Council at first voted 8-0 to divert the entire Local Services Tax or "commuter tax" of about $13 million a year for 30 years into the pension fund, in a bid to avert the takeover. The Mayor, not liking the idea, pledged to veto it promptly, so that his veto might be promptly overridden and Council's will be done before the deadline.
Then suddenly specific legal covenants were discovered upon revenues collected from the LST. So now they're instead going to pledge $13 million annually from the Parking Tax (which also ordinarily becomes a part of the city's general budget) along with cashing out the $45 million Fund-No-Longer-In-The-Nature-Of-An-Irrevocable-Trust-For-Debt-Service-Reduction. I don't recall the Mayor promising anything specific about what he'd do or not do with this "new" wrinkle, and there appears still to be some concerns over whether the present value of this pledged revenue will ultimately be calculated as sufficient to achieve 50% funding when the figures are calculated on both ends. But politically, we seem close to settling on this course of action.
APPLICABLE TROPES: It Was With You All Along, Too Spicy For Yog Sothoth
I owe $2,500 in credit card bills by Friday -- I've been warned it's my last and final notice. I'm going to write them and ask if they'll accept $130 a year from me for the next 30 years, and mark me paid in full so I can start using my card again.
ReplyDeleteIncreases to the LST come only via state legislation. Perhaps this is an attempt to point the finger at the state, as in "YOU are pinching off our pursestrings"...
ReplyDeleteas i said in another of your posts today, if they think that by simply shuffling money from one city account to another solves this problem they are all fools...better to go back to LAZ !!!!
ReplyDelete"YOU are pinching off our pursestrings"
ReplyDeleteKind of like that PSA where the kid shouts, "I learned it from watching you!"
Mark Steyn is on the radio talking about the plight of bankrupt cities across the country and he asks the question" who is going to lend these cities a penny?" The states are broke, the fed are printing money and LAZ offers us a ton of money to lease our parking and city council rails against predatory Wall Street practices.Then they try a sleight of hand shifting city dollars from one place to another to achieve what they know will not work down the road!!
ReplyDeleteMinuteman: I concur...
ReplyDeleteThe City's difficulties lie within State...
PA Act 205 (1985!) was bastardization of City's Pension.
...further complicated by State
2nd Class distinction for our City.
The inability to raise revenue independent of Corrupt Harrisburg..
monk
The problem, I believe, is that council originally chose to use the local services tax as the designated revenue source here. And the Local Tax Enabling Act says the following:
ReplyDeleteAny municipality deriving funds from the local services tax may only use the funds for:
(1) Emergency services, which shall include emergency medical services, police services and/or fire services.
(2) Road construction and/or maintenance.
(3) Reduction of property taxes.
(4) Property tax relief through implementation of a homestead and farmstead exclusion ...
This was actually raised as a potential concern by McAneny during the conference call.
Now they're using parking tax revenue instead.
these guys are just shooting from the hip...let's try this .no that
ReplyDeleteChris,
ReplyDeleteWhat is the possibility, in your opinion, of a stay of execution...
90 days cool down period...new Gov. and legislature: incoming.
Should something so important to not only Pittsburgh, but Southwestern PA...
...and all of Commonwealth...
Why the "drop dead date"...?
Timing, is of concern as is infexiblity...
Issue is on National Concern!
monk
104.7 news just said the head of the Pa Pension group says, too late to fix the problem
ReplyDeleteWas he quoting from this morning's newspaper? Because there were apparently some context issues. He was on speakerphone with Council during this meeting and apparently gave the green light (though I could barely make out a word he was saying).
ReplyDeleteB-R-A-M
ReplyDeleteWhile you try to figure out 'green light', I offer following based on 60 Minutes piece...
Under-funded pension liabilities for Urban Areas are going to be funded by Federal Government for 'Emergency Personnel'.
They will be 'Militarized'.
Will cost more than all bail-outs combined.
Welcome to Obama-Land!
monk
Am I missing something, or hasn't the issue always been that the money needs to be in the bank by Dec. 31? A promissory note is not the same, is it?
ReplyDeleteCouncil is now proving themselves to be nothing more than spoiled children. Look, we all know about the Mayor's issues, but council is way worse. You may not have liked it, but the Mayor had a real plan that actually works and everyone knew what it was for over a year. I really don't know how these so called do-gooders on council can sleep at night after what they are putting this City through - and will cause us to be put through. One thing is for sure. While the normal "hate the mayor crowd" will never see the light, the business crowd that has been wondering whether Luke is the right choice is now firmly behind him and will never give Bill and the boobs a dime if they try and run against Luke.
ReplyDeleteI'm old...
ReplyDeleteDepends on bank and customer.
There was time when Gentleman shook hands...
monk
Doug Shields, thankfully an uncharacteristically quiet throughout this entire shame-bearing episode, has publicly underlined (to KDKA) that it's all over but the posturing at this point:
ReplyDelete“The mayor is an obstructionist. The mayor has chartered us on a course to disaster. I’m not even going to presume to guess why, but there it is. And it’s really irrelevant to me as to the whys. The fact of the matter is, it is. And as such, this mayor has set us on a course to the state takeover, which is a doomsday scenario,” City Councilman Doug Shields said.
Anon 3:47 - The gross revenue over the 31 years would come to $415 million, so the "present value" would be discounted at what we're all hoping would be the $220 million or whatever we need.
ReplyDeleteBut it is weird, isn't it? Not long ago we were talking about the need to float a bond against whatever revenue we were going to dedicate, and could we deposit the proceeds in the bank in time. Once or twice during the meeting today, one Councilor or another was like, "I actually can't believe they're letting us do this!" and "I know!"
Why they are letting us do this is a matter for speculation. It could be they don't particularly want to stress their state agency and its present investors by becoming responsible for us, and they don't really give much of a darn about our pension solvency after all. Maybe they were at least half-bluffing when they wrote the law to begin with.
You may not have liked it, but the Mayor had a real plan that actually works and everyone knew what it was for over a year. I really don't know how these so called do-gooders on council can sleep at night after what they are putting this City through - and will cause us to be put through.
ReplyDeleteThese are the kinds of statements that make me want the state to take over. It 'works' by solving the pension problem for the next five years and does nothing else. As far as "putting the City through" something, that implies the city can avoid a huge financial re-working if we did this deal.
The warnings about the dire effects of the state takeover are so over the top that I'm starting to assume somebody must have done something really stupid/illegal and needs to hide it for five more years. I can't shake the "Pay No Attention To the Man Behind the Curtain" vibe that gets stronger with every bit administration and anonymous of fear mongering. The last time somebody tried that crap, the big banks got $700 billion the bodies buried for another two years.
I guess my question is, Bram, ARE they letting the city do this?
ReplyDeleteI would agree with the official who excalaimed: "I actually can't believe they're letting us do this!"
Who said it was OK? Why didn't the geniuses on the fifth floor know this before? And most importantly, why did the mayor's office repeatedly say "the money has to be in the bank" by the end of the year if that's not exactly true?
I'm saying I think the state either moved the goal posts closer, or turned off the hologram and revealed where the real goal posts actually stood all along.
ReplyDeleteIt seems like McAneny said yes, for sure, the principle is acceptable. What is still at least somewhat unknown is whether that amount of money will be sufficient. There are protestations that OF COURSE it'll be enough, don't let the mayor and Kunka spook you, but those are the same folks that were certain there were no problems with using the LST all morning.
Pick a reason for the debacle:
ReplyDeleteWriters of Act 44 wanted to fix Philadelphia
Turzai and Jane Orie want to punish Pittsburgh
Mayor wants to lease City assets to his buddies
Finance Director wants to fix pension to boost his resume to get better job
City Council wants a slightly better status quo
Unions want to keep getting all their ridiculous perks
Joe King wants to keep his second job on the pension board
PMRS and PERC want nothing to do with failed pension on their books
Burgess just wants to be an asshat
Let's hope this scheme works.
ReplyDeleteDoesn't appear to be much upside even if it does.
It looks as if no one knows.
Wasn't there supposed to be a public hearing or something?
Council only has to hold a public hearing if the public petitions it for a public hearing or if Council chooses to hold one.
ReplyDeleteWasn't there supposed to be a public hearing or something?
ReplyDeleteAnd a pony that craps AAA Moody ratings.
From the Home Rule Charter:
ReplyDelete§ 319. LEGISLATION REQUIRING PRIOR PUBLIC HEARING.
Council shall not take final action on the following types of legislation without a public hearing which shall be held not less than ten days following public notice published in a newspaper circulated generally in the City:
a. salary;
b. appropriation or budget matter;
c. land use control, such as zoning, subdivision or planning;
d. new taxes or increases in the rate of existing taxes;
e. creation of an authority or quasi-public agency;
f. increase in the amount making a sealed bid procedure unnecessary on contracts; or
g. election of all council members at large or by district.
Huh. Well. I take it you're eying up "b. Appropriation or budget matter".
ReplyDeleteOn the one hand, Council held budget hearings just recently as part of doing the 2011 budget. On the other, the plan was presented as ordinances (laws) and not actually a part of the city's annual budget -- so I guess it depends whether or not it's an "appropriation". On the third hand, Council already took final action as one of those all-in-one-day things, so assuming veto-and-override happens that question might have to get decided by a judge if someone actually puts it there.
On the fourth hand, what is it about putting the parking tax (instead of just the increased rates) toward the pension. That makes some sense because raising just the authority/city rates would mean the private operates could raise their rates and keep all the profit.
ReplyDeleteGreat comment Not Monk
ReplyDeleteWriters of Act 44 wanted to fix Philadelphia
True.
Turzai and Jane Orie want to punish Pittsburgh
No daughtabaughtit.
Mayor wants to lease City assets to his buddies
Of course he does, they promised to take care of him.
Finance Director wants to fix pension to boost his resume to get better job
True.
City Council wants a slightly better status quo
nothing wrong with that.
Unions want to keep getting all their ridiculous perks
Joe King is the best. Fireman sleep while they get paid overtime and their pension payout is based on their salary + OT. (See: pension spiking)
http://en.wikipedia.org/wiki/Pension_spiking
Joe King wants to keep his second job on the pension board
Of course he does
PMRS and PERC want nothing to do with failed pension on their books.
Indeed.
Burgess just wants to be an asshat
He wants what luke promised him for supporting the JP Morganstahl lease.
Luke Ravenstahl was exposed yesterday for the fool and puppet of the Network (see Rich Lord) that he is. Thank god the Council was smart enough to demand his attendance at the meeting.
ReplyDeleteI watched the Council Meeting last night. No No No No No droning on and the bought and paid for Burgess playing the class card, the race card, or any card he can to prop up the vacuous Mayor and give corporations the the right to take $4 BILLION out of Pittsburghs pocket.
Back to Blush - I'd go, but I'm suffering from a serious fund deficit, and the wife is threatening a takeover.
ReplyDelete