Pittsburgh Parking and Pension Permutations
First question, did they address whether the assets should be sold or leased. Some very senior economists have said they should be sold outright and not leased. Was it even on the agenda?
The headline coming out of the meeting is that the panel recommended that the parking rates of the newly quasi-privaitzed parking lots be allowed to move to market rates. The economics are not that simple actually. First off, parking Downtown is amazingly full every day. Since the PPA rates are relatively low to the market, rates will clearly go up no matter. The question is by how much?
I didn't realize they were talking about limiting the ability to build more parking garages. Coupled with the recommendation of letting prices move to market rates it raises an interesting economic question. Given how little space there is Downtown for parking or for building new lots is there a market price that is not partially a monopoly price? There is this little requirement of free entry for there to exist a market price for those who remember econ 101.
In fact, given how big a supplier the PPA is in the Downtown parking market... it's not a question of whether the rates at PPA garages will go up to the current market price.. but how much farther they could inflate? The PPA rates are not only relatively low, but are likely keeping all the other rates Downtown lower than they would be otherwise. If left completely unregulated, which seems to be the recommendation of this panel, you really have to wonder how high rates could go beyond what the private lots currently charge.
Anyone who wants to see where this all really started: Mentioned here in the past and I realize many will not be able to access it directly.. but the late Anne Alpern, the city's first female solicitor by the way, wrote on the topic back around when the parking authority was created:
Unsnarling the Traffic Jam by the Creation of Parking Authorities
by Anne X. Alpern.
Virginia Law Review
Vol. 36, No. 8 (Dec., 1950), pp. 1029-1039
But why are we doing all this? It's all about the state of the pension system of course. So with everything coming to a head, the potential parking asset sale/lease, the impending state requirement to get the city's pension system over 50% funded in order to get avert a state takeover and the actuarial report for the pension system soon to be made quasi public.... what is the most important meeting coming up??
The most important meeting you probably will hear nothing about beforehand, and little about after the fact other than for the most intrepid of reporters is the quarterly meeting of the Pittsburgh Municipal Pension System. Should be this coming Thursday February 25th unless someone has better info?? It's been a rough quarter for the stock market among other things. They ought to have a lot of things to talk about.