A Candidates' Guide to Allegheny County

Allegheny Institute, the conservative Mt. Lebanon based think tank, has released a candidates' guide to issues facing the county. Democratic County Executive Dan Onorato recently announced that he would not seek a third term and since then a number of contenders announced or indicated that they will run for the office. AI Senior Policy Analyst Eric Montarti says the guide touches on the Institute's perspective on a range of issues, from funding the Port Authority, to revisiting the home charter rule, to the best use of Pittsburgh International airport and property reassessment. He says "our guide would be somewhere where a prospective candidate could look at, think about some of the issues -- maybe think about an issue a little bit differently than they may have and then hopefully go for some plan of action from there." On the democratic side County Controller Mark Patrick Flaherty and County Council President Rich Fitzgerald have joined the race for County Executive. On the conservative end, Tea Party activist Patti Weaver and County Councilman Chuck McCullough formally announced their candidacy last week, businessman and Mt. Lebanon Commissioner D. Raja stepped into the race yesterday. A Candidates' Guide to Crucial Issues Facing Allegheny County can be found at alleghenyinstitute.org.

Comparing Your Municipality’s Spending to Your Neighbor

The Allegheny Institute for Public Policy is in the process of posting budget data for every municipality in the Allegheny County to help residents better understand what their elected leaders are doing and to help the politicians better understand what their counterparts next door are doing. The Institute hopes to have all the data on its website by Labor Day. The impetus for the report came from two fronts. First, researcher Frank Gamrat says the Institute has done a number of studies comparing Pittsburgh to other benchmark cities but it has never compared the municipalities in the county. Second, Gamrat says he took a phone call from a local elected official who wanted to know how his municipality’s spending on a certain line item stacked up to others in the area and Gamarat says he was embarrassed that he had no answer. The report looks at spending on items such as public safety, roads, and debt service and then compares one municipality to the next on a per capita basis. It also looks at taxation. Gamrat says the goal is not to pick on or praise any municipality. “It is just so municipalities can compare themselves with their neighbors and they can make better decisions when budget time comes around and they have nice discussions in their council chambers,” says Gamrat. Institute President Jake Haulk says it also will be a great tool for residents, “I dare say that most people have no idea what the spending per capita in their municipality is.”
“I think this will be a step forward to help people think about what the size of government aught to be,” says Haulk. Haulk says he thinks people will at the report and then ask questions such as, ‘why are we spending more on roads than other municipalities? Is it because we have more roads, or are we not paying attention when we let the bids?’ Gamrat says the report will be full of footnotes to help people understand anomalies such as a spike in recreation spending in a year when a new park is built or higher than usual income in a municipality that hosts a mall or other major facility. The institute hopes to update the data every year and may begin comparing municipalities by land size, average income or other factors.

Allegheny Institute: Pittsburgh Worse Than Benchmark

The Allegheny Institute says while Pittsburgh is closing the gap between an amalgamated “benchmark city”, it is not move fast enough. The institute gathered tax, spending, staffing and debt numbers for Salt Lake City, UT, Columbus, OH, Omaha, NE and Charlotte, NC. Those numbers were then averaged to create the benchmark. Compared to the benchmark, Pittsburgh spends 50% more on a per capita basis. $1,440 compared to $961. Allegheny Institute Senior Policy analyst Eric Montrati says the higher numbers come from having more employees per 1,000 residents and higher debt, pension and workers comp cost than the benchmark. Total income for Pittsburgh came in 50% higher but taxes were 56% higher than the benchmark ($1,113 vs. $715). The difference was made up through other revenue streams such as state funding and fees where Pittsburgh collected $327 per resident compared to $251 for the benchmark city. Montarti says the city has made some progress since the first time the institute did the study in 2004. He says Pittsburgh is lowering debt and has cut the number of fire fighters. However, Montarti says the city has not done enough. He says the act 47 team and ICA board have missed an opportunity to really clampdown on spending and find solutions to the pension problem. Per 1,000 residents Pittsburgh has 3.6 police employees and 2.1 fire employees. That compares to 2.9 and 1.8 for the benchmark city. Per capita net bond debt for Pittsburgh came in 173% higher than the benchmark ($2,176 vs. $797) and per capita workers’ comp payments were 331% higher ($69 vs. $16). The entire study can be found online.

Allegheny Institute Studies Johnstown's Act 47

The Allegheny Institute For Public Policy says after 18 years of being under the control of act 47, Johnstown may be getting closer to bankruptcy than it is to being able to get out from under the provisions of the Act. Johnstown entered into act 47 in 1992 and is on its fourth amended recovery plan. The Institute looked at the city’s 2007 finances (the most recent DCED audited numbers) and then compared them to nine other similarly sized cities. Policy analyst Eric Montarti says Johnstown lead the way in many negative categories including low wage and real estate taxes, high employee count, high pension and debt costs and a heavy reliance on state and federal funding. State and federal funding accounted for a quarter of the city’s 2007 budget and Montarti wonders if the percentage grew with the addition of federal stimulus dollars. The only bright spot was Johnston’s low police department costs. The Institute launched the study when Johnstown passed a budget this year that cut the number of employee and raised property taxes. Montarti says at the time, the council noted that it was better to make those moves than to enter into chapter nine bankruptcy. Montarti says, “Johnstown is now in negotiations with its major unions on new labor contracts that might decide whether the Council's prognostication comes true.” He says he wonders why those higher personnel costs and legacy costs were not dealt with much sooner.
Montarti says this study may point to flaws in Act 47 or the way Act 47 coordinators approach their jobs. He says the coordinators must know their limitations and at some point admit, “we cannot solve this problem, we need to go to some sort of bankruptcy, debt reorganization, because what we have in terms of our tools just do not work.” Montarti says another problem may be the clash between powers given to municipal unions and the power of Act 47 coordinators. He says those unions do not have the ability to go on strike but they do have the right to binding arbitration and if the arbitrator does not heed the needs of the coordinators it may leave the municipalities in the same situation they where in when they entered Act 47. Very few of the municipalities that have entered Act 47 since it was enacted in 1987 have emerged. Montarti says maybe this report will serve as a wake-up call for coordinators to allow their municipalities to move into bankruptcy and alow a judge to right some of the problems they have not been able to address. “Something has to happen to right this financial ship, and soon,” says Montarti.
The full report is available at the Allegheny Institute's website.

Allegheny Institute Doubts G20's Economic Impact

The Allegheny Institute says it does not think as much money was left in Pittsburgh during the G20 as some have estimated. The conservative think tank has released a policy brief regarding VisitPittsburgh's claims of a $35 million economic benefit to the the Pittsburgh region as a result of the G20 economic summit. The Allegheny Institute claims that the projection is unreasonable. The group looked at two indicators of economic impact for the region. They looked at RAD (Regional Asset District) revenues and hotel tax revenues. According to the policy brief RAD revenues were down in September of 2009 as compared to 2008, but hotel tax revenues increased by $600,000 representing an additional $8.5 million in hotel spending. Allegheny Institute senior research associate Frank Gamrat says the picture is incomplete because they were only able to analyze two sources but he believes the $35 million impact projection is still unreasonable because of the difficulty in quantifying the actual impact to the region.

Visit Pittsburgh has released a written response saying in part; "The Allegheny Institute fails to note that most of the 33 delegations associated with the Pittsburgh Summit were exempt from paying any taxes. These delegations represented over 3,500 attendees. In addition, security forces were also exempt from paying taxes. Used as the cornerstone for the Allegheny Institute’s faulty analysis, tax collections in this case are not a meaningful measurement of direct spending relating to the Pittsburgh Summit." "VisitPittsburgh stands behinds our estimate of $35 million in direct spending as a result of the Pittsburgh Summit."