTE per 1000 people)



Ratio of Fringe Benefits to Salaries



Debt (per capita)



While Reading might find encouragement that its situation might not be as bad as Pittsburgh’s (which raises questions of its own since Pittsburgh has been in for six years and has a separate oversight board to boot) it should be known that only six municipalities have emerged from Act 47 since its inception. For every one community that has exited there are three still in fiscal distress.

Another Entrant into Act 47

Does this sound familiar? A city with "year end structural deficits that were addressed by one-time solutions; debt burden in excess of 10% of its general fund revenues; and a stagnant tax base that raises serious concern about the ability of the City…to generate the revenue necessary to support core municipal services".

It could be Pittsburgh, or one of any number of towns in the Mon Valley, but it turns out that the description is of Reading in Berks County, the Commonwealth’s fifth largest city (population of 80k according to the most recent Census estimate). Reading was just granted entrance into Act 47, a classification of municipal distress that holds 18 other cities currently and from which only 6 have emerged.

Four of the state’s ten largest cities are in some type of financial oversight, either Act 47 (Scranton and Reading), an oversight board (Philadelphia), or both (Pittsburgh). The Department of Community and Economic Development (DCED) has completed its initial assessment of the City and found that its per capita and median household income was lower than other similarly-sized cities as well as lower than Berks County and the Commonwealth.

How long the City will remain in Act 47 is anyone’s guess. Some have been in since 1987 and are operating under second, third, or even fourth revised plans. Reading is just beginning its quest for financial solvency.