Thursday, December 30, 2010

Dedicated Funding Streams 101

You may (like me) have spent the last week gorging on Christmas treats and entertaining travelers stranded in Pittsburgh because of the crippling East Coast snowstorm. However, Pittsburgh City Council has been spending their holidays coming up with last-minute solutions to avoid a potentially disastrous state take-over of the city's pensions at the end of the year.

The latest political buzzword is "Dedicated Funding Stream." The idea is as old as dirt, though. Many of us set aside money every paycheck to contribute to our 401Ks. That's a simple dedicated funding stream. Instead of getting your whole paycheck, plopping it into one big checking account, then deciding how to divvy things up, you set aside a fixed percentage every month to your future retirement that you can't change without lots of annoying paperwork.

Allegheny County's Drink Tax
Back in 2007, County Executive Dan Onorato and his council passed the extraordinarily controversial Drink tax, dedicating 10% of every tipple consumed in the county to pay for the County's share of Port Authority expenses. Now, when it's time to pay Port Authority, the Council doesn't have to slice a piece of the budget pie - that money is already set aside.

City Council's Proposal?
Pittsburgh City Council wants to dedicate future parking rate increase profits to funding the Pittsburgh pensions. I, for one, am a fan of this method. Much like we don't sell our house and put the profits in our 401K and hope for the best, just to get all our savings wiped out in a bad market downturn, we regularly contribute to our future, exercising "Dollar Cost Averaging." If you need an extra reminder why plopping a giant wad of cash onto the problem doesn't fix the problem, you need to only look back to the year 1998 in Pittsburgh. That's when then-Mayor Murphy sold over $250 Million in bonds to shore up the pension fund. All that money has since disappeared in stock market dive after stock market dive while the city continued to contribute the minimum amount possible each year.

What's Next? Will Harrisburg also jump on the dedicated funding stream bandwagon? One can only hope. As it stands now, the Pennsylvania state legislature can barely pass budgets on time while it attempts to divvy up its giant general fund. Most of the time, Port Authority gets the shaft. Let's take the control out of the hands of selfish state legislators and add some transparency to the budgeting process instead of last-minute shady deals to pass the budget. Heck, maybe the Federal government could even learn some lessons here? If I can manage my own budget, surely our governments with their teams of Ph.D. degree-holders and economists should be able to as well.

Wednesday, December 15, 2010

Downtown Parking Thanksgiving

Mr Benter of the Benter Foundation got fed up with searching for parking downtown, so he directed his foundation to spend $175,000 to develop ParkPGH. Currently, the application-website tells users the availability of parking at 8 downtown garages in the Cultural District.

In January, ParkPGH will add a ninth location, the parking authority garage at Ninth Street and Penn Avenue. At that point, the system will encompass 5,300 spaces -- 25 percent of Downtown garage capacity.

If I'm doing the math correctly, that means there are 21,200 parking spaces available in downtown parking garages.

The system potentially benefits 2 million annual Cultural District visitors and about 150,000 daily Downtown commuters.

So we have 21,2000 parking spaces available downtown for 150,000 daily commuters. That means the vast majority of downtown workers park elsewhere and walk or take public transportation downtown.

On Tuesday night, the Southwestern Pennsylvania Commission narrowly voted to bail out Port Authority with an extra $45 Million they had lying around - on the condition that Port Authority still implements some cuts in March. When Port Authority enacts its slightly less catastrophic 15% compromise service cuts in March, at least all those stranded downtown workers will be able to watch the parking garages fill in real-time on their iPhone.

And to make it a parking trifecta this week, Pittsburgh City Council is fast-tracking a plan to lease our parking garages and bail out the city's own pension fund. The good news? The garages will only be leased for 40 years (instead of 50) and the city will be eligible for profit-sharing from the garages. The bad news? They're still leasing the parking meters and giving up control over parking throughout the city and not ultimately solving the city's long-term pension woes.

So in summary, thanks to Mr Benter for actually getting something done. Thanks to the Southwest Pennsylvania Commission for stepping in where the state repeatedly refuses to tread - even if the money comes with strings attached. And thanks that I'm not a Pittsburgh City Councilor stuck between a rock and a hard place.

Thursday, December 2, 2010

Happy Hanukkah from Governor Rendell!

Governor Rendell has put me in the holiday spirit! He just announced funding for averting catastrophic Port Authority service cuts in March.

Once again, a one-time emergency fix has bailed out the long-suffering public transportation agency. Once again, the ball is back in the State's court to come up with a dedicated funding stream for transit. Perhaps Governor Corbett can rename the Johnstown Flood Tax, which has been making a mockery of that catastrophe for decades in the name of slush funding, to the Public Transportation tax, making a strong stand in this state that if you buy liquor you're funding the drunk buses. Perhaps, they can also start issuing busperks for each case of beer you buy?

Honestly, not only did Rendell save my bus line (and dozens of others) with his dogged attempts to not give up on public transportation even in his final days of office, he also saved this blog. There's only so much defeat this blogger can overcome. So you have one more year of decent bus service, and one more year of me blogging.

Happy holidays!