As a preface to this post, I thoroughly expect to be mocked and criticized for supporting Ravenstahl's plan here. Please, feel free.
But I'm trying to figure out why Ravenstahl's new idea to lease the parking garages and take any lump sum profit to throw at the pension fund is bad? How is it not a great idea in fact?
Should the city really be involved in the day-to-day running of parking garages?
Chicago leased their parking garages for 99 years and made $563 Million.
According to the 2007 Annual Report, Pittsburgh Parking Authority appeared to make an operating income of $13 Million.
To offset that, we pay into the pension funds upwards of $38 Million per year. I'm going to make a radical assumption that we could cut that down to $25 Million per year (and cut Parking Authority's profits out of the budget) if we could inject a huge amount of cash into the pension funds. Similarly, we have a relatively small amount of debt associated with the Parking Authority - $100 Million. Chicago had $278 Million. Chicago's garages were only bringing in $5 Million per year as opposed to our profit monsters.
Of course, I have a few questions.
1) Why are people so concerned about parking rates going up? I understand parking is difficult to find and expensive in this city. It's supply and demand. Without the city of Pittsburgh subsidizing parking garages, this will turn into a true capitalist arrangement. The city of Pittsburgh will continue lowering their parking tax rate. And if people continue to fill expensive parking garages, they will be expensive. If people are willing to take the subway from Station Square or the up-and-coming North Shore Connector, they'll save money. They'll save even more money if they take the bus. Will businesses really leave the city because rates go up a few dollars? And will rates really go up more than the market can bear?
2) Is this plan really going to fly in the face of a nation-wide recession? Did Ravenstahl pick some really poor timing to ask folks to pony up a few hundred million dollars? Does any business have that ability right now?
If Ravenstahl pulls this off and can get our pensions to a point where we expect them to be healthily funded, then he might actually earn his landslide victory this time around in spite of his ridiculousness.
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