It's not good news that the City of Pittsburgh has again made the news with another article in Bloomberg pointing out the issues surrounding the City Council's recent 7-2 vote to divert funds from parking tax receipts to shore up a severely underfunded pension plan.
The City has only about $325 million in funds set aside for a total pension liability of approximately $1 billion. Pennsylvania law requires 50% funding else the State can actually take control of the pension plan.
Also, in more not-good-news, Pennsylvania may order the city to double its $46 million annual contribution by 2015 and to raise it to as much as $160 million by 2030, according to a report prepared for the state. Exactly where does the State expect the City of Pittsburgh to come up with $46 million?
In a city of just over 335,000 residents that has experienced more population decline then every major city outside of New Orleans since 2000, you can bet that there is no appetite for increased taxes on the part of residents.
Moving $13 million from parking taxes to fill the pension liability gap will create a $13 million hole in the general budget that the mayor and city council will need to fill by either raising taxes or reducing services. How does the City attract businesses and residents in this environment. According to the population decline article linked to above the city is lacking new immigration and deaths having outpaced births.
To his credit, the Mayor has opposed this plan- although I am afraid to hear what his solution might be instead.
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