Cities on the verge of bankruptcy are nothing new for Pennsylvania. In 1991, Philadelphia was financially insolvent and the former Mayor and today's Governor, Ed Rendell, has taken claims for turning the Philadelphia's finances around.
In light of Pittsburgh's financial crisis, should anyone think that Mayor Murphy must emulate Rendell's alleged successes, then it is time for a little history lesson. Most of Philadelphia's financial turnaround was the bailout created by the General Assembly, which crafted HB 209 of 1991. This legislation formed the Pennsylvania Intergovernmental Cooperation Authority (PICA) and provided Philadelphia with an extra 1 percent sales tax.
Two years later, Pittsburgh received a similar bailout. In December 1993, three weeks before State Representative Tom Murphy was inaugurated as Pittsburgh's Mayor, he and his legislative colleagues crafted legislation that created the Regional Asset District (RAD) and Pittsburgh's extra 1 percent sales tax.
Tom Murphy has been the beneficiary of the sales tax revenue during his entire tenure as Pittsburgh's mayor. The sales tax bailout funds regional assets that were previously funded by the city budget, creating a budget windfall.
In recent years, the city has spent tax dollars on Lazarus and Lord & Taylor developments, tax-incremental-financing giveaways, legal costs of eminent domain with the Garden Theater and Pittsburgh Wool Co., financing Frisbee fields and providing heated sidewalks for the LeMont restaurant.
Mayor Murphy and City Council have failed to take personal responsibility for the city's fiscal crisis while putting the blame on the state legislature. Everyone should be asking where the windfall revenues from the sales tax bailout have gone, though I think I may have answered that in the paragraph above.
