Wrapping up a season-and-a-half long story arc:
State officials today approved Pittsburgh`s plan to bolster its chronically underfunded employee pension funds, staving off a state takeover that city officials predicted would cost up to $100 million annually. (Trib, Bob Bauder)
Next, of critical importance:
The city now must determine how it will offset the general fund deficit. Council`s plan for plugging the gap with revenue from increased parking garage and meter fees has been stymied by disagreements between members and the mayor`s office.
Pittsburgh Parking Authority officials say they must first address capital improvements to the parking facilities before the authority can turn over any extra cash to the city. (ibid)
Excerpted from a press release from Mayor Ravenstahl:
“This is extremely good news for the people of Pittsburgh,” Ravenstahl said. “We worked very hard to make sure that the City’s plan would be accepted by our accountants, actuaries, and ultimately the Commonwealth. I want to thank members of my finance team for their hard work in ensuring that we can continue to provide quality services and balanced budgets with no new tax increases. This is a critical step for us as we get closer to completing our financial recovery.”
Council President Darlene Harris sent out her own press release touting funding that is “sufficient to avert takeover by the Commonwealth”, and naming, crediting and/or quoting various officials for last year developing “the inspired idea of using present valuation.”
The Allegheny Institute adopts a tone of confusion:
[W]hy was the City so afraid of a takeover? The state law clearly stated collective bargaining would remain at the City level. Also, where is the binding language that holds future City administrations and Councils to honor the promises of 2010? And, if we are to take the comments of the City Controller at face value when he said the bailout plan “is no long-term solution [but] a mechanism to avoid state takeover”, then what is the long-term solution? (Allegheny Institute)
An oft-cited rationale for takeover aversion has been that the mandatory commencement of annual $100+ million pension payments was deemed infeasible. Of course, questions persist as to how long the fund can remain solvent without dramatically more substantial cash payments — notwithstanding the commitment of 30 years worth of future parking tax receipts.
As for the blogger/professor/economist/nabob, we are left with this:
[N]o matter what the state says today, nothing at all has changed impacting the long run financial health of the city of Pittsburgh. This all gives ‘accounting fiction’ an entirely new meaning. (Null Space; see also from this pm)
Well. Be that as it may. But look on the bright side. We’ll still have chances to make news.