Thursday, July 29, 2010

Let's Just Do the Tuition Tax 14 Times!

Opposition to leasing out our precious parking spaces -- which would raise over $200 million to pay for what the City has put off many times over -- is coalescing around a familiar theme:


  1. (Citizens) also expressed concerns over whether the mayor would accept a deal that would benefit him financially, through campaign contributions or if he chose to take a job with the chosen vendor after he left office.

    But the mayor insisted to a that the process has been transparent and REFUSED to commit to not taking campaign contributions from the chosen vendor.

    What a scumbag. Stay tuned.

  2. The tuition tax is so last year.

    We just need to encourage universities to double their rate increases and allow us to take half of it.

  3. Anon 7:43- Would it satisfy you if all eleven local electeds sat down and agreed not to take contributions from whoever turns out to be the high bidder? Or wait -- and all prospective political challengers in perpetuity?

  4. "They get their cut. We get our cut," said Scott Kunka, city finance director, parking authority chairman and pension fund executive director.

    Truer words were never spoken.

  5. Since the tuition tax was proposed, both CMU and Pitt have significantly raised rates and fees...nary an eyebrow raised. If you can cut a check to CMU for 40k+ a semester and you CAN'T help contribute to city upkeep, then something is wrong

  6. Regarding Kunka's're glossing over the fact that there will be increased revenue possibilities for the city. The lessor will develop ad strategies, put up ads, and give the city a cut.

  7. The part that I don't get...

    If the lease "take over" people are going to raise the rates that much, why doesn't the city just raise the rates a little less and cut out the middle man?

  8. Pgh_Knight- That is the other realistic option. The main problem is, we'd then still need to take out a massive bond now in order to gather all the money up-front -- only to pay it back with interest for years later. It means we assume the risk, which I think is higher than people realize, plus I'm not sure the city is outfitted to run so efficient a business that we will net similar profits by charging similar rates. But also, by going into debt, we hamper our ability to borrow for any other reasons. Much as we'd like to, it doesn't look like our infrastructure and capital needs can take another five years (or even two) without taking on some new debt.

    I remember when Mayor Murphy borrowed money in order to prop up the pension fund, everyone regarded it in hindsight as one of the most boneheaded moves ever, that really screwed the city's future leaders. This lease would actually be making a sacrifice, it's true! It's scary! In terms of a family budget, this is like selling off the 2nd car ... whereas the other path would be like taking out a 5th mortgage.

    I still don't see why it's essential for a city to subsidize DRIVING of all things in this day and age ... and although the impact will be greater than zero, I don't see what is the major problem of parking just a block or two off to the side of these neighborhood business districts. You'd expect them to scream bloody murder for any little thing, but I don't think this is quite the end of their world. Raising wage and property taxes, or "letting Act 47 come in and do what they want", would be a lot closer to the end of it all.

    I just hope people are being as critically skeptical of all the other options (1? 2?) as they are this one. I for one an impressed that this one calls for sacrifice in the present tense. That's why it's being so heavily assaulted.

  9. Something like this would never happen with Lukey's advisors running things, right?

  10. Anon 2:33- Right, I just noticed that link elsewhere.

    It sounds like you are urging that we not put any money into our pension fund through any vehicle whatsoever, because the people running it are sure to steal it. Better to let it go bankrupt or get taken over by the new Athens that is Harrisburg.

    This way lies madness, IMO. The fracker is going to be mayor until 2013. We have to do things.

  11. I once boasted that I had a license to run a power plant: 600 Megawatt.

    Female acquaintance, batted eyelashes and said "so does Homer Simpson."


  12. Bram: I love you man...

    Your grasp of reality.

    It is complex...Pension Shortfall was long time coming.

    Luke has placed issue in the transparency issues.

    For this he deserves credit. I do not, for one, do not believe that Quid Pro Quo , is part of plan: 2 years from now, perhaps.

    Murphy Bond Issues(2)... first applauded by PG.

    I never considered bond money as revenue...and my figures will attest to that.

    Merely restructured debt: as you understand.

    The Mayor did say @ Greenfield Meeting...he was receptive to all solutions offered by opponents.

    "Show Me The Beef!" or, so he meant.


  13. Bill Peduto apparently is scouring the internet 24-7 for ways to discredit this plan...I wish he'd put half that much effort into FORMULATING A BETTER PLAN, we'd have the thing solved by now.

    Ravenstahl is our mayor. He's not going anywhere for a while, no matter how much invective folks throw at him. Like him or not, he is giving the pension fund crisis the emphasis that it deserves - it is his top priority.

    Calling him names, posting NY Post articles of all the devil is that helping, I have to ask?

    Buying Bill drinks at Cappy's and getting off a few childish epithets does not constitute reform-minded government - it's sickening ego-massage. Why stroke the ego of someone who doesn't even want to run for Mayor, when the road looks a little tough?

  14. From a public policy perspective, what might be ideal is a flexible pricing system that would be designed to try to maintain a target occupancy rate (around 85% is often suggested) consistent with the goals of both parking availability and revenue-generation. To the extent information on pricing, and even the exact location of available spaces, could be provided in real time to potential parkers, that would be even better. And apparently San Francisco is investing $25 million in piloting a system along those lines.

    I point this out because while I provisionally support both market-rate pricing for parking and the City leasing these assets, I would hope any lease deal would at least make room for the possibility of instituting a system like this in the future (and to the extent it increased revenues/profitability, it should at least partially be paid for by the lease-holder).

  15. Well, well,well, isn't it pretty clear what's really been going on.

    The city of Pittsburgh is largely broke not so much because of it's unions and high costs (although they are a huge factor) and ceratinly not because it lacks good jobs. In fact the city has a high percent of the regions good jobs.

    It's broke because it is very small in land area and has bent over backwards to subsidise people who chose to work in the city and live out of town.

    If the projected parking rate increases are viable, they will show the size of the subsidy. Taken out of the hides of current and future city residents.

    Why does Hong Kong have a for profit transit company that makes huge profits as a real estate developer? (google MTR LTD) They do not subsidise parking!

  16. Ooops, It's actually MTR Corporation LTD

    "From a public policy perspective, what might be ideal is a flexible pricing system that would be designed to try to maintain a target occupancy rate (around 85% is often suggested) consistent with the goals of both parking availability and revenue-generation. To the extent information on pricing, and even the exact location of available spaces, could be provided in real time to potential parkers, that would be even better. And apparently San Francisco is investing $25 million in piloting a system along those lines."

    That is correct. If rates go up, they are actually only likely to do so during certain peak hours.

    Many studies have shown just how much traffic is caused by people looking for a free or cheap space. And once they have it, they don't give it up. This is a huge reason why parking in NY is so difficult. a relativel small number of people have cars, but those who do, never give up their parking spaces. (I think there's a Seinfeld episode)

    Pricing parking rationally will fill spaces with the people who really want and need them. Likey, it will have the effect of having more people look for alternate options--including ditching their cars entirely.

    I have not followed the details (partly beacuse, everything in politics is in flux) but why sell them with any strings attatched at all?

    Suppose, an owner decides the space and building can support more stores--isn't that good? Ditto with advertising.

    Suppose, even better that in a few years, attitudes and demand has changed and the owner decides more money can be made by tearing down a garage and building apartments, retail or offices. Would that be something we would want to prevent?

  17. By the way, isn't that generally what has happened on the South Side? Murphy signed a deal foolishly limiting the amount of potential housing near the South Side Works. Now, it's clear the real demand would be much greater.

    Isn't that about what happened?

  18. That Murphy bond deal was okay'ed by Paul O'Neill, and didn't Onorato vote on that as a city councilman?

    Which is cheaper: floating the bond and raising rates to cover it, or letting the state take the pension fund and raising parking rates to cover the annual payments to the state?

  19. Which is cheaper: floating the bond and raising rates to cover it, or letting the state take the pension fund and raising parking rates to cover the annual payments to the state?

    I don't know about cheaper, but the last option is safer. By "floating the bond," the pension fund would have to take that money and put it in the stock market (mostly). The parking revenue is certainly much more predictable than that.

  20. If we let the state take over
    1. Morgan Stanley will not make their $3 million+
    2. The new "independent" parking operator will miss out all the money they are going to make off of the increased rates
    3. Ravenstahl's advisors will miss out on the opportunity to "manage" the pension fund assets.

    Why else are they using scare tactics to try to ram this idea through?

    When Ravenstahl gave his power point presentations and discussed huge reductions in the police force or the increases in wage and property taxes, he didn't discuss the idea of the city maintaining control of the parking spaces and raising rates on our own, did he?

    I wonder why.

  21. That's one of the ironic things here.

    I honestly haven't followed any of this stuff closely, mostly cause I think no reasonable person can keep up with all the inside deals.

    However, hasn't the state, when it put it's two cents in said parking rates should stay low?

    I think I always heard that from reps from the state and surrounding area. Clearly what's at work here is politics and not sound financial oversight. High parking rates would grab non resident commuters and squeeze them where it hurts. (That's why I like it)

    In a few years with some tweeking most residents of Lawrenceville, Bloomfield Oakland, Shadyside, The South Side, The War Streets, Polish Hill, Highland Park etc.. would have figured out ways to adjust. Certainly it would provide a huge incentive to move closer into town and fill the Downtown and Strip in with new residents. (as well as any area near a T line.)

    After a while rates would likely adjust down as demand dropped from city residents.

    The people who would be in serious trouble would be the far flung suburban commuters.

    The one thing the state doesn't want is a real squeeze on those folks, even though it's exactly what's in the city's best interest.


    Well I'm sure this is going to be well received.

    While attending Pittsburgh Technical Institute in 1980...the question was raised: "Given the decline in Steel Jobs how does the City of Pittsburgh generate revenue to make up for lost wage taxes?"

    Having traveled extensively...I opined: 'Install Toll Booths at City Portals, and do survey to occupants stuck in traffic for alternatives.'

    With tongue firmly planted in cheek, I might add.

    Mayor Dick Caliguri and I are Alumni.

    Funny, ain't it


  23. Bingo!

    There should be tolls and todays technologies may make them very practical.

    The city is sadly affected by a deep inferiority complex. We have what lots of these suburban folks want in a fairly stable supply of good jobs, yet we have let them walk all over us.

    This situation is very similar to that of Manhattan and Bloomberg's congestion pricing proposal.

    The difference however is that in NYC, more than 50% of people driving in actually do live in and pay taxes in the city. In the case of Pittsburgh, this is not the case at all.

    I'm pretty sure that we rank 2nd after D.C. for the highest percent of non resident commuters. There is no excuse for not squeezing a bit.

    Areas that don't like it can consider merging into the city or forking over a chunk of cash.

  24. John,

    I am stuck in time warp. People I know take positions at birth and die without moving.

    I have military background. The Battle Field changes and as such we need to adapt...

    You are a nice addition to Comet Waste-Land.


  25. Listen Folks.

    Toll Booths, were developed by Clergy and Kings. As near as I can tell, English. 1107,

    'Pillars Of The Earth' by Ken Fowlett.

    Catholic Church placed book on 'do not read list‘, Did not want to give up Tax-Exempt Status...while pocketing fares.

    Our way of Government based in English Law. Revolution be damned.!

    Eventually slaves were freed....

    ..unlike urban dwellers, pulling cart of fat suburbinite

    Urban areas should expect same Tax-Exempt Consideration given to State Game Lands as afforded by the Commonwealth of Pennsylvania...

    'Compensation', for good of the People and our, Commonwealth.

    (Mayor Pete Flaherty. Or, so I think.)


  26. I also haven't looked at this specific proposal. Honestly, I'm in a state of shock that rational ideas are finally being raised.

    I believe the plan would sell the garages and lock them in for parking use for 50 or 60 years.

    This is the big flaw. Nothing should be locked in and should be left up to the future owner.

    Urbanophile made a good comment about the deal in Chicago.

    "But there’s one killer to this deal, and to most similar privatization deals I’ve seen, that almost no one talks about. To get a company to pay a huge lump sum up front, you have to give certainty as to the revenue parameters, in this case meter locations, rates, etc. In effect, what this does is cede urban policy making power to a private entity. That’s an explicit part of the deal in many cases, as these have often been described as “outsourcing political will.” The downside over a long contract is that you have committed to a policy framework that might become irrelevant or even counter-productive over time at high risk to the city.

    Consider parking. I believe we’re on the cusp of a revolution in parking management. New technology and better management of civic assets means things like dynamic pricing are going to come to fore. Dittos with things like congestion pricing on highways. Locking yourself into an old school 20th century flat rate pricing scheme for 75 years probably wasn’t a good move. (There are many other similar types of problems that could be imagined)."

    You don't want to lock a single land use in for that many years.

    We already no demand for urban housing is rising and the future of car based travel on the level we have today is very much in doubt. The correct policy is to sell the asset outright and leave the owner to make judgements as to alternative options as time goes on.

    As I said, would we really want to discourage future housing, shopping, offices, hotels or other uses if demand developed. This is the kind of dumb deal we made on the South Side with Murphy. ( I know he will say this is what the developers wanted since they doubted future demand. I doubt very much that is true.)

    There might be a bit of logic in taking a gradual aproach and say, parking must remain for say--5 years, or a gradual step down in supply, if the owner sees other opportunities.

  27. Ooops. I realise the deal is to lease them for 50 or 60 years. The smart thing is actually likely to an outright sale leaving all options to the new owner. (although for now parking is the likely main use)

    We have enough trouble with the stadiums locking up and wasting land.