Keep the oversight: Pittsburgh still needs the help of the Act 47 team
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Timing is everything, and when it comes to releasing the city of Pittsburgh from oversight by its Act 47 state coordinators, it's not time.
The overseers have recommended that the city's designation as a fiscally distressed municipality be erased, and they are correct in pointing to the considerable advancements Pittsburgh has made in the nine years since it teetered on the brink of bankruptcy.
Mayor Luke Ravenstahl's administration negotiated cutbacks in city union contracts, council raised the level of funding in the city's pension plan, and the city reduced debt by $300 million and improved its bond ratings -- all without raising the property tax. But we can't overlook the role of the overseers -- both the Act 47 team and the Legislature's duplicative creation, the Intergovernmental Cooperation Authority -- that held the city's feet to the fire.
Despite this progress, serious concerns persist. Although the city now has a fund balance of nearly $60 million, that's significantly lower than the recommended $80 million. This year's budget is balanced, but there was a small deficit in 2010 and, in 2011, the city managed to end with a surplus only because of two unusual bumps worth $20 million -- half from backlogged casino revenue and half from a special state contribution to the pension fund. Pittsburgh must establish a consistent pattern of balancing revenue and expenditures without relying on one-time windfalls.
Then there's the political calculus of removing the Act 47 designation. Even advocates for doing so say it's important for the city to have some oversight; they'd just prefer it to come from the ICA. We don't trust the move, given the prospects for political mischief because its members are appointed by Harrisburg lawmakers.
More significant is that Act 47 oversight would go away just as the campaign for mayor, and some seats on council, kicks off. It's impossible to know for certain how a new administration -- whether it's a re-elected Mayor Ravenstahl or a challenger -- might handle the newfound fiscal freedom at the start of a four-year term. One item on the agenda in 2013 is health-care coverage for city firefighters, and Pittsburghers still have a bad taste in their mouths from the generous deal that former Mayor Tom Murphy made with the fire union in 2001 that assured his re-election -- and pushed the city closer to a financial cliff.
With fiscal pitfalls still looming and impartial observers believing that the ICA should remain on the scene, it's hard to see how Act 47's mission is accomplished. There is no downside for Pittsburgh to letting more time pass before making the momentous decision to remove oversight.
First Published October 26, 2012 12:00 am