Windfalls all around
The story today on the state of the city's budget has a real bonus in there. The city received $10 million more than anticipated in aide from the state for municipal pensions. The line in the Post-Gazette story is that "Officials weren't sure why the city and other municipalities were getting extra money this year".
There is no mystery here at all. Pennsylvania distributes pension aide to local municipalities from a single dedicated source, the Foreign Fire Insurance Tax. So the more comes in from that tax, the more goes to the municipalities. You might have thought the recession would put a damper on that type of tax, but I guess we are becoming a risk averse (i.e. insurance loving) society.. That or insurance premia are way up? I'd like to know which it is actually.
update. PG has more now on the 'windfall' across the state. The graph below is merely an artifact of a statutory change in timing of when the tax was due. Need to think about the timing of this some. Is is a one time boost or will next years $$ take a hit from the baseline. Bottom line no matter is: don't plan on this next year.
From the June revenue report you get the fiscal year to date data for the 2010-2011 fiscal year in Harrisburg. Below is the trend for the revenue stream dedicated to local municipal pension. You will see a big big jump in the fiscal year that just ended. There is a related story here. It was not any goodwill toward Pittsburgh in particular that gave us a boost. That boost in state aide went to most every municipality receiving pension aide from the state. Should be a lot of happy local officials out there with some 'free' money hitting their books.
Anyway... if we looked at that June report that came out last month, it should have been obvious a big(or at least bigger) check was coming our way.