14-pittsburghs-path-to-prosperity-a-roadmap-out-of-act-47-status

Path, Woods Hole, MA, a Creative Commons Attribution (2.0) image from joefutrelle’s photostream

The decision to enter Act 47 state oversight was one of the most difficult I have ever had to make as an elected official. In the dark days of 2003 and 2004, we were faced with an impossible choice: allow the City of Pittsburgh to descend into bankruptcy and financial ruin or enter Act 47 status to reduce our spending and right-size our city government. I rallied five Council members to take the latter path. We knew it would be difficult and that it would require sacrifices from many hard-working people across city government. But we also knew it was our only real choice. Bankruptcy would have meant crushing new taxes on every resident of Pittsburgh, a devastating reduction of services, and an exodus of businesses and investors from our city.

We spent many long weeks and months negotiating with legislators in Harrisburg to craft a package of state aid, government reforms, small business tax cuts, and a modest tax for suburban residents who work in Pittsburgh. Taken together, these steps would be a roadmap back to fiscal health and sustainability. Unfortunately last-minute backroom deals in Harrisburg and the efforts of suburban legislators led by former Senators Jane Orie and Jack Wagner left Pittsburghers without the additional resources we were promised. Nonetheless, we worked together for the past 10 years to weather the storm and have emerged that much stronger for it. Pittsburgh has come roaring back. We have reduced our debt load, we have brought businesses back into the city and new residents along with them, we have revitalized neighborhoods that haven’t seen investment in years, and we have rebuilt our reputation among bond traders. But there is still much work to do to ensure that we continue on the path to prosperity and that old habits of borrowing too much and spending without care don’t reemerge and plunge us back into the red.

1. Pittsburgh’s Path to Prosperity

Pittsburgh is almost out of the woods. We need a Mayor who understands what it is going to take to get us past these last few hurdles and onto the path to prosperity. We are at a crossroads right now; a critical juncture at which we can take the right path and move forward or the wrong path and slide backward.

First, we must expedite the complete installation and activation of the professional financial accounting system that I have been pushing for years and that this administration has been delaying for years. In the recently released Intergovernmental Cooperation Authority 2012 Annual Report the ICA notes that had this system been operational years ago we could have caught the alleged fraud and graft within the Pittsburgh Bureau of Police before it escalated to the level it has today. Without a comprehensive professional system for managing our finances we are left without the tools that we need to provide the fiscal control that Pittsburgh taxpayers deserve.

Second, we have to finish implementing the agreed-upon recommendations from the second Act 47 Five Year Recovery Plan. These include major cost-saving measures like sharing bulk-purchasing with the County, implementing a facilities management plan, consolidating management of RAD parks and expanding the network, better managing our vehicle fleet, and finding efficiencies in our energy purchasing and use. These reforms would save the taxpayers tens of millions of dollars over time and free up money in the budget to reduce borrowing and invest more in neighborhoods.

Third, we must reach the 2018 “debt cliff” without borrowing substantial new sums of money. In 2018 legacy costs from past borrowings begin to fall off dramatically and the city will spend nearly half as much on paying back our debt as we do now. This will free up tens of millions of dollars that we can invest into our neighborhoods. However, if we borrow irresponsibly between now and 2018 and make poor spending decisions then this opportunity will be lost and our debt payments will remain far too high far too long into the future to truly make the investments we need to build a Pittsburgh that works for everyone. We have to use this window to create a new sensible five-year economic plan that will carry us into the opportunity that awaits in 2018.

Finally, Pittsburgh has to have a strong voice in Harrisburg to push for the common-sense reforms we need to grow our tax base and provide a better quality of life for all of our residents. This means reforming the property tax assessment system to protect low- and moderate-income homeowners and seniors, reforming our pension system to protect workers and achieve solvency, reforming transportation and infrastructure funding to protect and expand public transportation, and reforming economic development programs to ensure that state and federal dollars are going to the communities that need them most and are going to the projects that will best enhance growth and prosperity in those communities.

I’ve been fighting for Pittsburgh’s Path to Prosperity for more than a decade. I know what needs to be done and I know how to do it. I have built partnerships across the Commonwealth of Pennsylvania and beyond that will work to help make it possible. I am ready to get to work with you to make this vision a reality and make Pittsburgh the city we know it can be.