Mayor's budget plan rejected

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Some spending cuts, some quick fixes, and a not-yet-dead tuition tax are likely components of an emerging city of Pittsburgh budget in the wake of yesterday's rejection of Mayor Luke Ravenstahl's 2010 fiscal plan by state overseers.

That was the view in a city government shaken by the Intergovernmental Cooperation Authority's unanimous vote against a $453.8 million spending plan that contained the unproven 1 percent tuition levy. The five-member board found that the inclusion of a tax authorized by no state or local legislation violated state law governing the city's long-troubled finances, and sent the budget back for a rewrite with a six-week deadline.

The mayor early yesterday raised the specter of draconian cuts to police, public works, crossing guards, pools and the elimination of a fire station. Controller Michael Lamb and Council Finance Chair William Peduto countered with a cobbled-together mix of savings and revenue.

But by yesterday afternoon Mr. Ravenstahl said a hybrid of those approaches "would be a reasonable solution, and one that, on its face, I would be supportive of. But the critical piece of that, that I would need in order to not make cuts this year -- significant cuts -- is getting that tuition tax passed and out there into the court system."

The tuition tax was supposed to raise $16.2 million next year, most of which would go to fortify the city's wobbly pension fund, and $1 million of which would go to Carnegie Library of Pittsburgh if it would cancel planned branch closings.

But the colleges and universities have vowed to fight it, likely in court, and Mr. Lamb said collecting it next year was a "speculative" proposition. The decision on the tuition tax's legality, he said, "will be made by some court at some point far off into the future."

So the board voted down the budget, after enduring a 15-minute tongue-lashing from Mr. Ravenstahl.

The mayor said the authority "quickly caved" in June, when council nixed its recommendation to close a Greenfield fire station. He noted that four authority board members have ties to universities -- two are past college presidents -- and asked: "Who exactly does the ICA represent?" And he said that rejection of his budget would show they are "controlled by the few and the privileged."

The authority's solicitor, Glenn Mahone, said that the members with university ties could vote on the budget after disclosing their relationships, which they did.

"I think the mayor's strident comments are more based on frustration and his desire for a long-term solution," said authority Chair Barbara McNees. "I've always felt we've had a good working relationship."

Police and firefighter union leaders also urged the ICA not to reject the budget, saying their members have sacrificed much, and morale and staffing levels could be damaged.

Ms. McNees denied that the authority was forcing cuts in city services. "There are ways to balance this budget that would not be on the backs of city employees," she said.

Mr. Lamb and Mr. Peduto said the rank-and-file need not suffer, and suggested 13 ideas that they said would improve the city's bottom line by $15 million. They include improving tax collection and recycling; raising some fees; shifting $5.2 million from unnecessary or overfunded accounts; selling ad space on city properties; auctioning off city surplus materials and parts of doomed Mellon Arena; and other measures.

"It's a patchwork to get us through one year," Mr. Peduto said.

A patchwork budget won't be acceptable, though, if council doesn't approve the tuition tax, Mr. Ravenstahl said.

Without a council-approved tax, he's "less confident" that a long-term solution for the city's revenue gap will be found, and "will be adamant about significant cuts."

He said he believes that the tuition tax, if approved by council, would be approved in court next year.

A consortium of tax-exempt groups, including the universities, hospital groups and nonprofit insurers, paid the city $14 million from 2005 through 2007, and offered $5.5 million for 2008 through 2010. Council hasn't acted to accept the current offer.

Mr. Peduto and Mr. Lamb said they've had conversations with leaders of large tax-exempt institutions, including universities, who may be willing to make further voluntary contributions. The Pittsburgh Council on Higher Education announced in a news release that the colleges and universities would "discuss our continuing activities in support of the entire Pittsburgh community."

But Mr. Ravenstahl said that without the "threat" of a tuition tax, they'll feel that $5.5 million over three years is enough. "There's nothing that compels them to do anything more, so they're able to get away with that."

Rich Lord can be reached at or 412-263-1542.


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