Detroit and Chicago have announced plans to offload their unfunded retiree health plans onto the Affordable Care Act exchanges. The Detroit announcement predated the July 18th filing for bankruptcy protection. These cities believe they will save tens if not hundreds of millions in expenditures annually if they are successful in their intentions.
While Pittsburgh has some similarities with the problems in Detroit (albeit nowhere near the same magnitude) and there is cause for concern about Pittsburgh’s financial wellbeing, there is little chance that on its present course the City will face bankruptcy. That is not to say that it can be allowed to return to the spendthrift, reckless behavior that had the City headed toward financial collapse and brought it to the point of being placed under two state financial overseeing groups-the ICA board and the Act 47 financial coordinator team-a decade ago.
The announcement of Detroit’s bankruptcy filing was not unexpected. After all, the city has been running huge deficits for years, has built up almost $20 billion in unfunded pension liabilities and debt, has abysmally poor public services including inadequate policing, has been hemorrhaging population and has high crime rates. In financial terms the city has been bankrupt for years. And it has benefitted from major federal assistance in the form of a bailout of GM that preserved jobs, pensions and health benefits for union employees.
The Governor has signed legislation that will dramatically alter the board of directors of the Port Authority (PAT). What was a nine member body with members serving staggered five year terms and appointed solely by the Allegheny County Chief Executive will become an eleven member body with members eventually serving staggered four year terms with appointment power shared by six individuals.
Believe it or not, for the first time since the 1970s-as far back as reliable data is available-Pennsylvania might have just had its first school year without a teacher strike.
Begun six years ago with great fanfare and grandiose goals, the Pittsburgh Promise seems to be falling well short of its primary objectives to improve the quality of education and raise high school enrollment at City schools.
In an informational piece put out by the Greater Pittsburgh Chamber of Commerce and the Allegheny Conference on Community Development, the point is made that “…in densely populated urban areas, there just isn’t enough space to fit the roads that would be needed to move people around.” The message of the piece attempts to persuade rural lawmakers to approve funding for mass transit.
According to newspaper accounts, the proposed House amendment to the transportation funding legislation takes a very sensible and long overdue approach to difficult issues that have been time and time again kicked down the road. As presented earlier this week, the proposal takes on special interests and offers money saving solutions.
Pension problems facing school districts have come home to roost. As we wrote in a recent blog: “Unless there is agreement on pension reform legislation…most school districts in Pennsylvania face ruinous increases in pension funding.” To handle this increase, districts will have to raise taxes, lay off personnel, or both. And while the Commonwealth, through Act 1 of 2006, restricts a district’s ability to raise property tax rates, in Allegheny County eleven school districts, 25 percent of the total, have petitioned for an exception to this law meaning they now have permission to increase property tax rates above the Department of Education’s prescribed limit.
To no one’s surprise the head of the state’s largest teachers’ union is again complaining about the unwillingness of the state to replace the Federal stimulus spending that ended in 2011. Moreover, the union head is unhappy that a large fraction of the $1.25 billion increase in funding since Governor Corbett took office is going to pensions and social security.
