Mayor gives wrong answer to $52 question
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Mayor Luke Ravenstahl is making the biggest mistake of his young political life, one that could cost him the election in May.
If he doesn't reverse course, Mr. Ravenstahl deserves to lose. What he advocates is not something that Democratic mayors should do to the working poor, or the middle class either.
He still has time to change his mind, but right now Mr. Ravenstahl looks to keep Pittsburgh a place where every worker gets socked with a $52 bill in January, even if the rest of the state moves to a system that spreads that burden to $1 per week over the course of the year.
Senate Bill 157 would reform the emergency medical services tax that currently hits workers all at once. Under the proposed reform, workers would pay $1 a week, or $2 every two weeks, depending on the pay period. Employers would pay the municipalities the money at the end of each quarter.
That's how it should have been done from the beginning, but Mr. Ravenstahl wants none of this. He wants the city to get all its money in January. He wants to exempt Pittsburgh and the dozen or so other places that have been declared "distressed." That exemption would last three years. Without it, Mr. Ravenstahl says, the city would take a $6 million hit in 2007.
Others put the loss at $3.5 million to $4 million, for reasons I'll share soon. Either way it's around 1 percent of the city's $400 million-plus budget.
There's no doubt the city is in a tough spot. The economy long ago shifted from manufacturing to health and education, leaving Pittsburgh's largest employers paying no property or business taxes, and the state is mandating that the parking tax be reduced from 50 percent to 45 percent, too. That's another $5 million hit, and don't look for private garage operators to pass that money to commuters until God repeals the law of supply and demand.
None of that means it's OK to solve those problems on the backs of working stiffs on one bleak payday every January, as has happened the past two years. When workers find out that their peers in about 700 other municipalities in Pennsylvania can spread their burden over 52 weeks, they're not going to like it, no matter what their income.
The mayor points to the exemption for workers earning less than $12,000 a year, but that still requires paying $52 in January and filing for the $42 refund the following year. No matter how speedily the city returns the money, most will have been hit for a second $52 before getting the first $42 back.
The good news is that the city already has budgeted to absorb the new, fairer system. It assumes a $6 million shortfall in the tax next year, followed by $3 million thereafter. The high initial number is because quarterly payments mean only three-quarters could be paid in 2007, with the last quarter paid in 2008. Thereafter the shortfall comes from workers changing jobs during the year and not paying the full amount.
I asked Councilman Bill Peduto, an undeclared candidate for mayor but a sure bet to run next year, what he thought about keeping the $52 January hit.
"It's regressive to put it in one lump sum and everyone understands that,'' Mr. Peduto said. "The people it hurts the most are those that earn the least. If there is any financial pain to the city, it's much greater to those on a low income.
"We should not be fighting this [reform]. We should be looking for a progressive solution.''
Sure, that's easier to say when the buck doesn't stop with you, but it's still the right answer. Mr. Peduto, like Mr. Ravenstahl, thinks a tax based on a percentage of income would be fairer, but the state isn't contemplating that.
A legislative conference committee is discussing this reform bill in Harrisburg tomorrow. If Mr. Ravenstahl is lucky, the draft that includes a special exemption for Pittsburgh won't be approved. That not only would be good politics, but good government, too.
The city might be looking at a bad hand, but you don't attract jobs by making 52-pickup a game unique to Pittsburgh.
First Published October 22, 2006 12:00 am