A key state legislator asked fiscal overseers yesterday to consider sanctions against the City of Pittsburgh if it tries to freeze the parking tax at its current level.
Sen. Jane Orie, R-McCandless, wrote to Barbara McNees, chair of the Intergovernmental Cooperation Authority, asking that the state-picked panel consider withholding state revenue and going to court if the city bucks state law that demands ongoing cuts in the tax.
Council's Tuesday action to keep the tax at 45 percent, if signed by Mayor Luke Ravenstahl, "is a violation of both the letter and the spirit of the laws enacted to rectify Pittsburgh's distressed financial condition," Ms. Orie wrote. If the mayor signs the legislation, she urged that "all appropriate steps be taken, including withholding state revenues until the City brings itself back into compliance."
Ms. McNees, who had not seen the letter, said she hoped it "won't come to that." She noted that Mr. Ravenstahl's budget calls for cutting the tax to 40 percent next year, then to 35 percent by 2010.
That schedule, enshrined in the 2004 state law that adjusted multiple city taxes, came into doubt with council's 8-1 vote to keep the tax at 45 percent, and dedicate some revenue to cutting debt and pension obligations.
The freeze "seems to be the only way to engender some kind of dialogue on the subject of revenue," said Council President Doug Shields.
He said the city never got the revenue it should have received from the 2004 tax shift. It faces projected deficits in 2011 and beyond, a $501 million pension shortfall, flat property taxes, a delayed casino opening, and the expansions of tax-exempt institutions.
"I certainly have no intent of insulting or being disparaging toward the state Legislature and certainly not to Senator Orie. But the fact of the matter is, the numbers speak for themselves," he said.
The author of the freeze bill, Councilman Jim Motznik, said he pushed it because an audit showed that lot operators did not cut prices when the tax dropped from 50 percent this year. He hoped the infusion to pensions and debt service would win support among Republicans for a Senate bill allowing the tax to stay at 45 percent.
The opposite has happened.
"I hope and trust that the ICA board will affirm to the city and the public that it will uphold state law through the courts if necessary," Ms. Orie wrote, "in order to bring fiscal responsibility to the city of Pittsburgh and its taxpayers."
Mr. Shields said he has "no doubt in my mind that should the city go ahead and try to impose [the freeze], it would be overturned in a court of law."
Ms. McNees said that if the city violates state law or its long-term recovery plan, the ICA can ask the state to seize payroll taxes, most of the $52 tax paid by people who work in the city, some state grants, and an anticipated $10 million a year in slots revenue.
The city budget suggests that ICA sanctions could cost the city $57 million next year, and more in later years. Ms. McNees stressed that there is, as yet, no cause to pull the trigger.
Mr. Ravenstahl has said he will go to Harrisburg to discuss the parking tax Monday, and his office had no update on his position yesterday.
Rich Lord can be reached at firstname.lastname@example.org or 412-263-1542.