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The county's budget should be tight
But its financial problems are not nearly as severe as the city's
Wednesday, February 20, 2008

A recent front-page story in this newspaper ("County's Financial Future Debated," Feb. 12), contains accusations that Allegheny County Chief Executive Dan Onorato is "obsessed" with freezing property taxes because of his "obsessions with becoming governor." If only more politicians were afflicted with a personality disorder that would drive them to not raise taxes.


Charles P. McCullough , R-Upper St. Clair, is an at-large member of Allegheny County Council (mcculloughlaw@hotmail.com).

The charge that the failure to increase property taxes is "at the root of all the county's financial problems today" echoes Jimmy Carter's lament of a "malaise" in the 1980 presidential election and Walter Mondale's woeful cry for a tax increase in 1984, and it rings as hollow today as it did back then.

Allegheny County is not on the brink of a financial disaster, nor anywhere near it. One need only to look at the county's bond rating and reserve balances, both of which have remained unchanged for the past four years, for proof that the suggestion that the county's fiscal affairs mimic those of the city of Pittsburgh is simply incorrect.

The county's finances, as well as those of any governmental entity, should be "tight." Governments are not businesses and their constituents are not to be taxed so that "profits" are generated. To believe otherwise inevitably leads to larger government and wasteful spending.

On the contrary, conservative economic doctrine teaches that taxes should be cut to fuel economic growth. Taxes should be raised, or new taxes imposed, only as a last resort and after considerable public debate. The revenues generated from such taxes should be parsimoniously expended. Hence the vigorous, and for the most part, healthy debate over the county's new drink tax.

Although not fully articulated, Mr. Onorato has clearly bought into this approach. He has continually preached that increasing property taxes or conducting periodic reassessments would place Allegheny County at a competitive disadvantage with neighboring, lower-tax counties. Given the marked population loss in the county and in Pittsburgh since 1960, it is hard to argue that point. However, as we have learned at the national level, freezing or cutting taxes without the accompanying fiscal discipline to reduce the size of government results in deficit spending.

While Mr. Onorato is undoubtedly banking upon an influx of gaming-related revenues and economic expansion down the road to sustain the county, the primary tangible benefit realized so far is the receipt of $19.9 million in gaming revenues earmarked for the Allegheny County Airport Authority. This payment was made towards the authority's outstanding obligation to pay the county $42.5 million for the construction of the airport.

While this use of the money was criticized by some, such criticism fails to appreciate the nature of the authority's obligation to the county and the appropriateness of using gaming revenues for this purpose. In fact, there is legislation now before County Council that would authorize the chief executive not only to recover the remaining balance of $22.6 million, but also to try to collect interest on this debt as well.

This is not to suggest that there are no fiscal issues that the county needs to address, especially in the interlude before the projected gaming revenues materialize or not. The county needs to recover what is rightfully owed to it by the airport authority. It needs to resolve the lingering controversy over the drink tax, an unfair, anti-growth, anti-business tax. It needs to consider alternative nontax revenues, such as user fees, including fees from revenue-generating tax-exempt entities such as universities, hospitals, health insurers and county-sponsored authorities, so as to have a broader, but shallower, revenue base. It needs to address its poor-performing authorities -- the Port Authority of Allegheny County, the airport authority and Alcosan being foremost among these. And it needs to be prepared to downsize government to match revenues if necessary.

Fortunately, the debate over the drink tax has spurred the introduction of various pieces of legislation in County Council to address these and other issues critical to the county. Hopefully, through the crucible of public debate and discourse will come solutions that will keep the county on solid financial footing for the foreseeable future.

First published on February 20, 2008 at 12:00 am