Sunday, December 13, 2009

The Return of City-County Consolidation; or Solvency via Rapture

I never supported the unilateral consolidation of the City of Pittsburgh into Allegheny County -- and I still do not.

But the argument proffered today by Duquesne University chancellor and former ICA big shot John E. Murray Jr. in the Post-Gazette is delivered with such impeccable timing, and with such refreshing frankness and focus, that it deserves to be seized upon by all of us as a challenge to produce something better.

The tuition tax, even if determined to be legal, would be another Band-aid. (ibid)

Yes. That is correct. Neither the $15 million per year this imaginative tax would generate nor certainly the annual $5 million we are requesting in its stead would be near enough to sustain Pittsburgh through the end of its debt plateau in 2017, especially given yet-to-be-determined mushrooming of our pension payments.

But the essential solution is not to tax more; it is to spend less. (ibid)

In point of fact, we need to do both. If today we were to wave a magic wand, undergo a lightening-fast political enlightenment and commence cutting with enormous political courage, we would still retain enormous obligations from the past to pay in full. And those few agitating for bankruptcy should understand that bankruptcy judges realize that governments possess more options for revenue generation than individuals and businesses. Governments are too powerful to be given permission to fail easily. Since governments can access pools of taxpayer funds from hundreds of avenues, they might be compelled to do so -- brutally -- if we ever went down that road. So we need to pay for all the irresponsible decisions of the past -- of decades ago and of months ago -- whether we like it or not. Period.

So we need to raise the right taxes -- and a commuter tax and our non-profit payroll preparation tax are both truly fair, utterly commonplace and fully responsible options that would be available to us, if the state legislature and its oversight boards ever roused themselves from their own narrow political machinations or tired of resisting.

And at the same time, we need to reform our government practices -- from switching our employee benefits packages to defined contribution plans and 401(k)s, to bargaining aggressively with our unions at the conclusion of every single contract from now on with the aim of dramatically shrinking our payroll expenditures, to closing every police station and fire house that neutral outside public safety experts advise us we can, to consolidating every service appropriate with the County and other governments starting with Public Works.

What we do not need to do is this:

The city should have appropriate representation on the non-salaried County Council and a professional manager, similar to a borough manager, working under the authority of the county chief executive. (ibid)

Thanks but no. We will not allow ourselves to be managed by an unelected and necessarily less visible bureaucratic appointee. We will not put all our faith in County Council, upon which the city already enjoys proportional representation, but which can never be constituted to adequately address, understand or even notice all the challenges of city life. And we will not imagine for a second that our County government, given its comparatively slender portfolio of present responsibilities yet its own extremely significant financial problems, is any better capable of tackling these issues than our existent suite of City representatives.

The solutions to our problems do not lie in handing them over laterally, or up to somebody better suited. Walk the earth and try to find naturally superior politicians -- you will be gone a long time. The solutions lie in hunkering down and bringing the tactics of all our political schools and ideologies to bear without prejudice, like people with something immediate and personal at stake.

It is in fact human nature, not Yinzer nature, to resist change and delay hard work until crisis is upon us. Well, here we are. Bring it on.


  1. The right approach to address the problems created by the residents of InsolvenCity, and to incline those residents to become rational, is . . . two taxes directed primarily at non-City residents?

    Outrage at a proposal to ease the reins from the hands of city residents and elected officials who have demonstrated themselves to be failures?

    You've been in the city too long.

  2. Pittsburgh has 2 problems. First it bears these ridiculous legacy issues from when the city had far more people and the political powers-that-be wrote organized labor even more blank checks than they do now. Second, change in tax structure from Pittsburgh has to come from Harrisburg, where of course the Mayor seems to have burned every imaginable bridge. The city supports infrastructure for the region's economic, cultural, and educational well-being but those costs are borne by a small number of people, many of whom cannot afford to pay more. Instead, people from all over make a livelihood in Pittsburgh but only pay a small amount to the city in exchange but yet use the money they make in the city to buy goods and real estate that gets taxed elsewhere. There has to be an equilibrium. Taxes don't need to be raised, they can even be lowered, they just have to be more efficient and reflective of the modern economy, not the fractured municipality system that PA loves.

  3. Infin - First of all, a lot of those non-city residents you speak of *were* city residents. In fact many of them are collecting city pensions. They did not somehow become less culpable when they moved 3 miles away. Secondly, the "commuters" after all are Pittsburghers during the day - they use our roads and bridges, drink our water and are protected by our police, fire and paramedic services. These are taxes utilized by cities nationally and nobody is worse for wear.

    Secondly, I've read your missives on Dan Onorato. You're telling us now we should hand over the reigns to him? He's a product of PGH! The suburbanites have handed over the reigns to us! And things are not going so great. We're no bigger failures in the city - we just had a bigger boom (historically), a larger scale to deal with, and we're at the leading edge of the reckoning. You wait. You'll get yours.

  4. Oh, and I can't believe I let this slip past:

    "For those who feel compelled to respond that the total elimination of duplicative offices and departments would not result in such significant and permanent savings, please resist. Like watching the magician place the bunny in the hat, we have seen the numbers."

    How about providing just us with just ONE number, then? Anywhere in this essay about cost savings? And what does that simile even mean?

  5. Pittsburgh has endogenous problems to be sure, but the world economy is relevant. We now face two interrelated driving forces: a fiscal crisis that is rooted in a parasitic and anachronistic financial sector and an economic crisis rooted in a Bottleneck of no longer avoidable ecological dilemmas. Concretely, energy allows work and work creates wealth. Worldwide oil production appears to have peaked in 2005 and the economy is now contracting because we are bumping up against the limits to wealth production (to do work). However, Obama, as Bush before him, is hell bent on saving the financial institutions as if they are the salvation of our economy, when in fact they are shifting not creating wealth; and they have created massive debt that cannot be repaid.

    The comments here all assume the economy will start growing again. We should be restructuring our economy instead of trying figure out how to legally rob Peter to pay Paul.

  6. It should be no surprise that this was published with "impeccable timing" -- that is one of the primary missions of the daily newspaper.

    Murray presents no startling new ideas, he mostly regurgitates existing idealogy (that with which he is in agreement and that which will benefit the institution he represents) with some great rhetorical pomp. But one could hardly fault him for that -- that's what chancellors do, no?

    Deftly calling upon government to spend less, well -- what citizen doesn't want to hear *that* call to action?

    Glad you could break it down for us, and offer some differing points of view, especially re: a "borough manager."

    Both of you illustrate well how complex this matter is -- and how a solution seems, so often, just a pipe dream.

    When we should truly start to worry, I suppose, is when everyone stops blowing.

  7. To repeat the ridiculous mantra of consolidation between city and county by merging, blending or dissolving duplicative services, is to perpetuate an informal debate parity to obstructionism and ignorance to the delivery of public services for which we pay.

    What can be considered duplicative departments are Controller, MBE/WBE, Personnel/HR and Law Departments. And this is assuming that each of these departments at the City and County are fully staffed and operating effectively - which most likely they are not.

    Throw in the Mayor and City Council: Totaled from their 2009 operating budgets and it's less than $15 Million for the City and less than $20 Million for the County. So 5% of the City's operating budget can be "duplicated."

    On the City-side: cant duplicate the unique services provided by Finance, Clerk, Police, Fire, EMS, BBI, Animal Control, Public Works, Parks, CIS and Planning.

    On the County-side: cant duplicate the unique services provided by the Public Defender, Medical Examiner, Court System, Real Estate, Kane Regional Centers, Health, Jail, Shuman Detention, Public Works/Parks or the District Attorney.

    And yes, you cant duplicate Finance, Public Works or Parks. There are fundamentally different relationships between Finance and the other departments at the City and County. Many of the functions in the city's Finance Department are performed by other departments at the County.

    Additionally, if you dissolve city into the county you effectively triple the infrastructure needs (3X lane miles, 2X Bridges, 3X Lanslides, etc.) while only doubling the operating budget - and that's without any monetary or labor savings not to mention the endless bargaining to restructure labor rates and seniority.

    So instead of shifting money around or producing new revenues, why not do the politically suicidal option of reducing the payout to retirees and increasing the required contribution by those currently employed, as essentially suggested in an earlier post.

    We speak of not passing along crippling debt to our children and grandchildren at the State and Federal levels, why cant this be debated thoughtfully at the local level? Labor has been "cut to the bone," but current personnel is not crippling the budget.

  8. We really don't speak much about passing on crippling debt-- almost everyone is eager to pass it along if they can.

    It's really the dark prediction the founders had about the country's future if one generation lived at the expense of future generations.

    It's what killed GM and Chrysler.

    Also, I think from the letter and intent of the law, it's illegal isn't it? I mean what is the legal intent of balanced budget laws?

    The whole way we measure our economy is warped since we only attempt to measure consumption and not debt.

    Rationally, the problem is based on legacy costs and has to be solved there.

  9. Well, if you want to look at balancing the books, looking at debt is a good start. Then you progress to the debt owed by 'authorities' that were created for the sole purpose of borrowing money so it would not show up on governmental books. I am sure that locally the Sports & Exhibition Authority, Port Authority, Airport Authority, Water & Sewer Authority, Parking Authority et al have debts or obligations that run into the billions of dollars and no one has even started focusing on that.

    The liabilities of government and its inabilities to fund them as currently constituted is beyond depressing, it is scary.

  10. Yes! I think if one had to enact one transformative thing that would reform government at all levels it would be to create some kind of fully independent accounting body that would audit all the books and mandate clean reports and estimates of all accrued and promised liabilities.

    Perhaps I'm being optimistic, but I honestly think if people really were told what the real costs and consequences were, many popular programs would be much less popular.

    Ever heard of The Institute For Truth In Accounting?

  11. Here in Australia, we are in more debt than most of you lot, but of stupid governments try and cover up that fact