Archive

ShareThis Page
Ravenstahl accuses council of steering toward fiscal disaster | TribLIVE.com
News

Ravenstahl accuses council of steering toward fiscal disaster

Mayor Luke Ravenstahl yesterday accused City Council of steering the city toward financial disaster by failing to approve his plan to shore up beleaguered municipal pensions.

In his 2011 budget address, Ravenstahl said he would use nearly $50 million in reserve to ensure balanced budgets through 2015. The city would start tapping its reserve in 2013, he said, but that money would be gone by 2016 — about the time the city faces steep increases in annual pension contributions, he said.

“With this budget and five-year plan, our city walks with its eyes wide open into a financial nightmare,” Ravenstahl said. “… After 2016, I cannot tell you how Pittsburgh will be able to deliver residents the core services they need without severe cuts and tax increases.”

He said his failed plan to lease the city’s parking system “presented City Council with a solution that would have saved us from this, but some members … chose the short-term, irresponsible approach that has long plagued our city, and now will again.

“But it is not too late to prevent an eventual Pittsburgh bankruptcy, if five members of council choose to do the right thing.”

Some council members quickly rebuked Ravenstahl, calling his presentation short on numbers and long on rhetoric.

“It’s unfortunate,” Councilman Doug Shields said. “It was important for him to reiterate a vision for the city. It was not a time or place to condemn the council en masse.”

Ravenstahl said his budget remains essentially unchanged from this year. Yet, it projects unexplained, increased payments from nonprofit organizations in lieu of taxes. The city budgeted $2.8 million from nonprofits for 2011 — but under the mayor’s five-year plan, that number would jump to $20 million in 2012, and no money from nonprofits is budgeted for years following. Nonprofits were projected to pay $1.7 million this year.

The budget needs approval by council and the Intergovernmental Cooperation Authority, a state agency overseeing the city’s finances.

Henry Sciortino, head of the ICA, said he would review the document, and distributed it to the authority’s board.

“Despite all the gnashing of teeth, we have a balanced budget that actually generates a surplus, and that’s good news for Pittsburgh,” City Controller Michael Lamb said.

The city must get its pensions to 50 percent funding level by year’s end, or the state will manage the retirement accounts. The city needs at least $220 million to do so but doesn’t have the money or a plan to raise it. Ravenstahl warned that without an infusion of cash, the annual payment for pensions would be $91 million in 2016 and $160 million by 2030.

The pain would not be immediate, though. This year, the city contributed $60 million to pensions and would put about $45 million in yearly for a couple of years.

Eight council members — everyone except Shields — met with Ravenstahl after his budget address to talk about possible compromises on plans to raise money for the pensions.

“Nothing definitive is on the table, but the lines of communication remain open,” Councilman Bruce Kraus said.

“We have no intention of selling ourselves short, and no plan to initiate debt that will destroy future generations,” Council President Darlene Harris said.

Robert Strauss, a professor of economics and public policy at Carnegie Mellon University, warned other factors are looming that officials aren’t discussing publicly: rising costs of health insurance costs and workers’ compensation; property reassessments; and how the economy might affect wage tax collections.

“The pension skirmish is just one of a matrix of issues, and I don’t see the underlying political will to address the issue on increasing revenues through a commuter tax,” Strauss said.

Additional Information:

Budget highlights

• Total budget: $456 million, with expenditures of $447 million, leaving a surplus of nearly $9 million

• Operating budget: $208 million, down $4.5 million from 2010

• Capital budget: $52 million, including $25 million from the city’s PAYGO funds, $16 million in Community Development Block Grant money, and $11 million from other sources

• $5 million for vehicles

• $3.3 million for demolition of abandoned structures, down $700,000 from 2010

• $9 million for street resurfacing, up from $8.5 million in 2010

• $7 million for Urban Redevelopment Authority initiatives


TribLIVE commenting policy

You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.

We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.

While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.

We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers

We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.

We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.

We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.

We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.