Archive for August, 2011
Thursday, August 25th, 2011
Everyone reading this knows that Pittsburgh is a city with financial problems. Pittsburgh has been in Act 47 distressed status and under the watch of two oversight boards for over six years now. While it’s easy to cast blame, what we often don’t think about is how our city compares to cities in the rest of Pennsylvania. When you take a real look, you not only find that we are far from alone, but that the pattern of financial woes is not only all to familiar, but how much these difficulties are structural in nature.
The Pennsylvania League of Cities and Municipalities (PLCM) was set up with a mission to “serve local governments by providing programs, cost-effective services, and legislation which strengthen the autonomy of Pennsylvania municipalities.” A year ago the League created the “Core Communities in Crisis” task force to develop a strategic proposal for the new Governor and administration in 2011 regarding growing municipal fiscal challenges. The committee consists of 28 elected officials from every region of our state, including Pittsburgh City Councilman Bill Peduto. You can read their findings here.
In June of this year, Lancaster Mayor J. Richard Gray (who is also a member of the task force) released a report by Lancaster’s Municipal Finance Task Force titled “Prosper or Perish: Financing Local Government Services in Pennsylvania.” While the report uses Lancaster as its case study, the problems it identifies are the same in city after city statewide. An editorial in the Erie Times-News noted as much and the problems listed are ones with which Pittsburgh is well acquainted:
“It’s striking how closely the circumstances outlined mirror those in Erie. What’s wrong is no secret, here or there.
The report acknowledges the case it’s making isn’t new and applies to communities throughout the state. What’s different now is that the cumulative damage threatens to send Erie, Lancaster and other cities into a disastrous, accelerating downward spiral of increasing taxes, declining services, urban blight and suburban flight.
Preventing that requires a wider understanding that in general the decline of Erie and other cities hasn’t resulted from mismanagement, and that their elected officials can’t cut their way out of it. The game is rigged against cities, and only changing the rules will help.
The targets for change identified in “Prosper Or Perish” will be familiar to anyone who’s been paying attention:
- Excessive reliance on the property tax, an issue aggravated in cities by the prevalence of tax-exempt property.
- A system of binding arbitration for police officers and firefighters that doesn’t account for a city’s ability to sustain the costs imposed and that routinely awards pay increases and benefits wildly out of sync with the rest of the economy.
- Fragmented, duplicative local governments that combine with a regressive tax system to leave suburban residents, who are more affluent on balance, shouldering less than their fair share of a metropolitan area’s costs and challenges.”
Sadly as another editorial, titled “SOS,” on LancasterOnline observes:
“Unfortunately for Lancaster, virtually all of the reforms are beyond the city’s control.
The task force, composed of business leaders, says small cities need a menu of tax options to reduce overreliance on property tax revenue. Only the state Legislature can do that.
And, the report says, the contract arbitration system for police and fire unions has to be rewritten. Again, a job for the Legislature.
The report calls for revenue sharing with federal, state, county and tax-exempt property owners, meaning, among other things, that other government offices would contribute a fair share toward the cost of services provided by the city. Lancaster can’t force any level of government — or any nonprofit agency — to cough up the cash.”
“Prosper or Perish” recognizes this and issues a call to action:
“The time has come for Pennsylvania’s legislature to change the rules by which communities finance their local services. Local governments are forced to operate with a fiscal system that is, at best, irrational and, at worst, dysfunctional; a system that effectively deprives locally elected officials and the people they serve of the ability to be the architects of their own communities and their own futures.”
You can read the full report online here.