It’s not every day that suburban and rural Pennsylvanians demand more government.
But when the job was keeping taxes and fees low for commuters and other visitors to Pittsburgh, state legislators in 2004 couldn’t move fast enough to create a new authority with a vague mandate and sweeping powers that was largely redundant.
Special double financial oversight hasn’t been a total disaster. After a world-historic economic boom and bust, austerity measures born largely by city workers allowed Pittsburgh enough time to reclaim its riverfronts, better exploit its universities and achieve semblances of vibrancy, distinction and stability by the time city living came roaring back into vogue.
Pittsburgh has since demonstrated its readiness to emerge from its state-administered recovery program, and voluntarily awaits only for its debt schedule to align with a solidified nonprofit PILOT arrangement and other signs and portents, in a bid to ease the transition.
But when the legislative leaders in charge of the ICA claim this…
“The ICA Board members who have made well thought out decisions with the goal of helping to strengthen the City of Pittsburgh should be saluted for their fiscal leadership.” (Scarnati & Turzai)
… it’s not an accurate illustration of their role.
The coordinators of the Act 47 Recovery Plans, working at the behest of the executive branch of state government, handle the annual budgeting strategy including five-year planning. The text of Act 47 itself provides the City with a cap around collective bargaining. The very acceptance of state authority under Act 47 provided officials sufficient political cover to enforce austerity.
The ICA was created to say “No” to a commuter tax or any other new revenue tactic ordinarily made possible by Act 47, that would upset the city’s many neighbors.
It really was just that simple: reject options that would affirmatively upset suburbanites. That’s why it is dominated by state legislative leadership, who represent interests mostly outside the city. “No taxation without representation!”
We could argue on ideological grounds whether saying “No” to such new revenue actually helped the city balance its books by protecting economic growth. That’s an old argument and unimportant here, however — unless we’re now fighting over who deserves credit for Pittsburgh’s resurgence. The state, by assuming greater responsibility for Pittsburgh, had an interest to protect suburban dwellers’ pocketbooks regardless, and did so by throwing together the “ICA” on the quick and dirty.
As long as the Legislature was stepping in to assume some control, though, it figured it might as well seize responsibility for city debt management too. After all, it could so easily be argued that the city had already taken too long to awaken to new realities… so of course the state could do the work better.
So the ICA panel retained for its “executive director” a high-priced journeyman municipal bonds trader with the intergovernmental and Wall Street experience appropriate to a delicate operator. And it got into the business of analyzing transactions and budgets, all the better to assemble reports to justify what were essentially simple political decisions. It hired its own advisors, lawyers, and consultants, doing a lot of extra management — perhaps well-intended, but in which suburban constituencies had no particular core interest.
The ICA might not have needed to become a whole government outfit. But it was tolerable until it got involved in the gambit of withholding casino revenue from the city until it performed various forms of “extra credit”.
It’s questionable whether suburban dwellers feel any interest whatsoever in how quickly the City of Pittsburgh implements any specific financial software, for example. It is however a fact that when trying to recover from financial hardship, predictability is important.
The benefit of activist state leaders holding back and dangling as a “carrot” tens of millions of dollars may be too dubious to be very worthwhile. And it’s an invitation to scrutiny, considering the possibility that the ICA itself may be capitalizing on that accumulated tax revenue.
That is when the everyday friction of oversight became serious.
When Mayor Bill Peduto stated that…
“It is obvious to us that the ICA has awarded no-bid contracts to politically connected firms in violation of city and state law” (P-G, Robert Zullo)
… which is just the sort of accusation he has leveled in the past to noteworthy effect, the ICA responded with boilerplate about how much it is helping the City. And…
In a statement, ICA chairman Nicholas Varischetti did not address the allegations of illegal no-bid contracts but said the authority “would welcome the auditor general to review our records and to perform a complete audit of our work.” He added that he has directed executive director Henry Sciortino to “make any accommodations necessary to support the auditor general should he wish to avail himself of this request.” He noted that the authority’s annual reports, official correspondence and meeting minutes are available on its website. (ibid)
That seemed like a self-assured response until one considers that the Auditor General obviously possesses unquestionable authority to audit the ICA, and that the ICA’s website promptly went down and has been down ever since:
It’s only the smell test. But it’s another failure.
Pittsburgh is almost out of Act 47. The city by any ordinary interpretation has passed enough balanced and approved budgets that the ICA by its own law may expire. But its officials are arguing that “conditionally” approved budgets don’t count, and revoking old approvals on specious-seeming grounds.
If the Legislature’s ICA has become more trouble than it is worth in oversight’s waning days, then Governor Tom Wolf can decide to take up the simple responsibility of safeguarding non-City residents’ interests himself, by adopting the city’s interpretation. It might even earn him a boost, to become the Governor that liberated Pittsburgh and its neighbors from inefficiency and politics.
Sen. Scarnati and Rep. Turzai might take the Governor to court to argue their own interpretation, but then they’d be the ones “wasting taxpayers money on frivolous lawsuits”. And in what public interest?
I don’t know what the next few months will bring. But if the ICA had remained a quarterly roundtable of legislative designees protecting suburban pocketbooks, and not long ago morphed into a perfectly Orwellian bureau of “Cooperation”, it would have saved the Commonwealth a lot of grief. Perhaps like all good things it should come to an end.