HARRISBURG — With only a handful of legislative session days scheduled through early January, the General Assembly must act quickly to give Pittsburgh more taxing authority to avoid having the city become a distressed municipality under Act 47, Sen. Jay Costa, D-Forest Hills, said Wednesday.
Under Act 47, the city will be able to seek a court-ordered income tax to be levied on city residents and suburbanites. The city faces a $42 million deficit next year.
“We have a window of opportunity to avoid Act 47,” Costa said. Other revenue proposals for Pittsburgh, such as an increase in the $10-a-year occupation tax, would take a lighter toll on taxpayers than an income tax under Act 47, Costa said. Mayor Tom Murphy applied last week for Act 47 designation.
Costa told the Senate yesterday that the state Department of Community and Economic Development could make a decision on Murphy’s Act 47 petition by about Jan. 9. The Senate is in session two days next week and tentatively five days in December through Dec. 16.
Costa made the remarks in opposition to S.B. 940, slated for Senate action as early as next week. The bill by Sen. Jane Orie, R-McCandless, and Sen. Jack Wagner, D-Beechview, sets up an oversight board for Pittsburgh, but provides no new revenue for the city. Costa argued that approving a bill without new revenue would assure Pittsburgh’s designation as an Act 47 community.
Meanwhile, the House Finance Committee approved a package of bills that would also establish an oversight board, and would suspend Act 47 for Pittsburgh. The bills provide no new revenue for the city.
“Along with our counterparts in the Senate, we are moving toward a fiscal control board that almost everyone agrees must be put in place,” said Rep. Mike Turzai, R-McCandless, who sponsored the bill along with most of the other Allegheny County Republicans. “In addition, our package of bills calls for financial transparency and fiscal responsibility.”
Sens. Wagner and Sean Logan, D-Monroeville, defended S.B. 940. Both called it “tough love” for Pittsburgh.
“They hold that (Act 47) to our heads. They think we’ll get weak in the knees. We’ll get stronger,” Logan said. “If we take politics aside, the city of Pittsburgh does not qualify under Act 47.”
Wagner said that “mismanagement of our city for multiple years” led to the financial crisis.
Former U.S. Steel Chairman David Roderick — who led a committee that proposed an oversight board, spending cuts and higher taxes on city residents, suburbanites and employers — said “cooler heads will come together” eventually.
The plan developed by the committee led by Roderick and philanthropist Elsie Hillman isn’t being introduced as a bill this late in the game. According to Roderick, there could be an opportunity for the committee’s work to be considered as an amendment or in a conference committee.
“There’s no single bill,” Roderick said. “Clearly, they’ll have to be reconciled.”