Heading into a pivotal meeting of Pittsburgh City Council today, Mayor Luke Ravenstahl's proposed 2010 budget got a boost from state overseers, but his tuition tax plan took criticism from state and local officials.
The state-picked Intergovernmental Cooperation Authority yesterday approved a revised $446.5 million budget that does not include the 1 percent tuition tax, after last month rejecting a $453.8 million version that relied on the unproven levy. That approval allows council to go through with a tentative budget vote set for today.
The controversial tuition tax, also on the agenda for the first of two votes, almost certainly would face a court fight, so it's unclear if and when revenue would start coming in. Mr. Ravenstahl said the city needs $15 million in new revenue to bolster a pension fund that holds just 31 percent of what it needs to meet its obligations.
Last night, however, some council members said a vote on the tuition tax may be delayed to allow city officials more time to talk with university leaders, who strongly oppose the plan.
Yesterday, state Auditor General Jack Wagner, a gubernatorial candidate, said that the tax is a poor solution because it "is asking a select group of people to fund a specific entity of government - in this case, pensions.
"People are hurting. No matter where you go in Pennsylvania, the average person is doing everything they can to reduce expenses. It is not a time to increase taxes."
His office is scheduled to audit the city's pension fund next year, focusing on the use of state aid to help with funding. He said the state should mandate consolidation of the 2,600 municipal pension funds "down to under 100" rather than perpetuating a system that forces cities and towns to struggle to manage their own funds.
Also criticizing the tax yesterday was Controller Michael Lamb, who told the ICA that the tax isn't needed to fund city operations next year. "I would hope that pressure would be brought to the mayor and to council to either vote this measure down, or table it."
Tabling would shelve the tax until a majority of council voted to untable it.
Five of nine council members had said they would reluctantly vote for the tax, but yesterday one of them, Tonya Payne, said she now was undecided.
The ICA also voted to transfer the first dribble of slots casino host fee revenue to the city. The $635,129 going to the city represents 2 percent of the Rivers Casino's net revenues from its early August opening until the end of September. The city had expected to get $2.4 million from the casino this year, but delays in its opening prevented that.
Mr. Lamb said state law guarantees that the city will eventually receive at least $10 million a year for hosting the casino. It is already getting $5.1 million in development aid as part of the state slots law.
Rich Lord can be reached at firstname.lastname@example.org or 412-263-1542.