Monday, August 24, 2009

Hagiography Watch: The Next Pittsburgh

Mostly a summary of stuff already out there..... But the Next American City had a quick blurb on Pittsburgh's recent successes: How Pittsburgh Shot to the Top of a “Most Livable Cities” List

also NYT goes into the nitty gritty: Pittsburgh Seeks 4,000 Extra Police Officers to Help With the Group of 20 Meeting. Note how the story now says Pittsburgh is looking for help from "across the country".  Wasn't the idea originally that a lot of local police forces would be able to provide a lot of that help.  I've only noticed a few news blurbs on this, but they have generally mentioning that local governments have turned down those requests.  Many don't have the extra resources.  Some don't have police forces at all.  I'll have to look up how many police officers there are in total in Allegheny County. But the bigger story lurking in there is the regionalism story.

and whatever good PR Pittsburgh is getting, state is balancing out with bad these days.  CNN is succinct: Pennsylvania, the New California

and the state is at it again looking at Pittsburgh pension woes.  In a story today  the quote describing the current state of the Pittsburgh pension system is:
 "As for Pittsburgh's 28 percent ratio, McAneny said "there's just no way to describe that. It is bankruptcy, or the pension equivalent thereof."
I still don't get why this is noticed all of a sudden.  But what I really don't quite get is that they all know that the 28% number is now several years out of date.  When we see more current actuarial data reflecting the current state of the the city's pension system, it will be lower than that. Mark my words. And what really isn't talked about is that if the state takes over the city's pension system you will see the state hire the next actuary to do pension calculations.  Anyone want to place a bet that the numbers a state-hired auditor comes up with measure the pension funding level here will not look like what we think the numbers are now. As I mentioned recently, structurally things are getting worse locally and across the state in ways beyond what that article even touches on.


Anonymous Anonymous said...

re: pensions, so what's next? Actual city bankruptcy and a default on the city's pensions? County/State/Federal bailout?

The people that owe those pension obligations now live in the suburbs and Tampa and North Carolina and Arizona. I don't see why new city residents should feel an obligation to honor them if they will lead to burdensome taxation levels.

Monday, August 24, 2009 12:43:00 PM  
Blogger C. Briem said...

The law is pretty clear in Pennsylvania you can't unilaterally adjust pensions for those who have already earned them. 

and your assumption isn't really correct.  While some retired city workers live outside the region, most are here and a lot are still in the city proper.  The Pgh City Paper had a nice map of where city retirees live

What is better way to put it is that the residents who had lower taxes because they were not paying for the pension liabilities as they were incurred have mostly moved out of the city or passed away. So a lot of suburban residents are the ones who benefited from not paying for the services they received over a long time. 

Monday, August 24, 2009 12:51:00 PM  
Anonymous MH said...

Or you could view it as inter-generational theft.

Monday, August 24, 2009 3:04:00 PM  
Anonymous Anonymous said...

What's the endgame here? The pension burden has, by any honest measure, bankrupt the city.

The status quo obviously can't pay for these pensions. Can the PA state law you allude to simply compel the city to generate enough revenue to cover the tax burden? Any city-only scheme to actually honor these pension obligations at par would certainly lead to the highest tax rates in the country, no?

Didn't Indianapolis get its pension obligations covered by the state recently, under the thought that the people who fled the city still lived in the state?

Monday, August 24, 2009 4:12:00 PM  
Blogger joe said...

How about the state sponsor a super big lottery to "Benefit Older Pittsburghers" (complete with '80s marketing pitch) and advertise it globally to the diaspora, make the odds real long with a big payout. How many times would we have to do that to raise $250 million? Make the winner Young George Washington for the day.

Thanks for the link to that map of pensioners -- at first glance it looks like toy soldiers in battle formation, with suburbanites in reserve.

I liked that Next American City piece, especially this part:

"There are many more jobs to be created and something is still to be done about the dwindling population."

Monday, August 24, 2009 6:12:00 PM  
Blogger C. Briem said...

I really don't know the endgame. It's hard to see an end that does not include money from a third party... but the state legislature seems to have made clear that is not going to happen. Other than that? Vallejo? or some form thereof?

the one thing about this state pension takeover is that it pretty much obviates all the Act 47 work. Telling the city it really needs tens of million more in annual pension payments is just not factored into the plan.

But the short term even with this potential state takeover seems clearer to me. I am on record as being of the mind that the parking authority sale could make sense if the proceeds only go toward paying down debt or liability... but what I see happening is pretty clear. State takes over and imposes big annual payments on city. City sells or leases parking authority but does not pay down debt and instead juse use the proceeds to pay the higher required annual payments. Kind of the worst of all worlds.. But is the most likely scenario as I see it. In a few years, pension funding is as low as it is now yet the parking authority assets will be spent. But the city will claim it has no other choice.. Exactly the argument Murphy used for using the proceeds from the water system or for floating the pension bond. Ironic in an historical way.

Monday, August 24, 2009 6:30:00 PM  

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