The city of Pittsburgh and its private sector collaborators are preparing to go to Harrisburg with a fiscal proposal likely to include a local services tax hike, spending cuts, water system privatization, university donations and pension reforms, Mayor Luke Ravenstahl said Thursday.

"There is, I think, at this point, unanimous belief and support that new revenue is needed," Mr. Ravenstahl said after a two-hour meeting with a panel of government, business and university leaders that is seeking a solution to Pittsburgh's budget challenges. "The [$52-a-year local services tax] is the revenue stream that has been focused on," and discussions are zeroing in on whether the city should seek state approval for a higher flat rate, or a percentage-based levy.

Not everyone on the panel, let alone in the Legislature, is sold on a tax change.

State Sen. Jane Orie, R-McCandless, "has not signed off to a tax increase," said her legislative aide, Nate Silcox, who participated in the meeting by phone. "Her entire focus has been on controlling costs, putting forth savings, looking for any innovative idea that can help the city of Pittsburgh."

Mr. Ravenstahl said he's willing to "take a look at anything and everything, really, that the different caucuses want to talk about." That includes privatizing the Pittsburgh Water and Sewer Authority and linking future state aid to the city's ability to cut spending.

He noted that past proposals to shift the local services tax -- levied in many municipalities -- from a flat rate to a percentage have failed in the General Assembly. But he didn't rule out trying that tack again, noting that in Philadelphia, commuters pay nearly 3.5 percent of their income to the city. A 0.3 percent levy on everyone who works in Pittsburgh would be around one-twelfth as onerous.

A percentage-based tax would also reduce the burden on low-income workers while hitting big earners harder. It's "a more progressive model," said council finance Chair William Peduto, adding that he has long supported it.

State Rep. Dan Frankel, D-Squirrel Hill, a member of the mayor's panel who could not attend the meeting, said he could support such a change in the tax, but it would have to be part of a broader package.

State Rep. Mike Turzai, R-Bradford Woods, participated in part of the meeting by phone.

"There needs to be commitment to privatization efforts, and there needs to be commitment to reforms going forward for city employees," including changes in pension benefits, Mr. Turzai said. "Those have not been addressed. Until those are addressed, we're all in a positive discussion," but not a position of consensus.

Mr. Ravenstahl said his administration wants a restoration of a lapsed state subsidy, which was at one point $10 million a year, and would be willing to make that contingent on spending cuts.

He said the panel favors changes to state pension law that would keep some public employees from "spiking" their pensions by working lots of overtime in the last years of their careers. He has long pushed for a shift toward defined contribution plans, instead of pensions, for new employees, and the panel supports that, he said.

The panel was put together to find an alternative to Mr. Ravenstahl's failed tuition tax plan, which was in turn driven by the need to raise $15 million a year to bolster the city's troubled pension fund.

The mayor said the city is now "looking for in the neighborhood of $4 million a year from [tax-exempt institutions] in a more defined, structured commitment" than the three-year donation pact that existed from 2005 through 2007.

University of Pittsburgh Chancellor Mark Nordenberg and Carnegie Mellon University President Jared Cohon attended the meeting, and left saying the panel was making progress. Their universities, however, did not confirm any agreement to raise $4 million for the city.

As yet undecided: Whether to approach the General Assembly next month, and whether to seek a Pittsburgh-specific package, or one applicable to municipalities statewide.

"It's a matter of the atmosphere or willingness in Harrisburg, and as we know, that's always a moving target," Mr. Ravenstahl said. "But I think we're ready."

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