Actions have consequences, of course. And too often, government embarks on the former with little or no regard for the latter. Take, for instance, the City of Pittsburgh’s move to increase its realty transfer tax.
Commonly referred to as “the deed tax,” it rose from 4 percent to 4.5 percent on Feb. 1. It will increase again, to 5 percent, in 2020. Those are increases of 12.5 percent and 25 percent, respectively.
City Council adopted the hike on a 7-2 vote. Under provisions of the new law, 2.5 percent of the levy goes to city coffers while Pittsburgh Public Schools and the commonwealth each take a single percent.
Advocates say the extra proceeds are key to funding an affordable housing trust fund. By making housing less affordable for many. And by adding hundreds of thousands of dollars to the sales cost of commercial real estate.
The “seen” that prompted a majority of the council to adopt the tax hike was funding an initiative they say is badly needed.
But the “unseen” is the logical and reasoned reaction – talk in corporate real estate circles of reducing investment in city properties and talk among real estate agents of a climate that discourages home-buying.
It is axiomatic that the more you tax something, the less you get of it. How predictable then – and how par for the course – that a supposedly “progressive” move is regressive at its very core.
Yes, Pittsburgh has been released from Act 47 state oversight after 14 years. And with it came all kinds of high-fives and backslapping.
But as the city has been reminded, from a number of quarters, there are plenty of caution lights still flashing.
As a Post-Gazette editorial put it bluntly: “While some of the players may have changed, Pittsburgh still has the same government that got the city into Act 47 in the first place. … Oversight may be gone, but such external levers of change are still needed.”
And that requires a mindset adjustment that embraces sound public policy backed by sound economics – not the kind of “social justice” programs that rob from Peter to pay Paul and make Peter and Paul poorer for the experience.
The Allegheny County Airport Authority is reiterating that the proposed $1.2 billion reconfiguration of Pittsburgh International Airport “will use no local tax dollars.”
That, in light of new criticism that the project – tearing down or repurposing the current landside terminal and building a new ticketing/security terminal, a new parking garage and drastically reducing the number of gates – does not make economic sense and has not exactly been the model for transparency.
The authority maintains that the project will be financed through 20- to 30-year bonds, grants, passenger facility charges and natural gas royalties. And it continues to say that, on net, operational costs will be reduced.
Time will tell, of course.
But do remember this:
The same authority that says it is moving forward with this project in a transparent fashion – myriad public hearings, etc. – made the decision to embark on the airport reconfiguring with no public input.
Colin McNickle is a senior fellow and media specialist at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).
