Monday, September 19, 2011

When Actuaries Failed

Things that confuse me.
Well, there you have it.  The go away and come back later answer on the City of Pittsburgh’s pension ‘solution’ of the day. (Trib, PG).  As a commenter here pointed out in the immediately previous post, the first payment from parking revenue into the pension fund is due a week from this Friday.  Does the city even have that much free cash to ship over?
On to other things I guess. More confusing things:  Increasing property tax to send $3.25 million a year over to the Carnegie Library necessitates a city-wide referendum, but sending $14-$26 million (‘irrevocably’ no less) a year to the pension fund is a simple vote of council in December?
How would the new incremental library tax be impacted by new property assessments?  Does it get adjusted for anti-windfall legislation, or will it remain an extra 0.25 mills and thus likely wind up being a lot larger revenue stream?  I am pretty sure the nominal tax base for the city in aggregate is going up, especially in nominal terms.
If the city decides to alter the millage for the library tax, then does the Carnegie Library have some means to sue the city to get it back.  In other words, is it irrevocable in the sense of the parking tax diversion (see first point above).
So now that PPG is being sold according to news accounts… is the City of Pittsburgh again going to be left out in the cold on the potential transfer tax that would bring in.  Is anyone working on the issue we brought up in the spring?   A rhetorical question I know.  (update: maybe city is going to get a transfer tax out of this deal.  Stay tuned).
The notional price is only listed as a $214 million investment.  So if there is a potential 3% transfer tax (total for city and school district not including additional to state) out there, the ‘lost’ revenue is on the order of $6.5 million.. or nearly 2 years of the new library tax revenues.
And from last week…  If you missed  the big public finance news out of Jefferson County where they also seem to have conflated all fiscal issues into their water and sewer system. Looks like JP Morgan is willing to take a big haircut and restructure bonds they set up with their county sewer system.  Seems like the Pittsburgh Water and Sewer System could have used some similar consideration for their variable rate bonds causing such expense and consternation.  Maybe we didn't ask nice enough?  or maybe we asked too nicely?  Who knows?
But I confuse easily.   and yeah, I changed the title.   The allusion just kind of punched me in the nose.


Anonymous MH said...

I haven't heard anything about the library assessment, but I had been assuming it wouldn't pass since the county executive campaign is likely to keep people focused on property taxes.

Monday, September 19, 2011 2:04:00 PM  
Anonymous MH said...

I see that Fitzgerald is now seeing if he can't convince Ravenstahl to go to jail first. I'm not sure how that could help stop the assessment, but it probably couldn't do any harm.

Monday, September 19, 2011 3:53:00 PM  
Anonymous Anonymous said...

If Fitzgeald has found a way to incarcerate Luke, that would be the only positive thing he's done in this campaign.

Monday, September 19, 2011 4:27:00 PM  
Anonymous MH said...

Early Returns quoted Fitzgerald as urging Luke to continue to use the old property valuations.

Monday, September 19, 2011 4:28:00 PM  
Blogger C. Briem said...

I'm pretty sure the county needs to certify values each year before tax bills can be sent out by a municipality. So it really isn't an issue to send out 'old' values. I have to believe Wettick would quickly but the kabosh on any attempt by the county to send out old values as new... or otherwise would directly send out an injunction stopping the whole concept.

Monday, September 19, 2011 4:41:00 PM  
Anonymous MH said...

This is the link for anybody who wants it.

I assumed that "I urge the city school board to stand firm and use the current assessed values for the December tax bills because it is the only way to move forward that is fair to the city's taxpayers" means he wanted them to go to jail before he could get into office. I can't figure out what else could happen if they did that.

Monday, September 19, 2011 4:50:00 PM  
Anonymous MH said...

By 'he', I mean Fitzgerald and by 'them' I mean the mayor and, I guess I hadn't considered this before, but somebody in the school district.

Monday, September 19, 2011 4:52:00 PM  
Anonymous Anonymous said...

Great post Chris. It is somewhat amazing that council would even consider raising taxes for the Library when the pension is still underfunded, our roads and bridges are crumbling and the police force is seriously understaffed. And no you didn't misread - this is the City Council library tax.

Monday, September 19, 2011 8:28:00 PM  
Anonymous MH said...

The council isn't quite as bad as Hitler because Hitler would have asked for .26 mills for libraries.

Monday, September 19, 2011 8:48:00 PM  
Anonymous Book Worm said...

Tuesday, September 20, 2011 8:56:00 AM  
Anonymous Anonymous said...


Isn't Jefferson County, AL in bankruptcy?

Tuesday, September 20, 2011 1:21:00 PM  
Anonymous Anonymous said...

MH - probably true. Hitler was slightly worse in proclaiming victory to appease a small group of people all the while pursuing policies that ultimately hurt his people. Never admitting it or giving in made the downward spiral even worse.

Tuesday, September 20, 2011 8:08:00 PM  
Anonymous MH said...

If they changed the policy so that people are allowed to wash underwear in the men's room of the Oakland branch, then you could use the library and that way no one would be left out.

Tuesday, September 20, 2011 9:13:00 PM  
Anonymous MB said...

I recently e-mailed the library and they replied:

"Currently there are no plans to reduce the millage rate associated with library funding. At 0.25 mills (the city is currently at 10.8 mills,) the library (unlike the city and school district that would have) is not going to reap a windfall gain from reassessed values. Our budgeting expectation is that the reassessment will be revenue neutral."

This seems like they are going to get a big boost from this reassessment on the backs of over taxed residents. I'm pretty sure we didn't vote for a tax increase this large, we voted for .25 mils relative to the then-current total assessed value.

Tuesday, January 29, 2013 4:07:00 PM  

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