Past mayors have used a tiny pair of scissors to snip away, here and there, at Pittsburgh's budget, city Councilman William Peduto said at a press event last week. If he were mayor, he said picking up a Remington "Log Master" chainsaw, he'd use a different budget tool.

	CITY ISSUES 2005 First in an occasional series during the campaign for mayor of Pittsburgh. THE SERIES Today: How mayor hopefuls would fix city finances Next mayor will face safety issues

Budget troubles over the last three years drove the Murphy administration to cut pools, recreation centers, police officers and fire houses, affecting the overall quality of life in Pittsburgh. Responding to those cuts -- and the increases in occupation, payroll and parking taxes that came with them -- is a central issue in this spring's primary election.

Here is a look at the main candidates' positions on the issue, followed by analyses of each.

Michael Lamb

Lamb touts his experience cutting the Allegheny County prothonotary's office down from 136 to 62 workers and supports eliminating his elected office, merging it with other court-related row offices. He also led the countywide referendum drive in 1998 to restructure county government.

Like the other candidates, Lamb supports merging duplicative city and county agencies -- such as purchasing or computer divisions -- to save both governments money.

Lamb says he would accelerate plans to reduce the 50 percent parking tax, partially replacing the lost revenue by returning "non-performing" properties to the tax rolls. He says there is $10 million worth of such property lying fallow in the city, abandoned and tax delinquent.

Lamb supports the Act 47 economic recovery plan, saying it "is not the plan I would have written," but the city has to use the plan to "move forward not backward."

Analysis

Managing a small county office in a corner of the City-County Building is a lot different from a work force of 3,500 with nine municipal unions. But Lamb has real reformer credentials and showed he could buck pressure from old-line Democratic Party officials to preserve the row office system. The same backbone would help him as mayor.

Nobody likes the 50 percent parking tax, but the reason it's so high is it's an easy way for the city to soak commuters for almost $45 million a year. Replacing that lost tax money with property taxes from sites that are currently vacant or dilapidated will not work in the short term. It is good policy to sell off the properties, but their value would little help a $417.5 million budget that is barely balanced every year.

Lamb says increasing government efficiency can help offset parking taxes, but that doesn't produce big money either.

As a county official, he did not have to vote on the Act 47 plan as Peduto did, or face pressure from angry union members, but he has consistently supported it during the campaign.

Bob O'Connor

O'Connor boasts of his managerial and budget experience as vice president for Pappan/Roy Rogers restaurants, saying he will act as a CEO for city government. In that role, he promises to hire a city manager and an experienced fiscal official to keep city services and spending running smoothly.

He says he would drop the parking tax, replacing the lost revenues with increased property tax revenues spurred by Downtown housing and other development.

O'Connor says he was the first official, in 2001, to call for five-year city budgets -- such as those implemented in 2004 by the Act 47 team and the city oversight board -- and that he "knew then what we know now" about the ailing budget.

His two main opponents ripped those assertions at a debate last week, saying O'Connor, as a city councilman from 1992 through early 2003 and council's president from 1998 through 2001, helped create the city's fiscal problems.

"You only voted against one budget and that's when you were going out the door," Lamb said. "You should have seen [the budget problems] coming because you were part of the problem."

Peduto said O'Connor did little to stop Murphy's "phantom" budget for 2003, which was balanced with unapproved payroll and alcohol taxes and ultimately plunged the city into near-bankruptcy. Peduto tried to replace the phantom taxes with a garbage collection fee and other plans.

"The only amendment you offered was a tax break for business, when the city's budget was bleeding," Peduto charged.

O'Connor says the Act 47 recovery plan is not perfect, but implementing it is the best way to get the city on firm fiscal ground. Also, he says he has the ability to "unite people, not divide them" and will foster better relationships with the state lawmakers, nonprofit organizations and fiscal overseers who throw their weight around town.

Analysis

Instead of one city manager, the Murphy administration currently has two people: an executive secretary largely in charge of policy and strategy and an operations director in charge of services such as public safety and public works. O'Connor's plan to fix things with a single manager depends on whom he names.

Like Lamb's plan, swapping parking taxes for property tax growth will not work, at least not in the short term. O'Connor's longtime nemesis, Mayor Tom Murphy, had 12 years to fix the budget through an economic development strategy, and look where that got him.

O'Connor briefly mentioned five-year budgets during 2001 budget and campaign debates, but it wasn't a major part of his platform.

O'Connor certainly derided Murphy's budget practices when he opposed Murphy in the 1997 and 2001 mayoral primaries. Yet, as Lamb said, O'Connor only voted against Murphy's 2003 budget a couple of months before leaving council to work for Gov. Ed Rendell. He cast procedural votes against Murphy's 2001 budget but in the end supported it.

Peduto introduced a series of amendments to the 2003 phantom budget that called for new garbage fees and wage taxes, matched with cuts to business taxes. O'Connor and the rest of council voted against them, though some of the same ideas made it into the city's recovery plans in 2004. In the end, Peduto still voted for Murphy's 2003 budget, while O'Connor voted against it.

O'Connor's claims that his gregarious personality will mend the city's rocky relationships with budget stakeholders are difficult to verify.

William Peduto

Peduto was the first city official to say Pittsburgh should apply for distressed city status under Act 47. Others dismissed the idea, saying it would stain the city's image. He repeatedly warned against refinancing city bonds to balance budgets and clashed with municipal unions -- especially the firefighters union -- over his calls to restructure city government.

Peduto is proposing a full-scale change in the city's budgeting methods, adopting an "outcome based budgeting" method that has been used by state governments such as Florida and Washington. Governments first identify their most important initiatives -- such as parks or police protection -- allocate their taxes and other resources according to those goals, and regularly benchmark their implementation.

The budgeting method "is a move away from the special interests to the general interest of taxpayers ... completely overhauling the way we do budgeting in this city," Peduto says.

Peduto supports the Act 47 plan and wants to lower the parking tax, but says "one-time gimmicks" cannot be used to replace the lost tax revenue. He said he would appeal to the state for revenue help.

Analysis

Peduto was one of five City Council members who consistently voted to implement the Act 47 plan and has taken much heat from city unions. He told reporters that they are the "special interests" fighting budget change.

Peduto's East End council district is not heavy with city workers, particularly those in the vocal police, firefighters and Teamsters unions, and Peduto and his council predecessor Dan Cohen have long tangled with them.

Most studies of outcome-based budgeting -- often called "performance-based" budgeting -- on the state level say it takes about five years to implement. It takes a while to develop the goals, to figure out how to track them and to restructure city departments. There would be pressure against the idea from city department heads or City Council members, whose initiatives could be passed over.

Yet it should be easier and quicker to restructure a city budget than a statewide one. Also, if the candidates are serious about consolidating city and county services, which will also take years to implement, it could be the perfect time to completely restructure the city's budget, too.

Peduto's stand against budget "gimmicks" to replace parking tax hikes, relying instead on state help, may not be any more successful than the Lamb or O'Connor plans.