Sunday Forum: A real solution to the city's financial problems
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City leaders are constantly searching for additional sources of tax revenue. A few years ago, in an effort to avoid bankruptcy, they enacted an unparalleled increase in the parking tax.
The latest discovery in the desperate search for money produced the unique idea of a 1 percent tax on tuitions. This would be paid by resident and non-resident students alike, and it would be unequal, depending upon the tuition of the school chosen by the student. Pittsburgh would have the distinction of being the first city in the nation to enact such a tax -- hardly a welcoming statement to prospective students in a city that proclaims itself as having become one of the great higher education centers in America.
If an idea is universally despised, it is usually wise to consider a different solution. It is not surprising that students and their parents hate this idea. Nor is it surprising that the colleges and universities view this idea as unfair to their present and prospective students.
It is surprising that the mayor and members of City Council have announced that they also hate this idea though they immediately qualify their disdain by adding, "But we have to do something." After all, the pension debt shortfall must be addressed.
When you are running out of people and things to tax, the city certainly has to "do something," but our leaders have overlooked a highly preferable "something."
The tuition tax, even if determined to be legal, would be another Band-aid. A permanent solution is necessary.
No solution should diminish support for Pittsburgh police, fire or emergency medical services. Nor should it affect road and street repairs, snow removal or other necessary services. Any threat to diminish such critical services is unconscionable. But the essential solution is not to tax more; it is to spend less.
When Pittsburgh was confronting bankruptcy, the then-mayor and council adamantly insisted that further spending cuts were impossible since they had already cut "to the bone." Nonetheless, the state-appointed Intergovernmental Cooperation Authority, which oversaw the budget, insisted on millions in additional cuts. The additional cuts were made and the city avoided bankruptcy. The ICA, however, emphasized that the city's continuing financial crisis demanded a permanent solution.
The city is now confronting another budget crisis. The permanent and inevitable solution is the total elimination of all duplicative functions between the city and Allegheny County governments. The pledge of the city and county to achieve this goal has demonstrated preciously little action.
Any redundant offices, departments or functions of the city and county should be eliminated. "Any" means "any." This solution, therefore, requires the elimination of the offices of the mayor, City Council and other superfluous or duplicative offices or departments.
The historic change in county government 12 years ago created a chief executive of Allegheny County and a non-salaried County Council. In light of that change, and recognizing the city's financial plight, the late Bob O'Connor was asked if he would be content to be the last mayor of the city of Pittsburgh if that was in the economic interests of the city. His emphatic response was, "yes."
The city should have appropriate representation on the non-salaried County Council and a professional manager, similar to a borough manager, working under the authority of the county chief executive. This should not affect city services or those of any other municipality in Allegheny County. It would not cast the burden of city debt on the county because it would save most of what the mayor and supporting council members expect from a tuition tax to defray that debt. Moreover, it would be a permanent solution.
For those who feel compelled to respond that the total elimination of duplicative offices and departments would not result in such significant and permanent savings, please resist. Like watching the magician place the bunny in the hat, we have seen the numbers.
This solution would make Pittsburgh and Allegheny County co-extensive, just as the city and county of Philadelphia are co-extensive. Pittsburgh's 300,000 residents would increase to 1.2 million. It would no longer be 59th in the nation and a distant second to Philadelphia in Pennsylvania.
This solution would have no adverse effect on the other municipalities. The only difference would be the elimination of waste.
When Pittsburgh is called the "most livable" city, the title is not conferred only on the city. It belongs to the Pittsburgh Metropolitan Area of Western Pennsylvania, which includes Allegheny and adjoining counties. Eighty-seven percent of the residents of this "most livable" Pittsburgh (more than 2 million) do not live in the city.
Notwithstanding its declining population, however, the city is vitally important to everyone who lives in Western Pennsylvania. Hundreds of thousands of non-residents enter the city each day for work, education, medical services and other purposes. While the non-resident workers, like the resident workers, pay a "local services tax" of $52 per year, it is unfair for a city population of less than half of what it once was to bear the heaviest burden of the ever-increasing cost of basic city services while continuing to pay for unnecessary offices and departments.
Nonprofit city institutions should share the burden in a fair and reasonable fashion, but they justifiably resist contributing to further waste and Band-aid solutions. If all waste and duplication were really eliminated, including the elimination of the offices of mayor and Council, voluntary payments from the nonprofits to supplement those savings would clearly be sufficient to provide a permanent solution to the city's financial crisis.
It is time to surrender vested interests and focus on the best interests of the residents of the city and the tens of thousands who enter the city every day. It is time for our leaders to announce their support for the elimination of superfluous city offices, including their own offices, for the benefit of the citizens they were elected to serve.
City leaders have made repeated calls to end state oversight of city finances. That oversight again proved necessary in the most recent budget proposal, which the ICA rejected. The ICA would no longer be necessary, however, if city leaders demonstrate the courage and will to adopt the obvious permanent solution.
First Published December 13, 2009 12:00 am