Friday, December 31, 2004

Turnaround Year for Pittsburgh? I say 2004 is but a churn-around year.

the turn-around year could be 2006, if we force the mayor to resign ASAP. Otherwise, we might be in churn mode. We can't churn and say we've been progressive or developed. We have to make real changes.

The Allegheny Institute released a policy statement at year end. Some of the more interesting points and reactions follow.
Workers in the City will pay a $52 Emergencies Services Tax (formerly the occupational privilege tax). Those earning less than $12,000 annually will be eligible for a $42 refund.

The for-profit business community will be subject to a new payroll tax that completely replaces the mercantile tax and significantly reduces the business privilege tax—which will be phased out in five years.

... Many trends in Pittsburgh that are tied to the City’s business and tax climate that are still very worrisome.

* Population decline in the City shows no sign of abating. The latest estimate for the City of Pittsburgh's population stood at 325,337 in July of 2003. This was down 2,600 from July of the previous year and over 9,000 since the 2000 Census.

* Decline in enrollment in the Pittsburgh Public Schools is to continue over the coming years.

* People working in the city are in decline.

* Office vacancy rates provide a strong indication of the economic vitality in the City. In 2001, Pittsburgh’s central business district vacancy rate stood at 13 percent. By 2002 the rate had risen to 17.2 percent and by the third quarter of 2004 had climbed to 18.1 percent. The national average in the third quarter of 2004 was 15.3 percent. Bear in mind that there has been no appreciable increase in Pittsburgh’s downtown office space that could have raised vacancy rates.

* Due to the decline in occupancy levels, rents are falling and the value of office buildings is dropping rapidly. Dominion Tower sold in 2000 for $82 million, the building is now listed at $53 million.

* The countywide taxes ... are growing at a negligible rate. Hotel/motel tax, Regional Asset District, Sales tax revenues ... remain flat.

The City needs to get spending and taxes down to sensible and sustainable levels. The 2005 budget stands at $425 million, or about $1,300 per resident. Per resident spending has grown too high and needs to come down dramatically. Aggressive outsourcing, privatization and merging services with the County are absolutely essential.

The City's authorities as part and parcel of a long-term slimmed down City. Mention has been made that the Stadium Authority may be the first to go. Others, such as the Urban Redevelopment Authority, should sell off assets and downsize, returning properties to the tax rolls and using proceeds from property sales to help the City pay off its debts.

Most appropriate would be an abandonment of the top-down government-driven economic development strategy that has been embraced here for far too long.

For a formatted version of this brief, please visit our website: http://www.alleghenyinstitute.org/briefs/vol4no48.pdf


Agree on the shift away from top-down styles and cutting the authorities. Nuke the Parking Authority, over time. Zap the stadium authority too. And make more democratic all the other authories -- as that injects lots of accountability.

Frankly, I think that the worst is yet to come. Our roads are sure to crumble. Our infrastructure is thin and frail. The mayor is still in office and 2006 budget is going to be worse.

A sell off of URA assets can drop the value out of all the decent properties still in the city. A rapid sell off would hurt us dearly.

We need to reform some of the taxes and the overall political landscape. Term limits, better debate inclusion, and real sustainable discussion, such as what the A.I. does, is needed to reach far and wide in our communities. The mind leads and the body follows. Frankly, I worry a lot when the PG just talks about beating Buffalo in terms of mergers. Too much hype of Louisville.

Let's talk about the deed transfer taxes. Let's start to put a pinch on the bond holders and the debt rates. Let's look further at the past corporate welfare deals and try to wiggle out of them as soon as possible. Lazarus is still eating our lunch. The place closed and we are still paying for it. We'll be paying for the Convention Center for a generation or two. We can't pay to have the place heated and lights on. But, is that part of FRIST NIGHT --- no!

We got a lot to do. Cutting a few more schools is not going to be the ticket to fixing the city.

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