Saturday, December 12, 2009

Pittsburgh Promise Again Rears Homely Head [*]

For background on the universities' joint "No" letter, read the P-G's Schackner and Blazina and the Trib's Brandolph.

After delineating various reasons why they think the Student Tax is not ideal and how the Mayor has been less than perfectly constructive:

On the basis of those subsequent discussions and serious reflection, PCHE will not accept your demands. Among the issues your demand presents are the following:

a. When you solicited significant contributions to the Pittsburgh Promise from the non-profit community, you significantly diminished that community's capacity to support the City, a fact that you have acknowledged on other occasions.

That was point "A".

I am reminded of when the Promise's funding was rolled out, and um, it hit a snag, because UPMC had been quietly assured of receiving conditional tax credits from the City for its donations. One council member pointed out that giving to the Promise was not the same as contributing to the City of Pittsburgh, its infrastructure and its obligations; it was rather like giving to Toys for Tots. We are now seeing one way in which officials' energies poured into the Promise seem to be detracting from the core missions of city government.

*-UPDATE: Vannevar has some fun with this: LINK.


  1. Well Duh, I said this in an earlier comment I can't find right now.

    It was clear that the UPMC contribution to The Pittsburgh Promise was taken from funds that could have gone into the general fund.

    Starting this aggressive new project at a time Luke should have known how fragile the city's budget was totally crazy.

  2. This is a quote from an earlier post of yours.

    "This is a first step towards handling the non-profit conundrum the way cities like Boston handle it: "Contribute payments in lieu of taxes (PILOTs) to local governments in a significant amount, and on a long-term basis -- or you don't get to build, expand and play like you're accustomed."

    We really need to talk about how so much city land got in the hands of non profits, and on a wider level to other non tax paying or very low value land uses, like parking, highways, stadiums etc...

    Haven't big non profits used eminent domain to aquire land?

    Do we really have to ask why the city is broke?

    There's a study out about how anti walking policies and sprawl have made places-- "Dangerous by Design".

    Pittsburgh is Insolvent by Design.

  3. I am concerned that the continued fundraising efforts for The Promise will be affected by this student tax issue. Isn't everybody sick and tired of the shortsighted-ness that gets us to these points? Insolvency? Legacy costs? Other than medical, university and businesses who have remained firmly grounded here as home, we are more Mayberry than Mount Pilot. Too bad we didn't start thinking in those terms sooner.

  4. I may have missed it, but has there been any attempt to cost out the full "contribution to city ecology" that the big non-profits and their employees/consumers (students) make? How much in city taxes do employees/students pay? How much services do they actually consume and what types primarily? Just to understood the footprint here better.

    That latter seems like something that a few resident geni at CMU and Pitt could figure out how to crowd source. Create an app for every time one uses a city service and let's quantify this. Much better use of time than signing up for anti-tax Facebook pages.

    And speaking of crowd sourcing, what's stopping all of us from working together to figure out a way to help lower the long-term health costs associated with disability rates among pensioners? Maybe build a model that offers bonuses to pensioners for getting healthier (while not altering the basic underlying cash pension they are entitled to receive). Then work with our big mostly non-tax paying health care non-profits to help pensioners get/stay healthier. It's not like we don't know the communities where our old firemen, cops and municipal folks live (many outside the city).

    This year, in lieu of a playoff season at the local Stillers Nation bar, we could engage the diaspora to connect with their local retired fireman, cop or municipal retirees to manage their wellness better.

  5. If the city wants to play it that way, the non-profits may as well offer to pull funding from The Promise in order to pay the $5million. Let Ravenstahl take that hit. Since it's such a voluntary sort of donation to Toys for Tots.

    Democrat politics at their worst- Demanding that things are given up at others' expense and acting entitled to it later.

  6. Luke Ravenstahl should be kicked off the board of the Pittsburgh Promise. I said so at the last months public hearing before Mark Roosevelt and the PPS School Board. He is in the same boat but seemingly rowing in the wrong direction. Toss that tax -- and those that cling to it -- overboard.

    Ceremonial Splash Desired.

  7. Truth be told, the idea above of getting pensioners to get/stay healthier is grand, in that I'm all about wellness. However, it works more to the city's advantage given its bloated budget to have them go 6-feet under. The longer the life, the more the payout.


  8. Mark: that's an empirical question, as they say.

    Left out of the original formulation is the fact that the way things are configured it's basically in somebody's business interest health care wise to maximize the use of health care services, not keep people healthy.

    I don't know the specifics of the health plans that pensioners receive, so my contribution to the model stops about there.

    But look up the 30-day rehospitalization rates of nursing home residents in the area - a lot of those are preventable.

  9. Is this where we get to say to Luke, Roosevelt, and the "foundation community" I told you so??? My favorite was the TV clip on election day, with a black woman asking Luke why she should vote for him, and his answer was "the Pittsburgh Promise." In Luke's mind Pittsburgh Promise = black votes for Luke. The sidebar agreement with UPMC signed by the City and the School Board NEVER should have happened. Unfortunately, "I told you so" never feels good.

  10. Anon 12:36 - The "sidebar agreement" was never consummated, at least not with the City, thanks to public outcry and a majority of Council. (Not certain about the School Board.) However the fact that it was part of the original plan did nicely illustrate some things about the new scholarship program.

    I think the Student Tax proposal has garnered more negative national press in this short span of time than the Pittsburgh Promise has ever generated positive headlines. I wonder, has anyone yet spoken with anyone who has moved to the City to take advantage of the Promise?

  11. The empty house next to mine (or perhaps next to yours) holds all the families that have moved to Pittsburgh because of the Pgh Promise.

    To be sure, there might be a dozen families that have been able to opt to public school rather than private school because of it. But, that might be the extent of the migration rate to date.

    - -
    I too am without many specifics of the the specifics of the health plans that pensioners receive.

  12. There is a process by which normally all the hard numbers, cash flows and financial projections are ironed out.
    It's called-- Bankruptcy. Does anyone really doubt we qualify or that any remotely honest process can happen without it?

    Too many people have too much incentive to lie and tape together phony fixes pushing the inevitable reckoning further down the line.

    Ironicaly, I think the bond markets will react favorably to the honesty in the long run.

  13. Bankruptcy has a judge. Judges and hostesty are not always known for being one in the same. Everything getting ironed out leaves me skeptical.

    Judges may not be favorable to the taxpayers.

    So, that becomes a decision of devil you know (and can sway) vs. one you don't.

    The one's who would need to choose to go down the road of bankruptcy give up all the power that they have presently.

    People in power don't generally choose a meat grinder for themselves.

    Politicians, overlorads, unions, pensioners and all those that get government money (i.e., Local Development Groups, URAers, sports teams, convention organizers, contractors, Allegheny Conference, vision statement wonks) are going to be against a push to bankruptcy.

    So, perhaps the matter of the city going to a bankrupt stage could be made into a ballot question?

    Time to punt.

  14. So, perhaps the matter of the city going to a bankrupt stage could be made into a ballot question?

    Before this get's too carried away. That might be a symbolic gesture, but legally meaningless. Barring even longer qualifications, Chapter 9 bankruptcy is very different from bankruptcy as you may understand it. It more looks at the cash situation of an entity and given there are the assets so highly advertised during the last couple elections it just isn't an option for now. There were points in the past... 1993/4 for sure... maybe 2003 which it might have been feasible legally, but not at the moment. So no, as long as they are currently paying their bills, we really don't qualify anytime in the immediate future. The long term problems are just not treated the same way for municipal bankruptcies.

    Down the road is another question.

  15. Everything in the region that is happening right now is towards one aim - City/County consolidation. Make no mistake, all sides are participating. Some knowingly and other unwittingly. State and suburban legislators and power players will do ANYTHING to deny Pittsburgh more sources of revenue. They want to starve the City of money to force consolidation. They will even go as far as introducing legislation to block revenue sources. They will also bring together "not for profit" entities to deny any payments to the City. Look at the trustees and boards of these groups and picture becomes clearer.
    On the other front, prevailing wage legislation, outrageous and burdensome zoning legislation will further drive business interests outside the City, hurting City coffers and isolating City politicians. Influencers from all walks of life are focusing on County issues, not those of the City. The promise is more example of money flowing to "anywhere but the City budget" mentality. The void of power and money making that sucking sound out of the City (along with its residents and tax payers) has left the void to be filled by labor and entitlement advocates filling up the seats of power on the fifth floor of Grant Street. This will only further expose the divide between City and County and speed up the efforts to end that divide through merger. Get ready, it is coming faster than you might think.

  16. Well, I don't know what to say.

    You guys are likely right which is why David Einhorn, is buying gold and many of the smartest players are predicting a hyperinflationary depression.

    Governments at all levels can't say no and are passing the buck along until the whole country will be destroyed.

  17. Anon 10:02, I would have to agree that alot of the reason for cutting off the city for finding any avenue for additional income is for the very reasons you state.
    It is happening, and many of the blogosphere is not aware yet. It is happening in back rooms, sneakily, but assuredly.

    Consolidation isn't the nightmare, the fact that someone thinks the county runs things better or is somehow more efficient, is the nightmare.

    The first place to look is The County EOC. The city, and whether the county recognizes it as such, is a city. The city is not served well by this consolidation regardless of who gives them a stamp of approval. No one will admit it, therefore no one will fix it. The truth is, it can be fixed, but to fix it, you have to admit that the CITY is a CITY and not a suburb, and the citys' needs are just a bit different. Recognizing that, would be a first step towards building confidence that any consolidation will be addressed in the proper light, and not merely treated as an opportunity to fill positions by political (who knows who) appointment instead of acknowledging experience and proper knowledge and education.

    When you cannot address the Emergency Side of consolidation properly, how can you trust that any other department or division will be handled properly?

  18. You guys are getting perfectly ahead of me! New post going up about now...

  19. I would tend to agree with you. The city would not be well served by consolidation.

    "The void of power and money making that sucking sound out of the City (along with its residents and tax payers)"

    I can't agree fully with this. The surprising thing is how resilient parts of the city have been. A lot of people and even small businesses see something special in the city and want to stay.

    There are also obvious synergies building between the colleges and the business community.

    That's what's so sad. With some grip on it's legacy costs and even more importantly with a better use of city land, zoning etc... things would be fine.

    The land use conflict is at the heart of things.

    Take the lower Hill which would obviously be improved by dense urban mixed use development and the removal of the stadiums, highway and of the street grid and tight transit oriented development.

    The same is true of the North Shore. But, now the surburban non city residents feel entitled to this parking space.

    More and more of the city is taken up by land use designed for people who might occasionaly drop by and this low value tax hole is at the heart of our fiscal problems.

    City/ county consolidation would only make this worse.

  20. I don't think city-county consolidation would make situations worse in the lower Hill or on the North Shore. The lower Hill will see re-investment and hopefully a dense mix of retail, commercial, and residential. I don't think transit-oriented development is needed there since you can walk. The North Shore has been parking lot city for decades, it is not a new phenomenon. Plus, a surface parking lot is a license to print money, so why give it up?

    The real problem with this 'merger' is that it is not a merger at all. It is just combining the city government with the county, while leaving every other entity in the county as independent as it ever was. This half-hearted merger is nothing more than putting a dress on a pig. Sure, its great of the city and county parks departments were run together but realistically, is that the way out of Pittsburgh's long-term mess?

  21. Yes, the North Shore has historically been a parking lot. But how has that been working out for us?

    The dead space on the North Shore is intimately connected to why there is only one Supermarket on the North Side and why it's been so hard to create dense development and a thriving downtown, which in turn is why the lower hill is dead-- and so on- which is why they need more parking.

    Each dead area lowers the value and potential use of property around it while raising the fixed infrastructure costs per person.

    Add up the taxes from the North Side and compare them to those from the Southside, to get an idea of the net effect.