The Pittsburgh Comet: 2009-06-14

Tuesday, June 16, 2009

In Russia, Act 47 Coordinates You!

Alright, enough joking around. Pittsburgh is in a real pickle.

The city's original Act 47 5-Year Recovery Plan passed under Mayor Tom Murphy as we first became a Distressed Municipality expires on Tuesday June 30th.

The Act 47 Coordinators' and to an extent Mayor Ravenstahl's new proposed 5-Year Plan is not popular at all -- yet any attempts to revise it will be significantly hampered by the bureaucratic complexities of Act 47 itself, not to mention problems of politics and communication among city leaders.

Though the City's mandatory costs are increasing, and will take bigger and bigger chunks out of our budgets for years to come, the Coordinator's plan offers no solid options for raising revenue to cover for this -- outside of distinctly local tax hikes in the wage, property, real estate transfer and parking categories. All of these taxes are already considered extremely high.

Options which would broaden our tax base (i.e. the non-profit payroll preparation tax, commuter tax) are essentially off-the-table. Initiatives to create statewide cost-saving strategies (e.g. public pension and public health care consolidation) go unmentioned and seem to be garnering little attention. The long-term leasing of the city's public parking garages are held out as the city's best hope of salvation, but this has two major problems: the Plan would have go into effect before we can be assured of those revenues, and any infusion of cash which may result would eventually evaporate further down the road.

Council members are hesitant at best to approve a 5-year Plan that appears to fix nothing, provides little in the way of capital budgets, raises taxes in a tax-rich environment and leaves Pittsburgh facing undiminished or even heightened problems in another five years.

However, the date of June 30th appears to coincide with the opening of contract talks with the city's public safety unions. It has been alleged thus far without argument that if Pittsburgh has no Recovery Plan in place to alter the state's ordinary collective bargaining procedures on July 1st, then when contract negotiations "begin", biding arbitration under Act 111 which must ignore a city's capability to pay for increased benefits would commence. Pittsburgh's long-term costs and obligations would shoot up even higher than we find them today.

As a public service, the Comet presents this video to convey the seriousness of what has been occurring and what is likely to occur if the issue of JUNE 30th is disregarded or fumbled. Warning: Strong animated violence. Viewer discretion is advised:

I say we worry about the guy at the top.

THE COUNCIL POLITICS:

Tonya Payne and Darlene Harris never greatly appreciated the restrictions Act 47 placed on the City. Payne has already said, "I came in saying no, and I'm going to go out saying no." Newcomer Theresa Smith's strong labor ties and short public statements in the debate thus far probably put her in this same camp for now. Veteran Jim Motznik has offered slightly more nuanced positions on Act 47 in the past, but on the whole he has been a skeptic and a critic of state oversight.

That's four out of nine who are unlikely to approve the Plan -- and may not fear the scary consequences if a fifth vote climbs aboard.

Bill Peduto has been a champion of state oversight, but he is not enamoured of this plan before him. Doug Shields has been mercurial on the issue, but he similarly does not look forward to holding his nose and swallowing a mediocre plan unless Mayor Ravenstahl publicly and forcibly puts his own political capital on the line to defend it. No reason not to put Bruce Kraus in this category until we learn otherwise.

Ricky Burgess is the only member thus far to urge passage of the plan by June 30th. By my score it may already be 1-7 FAIL, but let's say the latter camp caves in or is assuaged and it becomes 4-4 TIE.

That leaves Patrick Dowd -- who has said already he "will not vote" for a Plan that will increase taxes, who indicated that he looks forward to grilling the Mayor on the issue of performance measures and audits called for and unimplemented in both the old Plan and the new one, who still owes Mayor Ravenstahl an apology for having accused his administration of corruption, and who made an extended reference to the 1964 Cold War classic Fail-Safe with Henry Fonda while discussing Act 47.

In Fail-Safe, New York City is destroyed in order to avert a full-scale nuclear war precipitated by a simple human error and far too much power invested in systems and machines.

RECOMMENDATIONS:

I've been sprinkling these snowflakes throughout my own comment sections. Here they are again in case anyone is interested:

Council will have to make clear that the current proposed Recovery Plan is a non-starter as soon as possible -- because it is, and because that's the responsible and productive thing to do. But just as emphatically it should implore the Coordinators and if necessary the Secretary to craft a solution that takes care of our June 30th / Act 111 problem for a set, reasonable period of time.

There may very well be as many as 8 votes to accomplish this: between the populists who see no light at the end of the Act 47 tunnel, and the progressives who are frustrated by our recovery methods.

No one wants to see the Pittsburgh situation shake up abruptly and needlessly, without all due diligence -- which is exactly what will happen if the present Plan goes up for a vote.

There'd be no reason for the overseers to apply sanctions in the short term. There are a variety of good ideas on the menu we can engage them on, of which possibly only one or two require state action. It would be best to hone in on only the most ripe. We're very close. That's what you say, right? "We're very close".

Seeing as how we are all being productive, a protracted discussion about why the Plan was presented when it was, the efficacy of prior 'budget hearings', and how we came now to be scrambling near the last minute should be strenuously avoided. If there is bait thrown out it should be avoided to the extent that it can be.

The municipality and its leaders should amend for the purposes only of abbreviating some of the City's authorizations for implementation and for delaying others, obtain the Coordinator's consent, PASS ACT 47, and negotiate hard for necessary and equitable solutions at least until November!

That is...

I think another possibility to avoid the June 30th drama could be passage of a short continuing resolution-style recovery plan that buys more time before locking us in.

3 stabs at saying the same thing. Now to some counterarguments:

I understand the inequities of [Act 111, by which public safety employees ordinarily enjoy outsized collective bargaining leverage as compared to other union employees, to nonunion employees and to taxpayers] and I don't like them. However, neither do I like the idea of lingering without initiative in Distressed Municipality status so that we can keep certain employees in perpetual disadvantage as compared to their counterparts all over the state and much of the country. It just doesn't seem good for business.

So I guess you could say I'm only in favor of Act 47 if it's making itself worthwhile by hastening the day we can leave it. Efforts to amend or repeal Act 111 should be done in its own arena.

I imagine the above will continue to be my Foremost Guiding Principle until at least June 29th -- and maybe even after that. It's got a nice beat.

Economically, I think Pittsburgh needs the non-profit tax (I think a freeze or a bump in the parking tax is easy) but politically we CAN'T AFFORD to pursue the COMMUTER TAX. It's political poison. Shut it down. People don't want to see it, don't want to think about. The complaints are visceral. Relax and in 5 years we'll come back with one scaled to income. Meanwhile, tax UPMC et al and party.

Meanwhile, since we may only be able to pick one thing on the menu, we need statewide pension management -- the right kind of pooled statewide system, adjudicated by a complex and cleverly selected board

-- AND we need to reach a consensus on which of our four city taxes we are going to raise, to demonstrate seriousness and oh yeah to raise money. I say parking or property. Yes I said property. Other municipalities in our own County are paying higher property taxes, we can't very well argue we can do different.

If Pittsburgh is asking to be allowed a period of extraordinary negotiation, it would help to have a useful-seeming new negotiating position. That was my attempt at one. I think at the very least it describes the kind of thinking and horsetrading that will be necessary.

5 Year Plans only get to be negotiated once every 5 years. That's a long time to live under something that again fixes nothing, that does not change our economic fundamentals and that exposes us to huge risks.

Why take a knee?

Thoughts?

Monday, June 15, 2009

Burgess: Council Hasn't the Power **

Councilman Ricky Burgess released a legal argument that City Council lacks the authority to develop its own Act 47 Recovery Plan ~~unless the municipality first rejects the Act 47 Plan before it -- and even then it's tricky~~.

*-CLARIFICATION: The office of the Rev. emphasizes that its argument in the letter applies to all distressed Home Rule Charter governments, of which we are one. This is what we attempted to communicate in reporting, "and even then it's tricky".

CONTINUING: I'm not so sure the case is airtight -- you go decide. I know City Solicitor George Specter declined to spell out anything like it upon repeated questioning during Wednesday's Council session. However, Specter did offer a warning that the matter could bring about litigation.

Burgess also included a note in return correspondence for the legal counsel of Joe King, President of the firefighters union:

I am sure you are well aware of the financial impact to the City if this Plan fails to be adopted, by Ordinance, by June 30, 2009. This would likely be fortuitous to your client, but it would undoubtedly lead to far greater cuts across the scope of City services, and employees not protected by Act 111 in addition to years of protracted litigation. This would create financial hardships that would not be experienced by police and fire employees.Instead, the pain would be borne by the City’s non-fire and non-police employees, its residents and taxpayers. (Burgess)

That is extremely informative stuff -- extremely -- but it has little to do with the legal argument surrounding the Council's authority, and the Municipality's legal ability to pursue a full range of options.

**-UPDATE/RESOURCE: Here, for now, is State Act 47. Sections 244 through 249 are immediately relevant, though definitions, categories and legislative intent may exist elsewhere throughout the document.

Open publication - Free publishing

Photo Credit: Pittsburgh Courier

PITTSBURGH PENGUINS

2009 NHL Stanley Cup Champs

How did these guys get such a prominent position in the parade? They ducked under the rail! QUACK! QUACK! QUACK! Give them a call, their number is on the side of the boat. (If you click the link, prepare to duck and cover!)