Thursday, July 1, 2010
To shore up the city's pension fund with a cash infusion, Mayor Luke Ravenstahl has proposed leasing its garages to a private operator in exchange for an upfront sum. Yesterday, the mayor revealed that under that proposal, all-day parking rates Downtown could go up by more than $4 next year, and by more than $10 a day by 2015.
No shock there. After all, why else would private operators be interested in leasing the lots in the first place?
What is surprising, perhaps, is how complacent the early reaction to this news has been -- especially considering the angst parking costs have prompted over the years.
Let's look, for example, at the evolving perspective of Mike Edwards, head of the Pittsburgh Downtown Partnership.
In the fall of 2007, city council had one of those fits of pique for which it is so well known. Under a financial bailout package worked out with the state, the city had previously reduced its parking tax from 50 percent -- among the highest in the nation, critics wailed -- to 45 percent. In 2007, the city was supposed to lower the tax again, but councilors griped that the earlier savings hadn't been passed onto consumers. So they voted 8-1 to keep the tax rate at 45 percent.
At that time, here's what Edwards told the Tribune-Review, when Ravenstahl vetoed council's action:
Pleased with Ravenstahl's decision, Pittsburgh Downtown Partnership President Mike Edwards said: "Keeping it at 45 percent would have increased costs to the public more quickly. It would have made Downtown less competitive."
A year before that, in fact, Edwards had complained that raising the tax to 50 percent in the first place had crippled Downtown:
Since the tax hike, Downtown office leasing has been stagnant and the number of people coming to the city for lunch or shopping has dropped, said Pittsburgh Downtown Partnership President and CEO Mike Edwards.
"We think that's a pretty good indication that the parking tax has had an effect," he said.
So. If a high tax rate made that much difference in 2006 ... and if simply holding steady on tax rates would have been such a hindrance in 2007 ... you'd think that Edwards would be screaming from the rooftops about the prospect of a $4 increase in 2011. Right?
Or not. Here's Edwards in today's Post-Gazette:
Michael Edwards, president and CEO of the Pittsburgh Downtown Partnership, said he's less concerned with rate increases than with making sure they're well publicized so motorists aren't blindsided. He said he believes motorists will pay higher rates to park in a vibrant Downtown.
"We need to make sure Downtown is the greatest experience it can possibly be," he said.
OK, now he's "less concerned with rate increases"? It's a little hard to understand. Back in 2004, when the parking tax was raised to 50 percent in the first place, the expected impact was $3 a day. Now we're told that leasing the lots could raise prices by triple that amount in a couple years ... but Edwards seems remarkably unconcerned.
I don't mean to single Edwards out. Because I'm pretty sure he's not going to be alone in having a curious double standard.
Back in 2007, when the city threatened to freeze the parking tax at 45 percent, it outraged Harrisburg legislators like state Sen. Jane Orie. Orie urged a state oversight panel to sue the city to reduce the rate -- "in order to bring fiscal responsibility to the city of Pittsburgh and its taxpayers." Last year, when Ravenstahl brought up the need for revenue again, state Rep. Mike Turzai insisted that parking taxes needed to come down:
Someone who lives in a suburban municipality with a 1 percent levy on a $60,000 salary, and has a $200-a-month lease at a Downtown garage, pays the city more in parking taxes -- $654 a year -- than they pay their home town in wage taxes.
"It has to go down," said Rep. Mike Turzai, R-Bradford Woods, calling it one of the highest parking taxes in the nation.
Here's a prediction: Rate hikes envisioned when the lots are under private control won't cause the same outrage among GOP reps. (Orie has, of course, spoken warmly of the lease plan, and Turzai has commended the mayor's work on the pension issue.) When a private lot operator raises rates, that's just the wisdom of the free market. But for the city to raise a tax? Why, that's a shocking effort to fleece the hard-working people of Pittsburgh.
Of course, it probably doesn't hurt that Alco Parking operator Merrill Stabile -- who benefits mightily from parking-tax cuts and could probably raise rates further once public lots do the same -- donated $3,000 to Orie's campaign last year. (For that matter, we should mention that Stabile also sits on the Downtown Partnership's board of directors.)
To be fair, Orie had reason to be upset back in 2007. The city was, after all, preparing to welsh on a promise made to Harrisburg. But if parking rates have to go up, we don't need a private operator to raise them: It's one of the few things city officials have proven themselves capable of doing on their own. So why cut a middleman in on the action? Why not earmark the proceeds from a revenue increase so that it can only go to the pension?
The answer seems pretty simple. At this point it's pretty clear that this isn't really about keeping Downtown competitive, or about protecting the suburban commuters Orie and Turzai represent. It's not even really about protecting the city's pensioners. Because shoring up the pension fund is a means to an end, not an end in itself.
UPDATE: As if on cue, council President Darlene Harris has forwarded a letter from Orie and Turzai -- coauthored by Dan Frankel and Jay Costa -- rather forcefully instructing city officials to get on with it.
"The January 1, 2011 date [for having the pension 50 percent funded] is a firm and final deadline," it says. It "will not be extended to accommodate any delays in funding Pittsburgh's pension."
The letter also points out something I forgot to mention previously -- that state officials will let the city raise the parking tax by a tiny little bit (from 37.5 percent to 40 percent). But by state law, that's only if "the city has leased or sold all of its parking authority garages and that net proceeds from the lease or sale have been deposited into the Pennsylvania Municipal Retirement System."
Which of course just proves the point: For all their bitching about unjust tax rates and the burden on commuters, these legislators don't really care about the price of parking, as long as a desired policy goal (privatization) is achieved.
A case can be made that leasing the garages is the only option at this point ... and the fact that Frankel and Costa -- both city Democrats -- have signed on this letter suggests that's where we're headed. But I'd argue that if we are indeed in that position, it's got something to do with state legislators who've used the city's crisis as a means to an end, rather than as a problem to solve.
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