Presented by Mr. Shields
Title
Communication from Mayor Luke Ravenstahl submitting a Veto of Council Bill No. 2007-1796, entitled, "Ordinance amending and supplementing the Pittsburgh Code, Title Two, Fiscal, Article VII, Business Related Taxes, Chapter 253 Parking Tax, Subsection 253.02 Levy and Rate, by freezing the rate of taxation at 45% for Budget Year 2008 and directing that funds be earmarked and deposited equally into the Debt Service Reserve Fund and the Comprehensive Municipal Pension Trust Fund."
Attachment
October 17, 2007
President and Members of Council
510 City County Building
Pittsburgh, PA 15219
Dear President and Members of Council:
By way of this communication, I hereby veto City Council Bill #2007-1796, which is the ordinance authorizing a freeze of the parking tax at its current rate of forty-five (45) percent for 2008.
I commend City Council for bringing the conversation to the fore. I plan to continue dialogue with our friends in the state legislature in regard to this matter. In doing so, it is my hope that we can reach an accord ensuring that continued cuts in the parking tax will benefit the parking public, as originally intended.
From the time of my election to City Council, we have worked together to improve the financial health of our city. As Mayor, ensuring Pittsburgh's comprehensive fiscal stability has been at the top of my agenda. Since Pittsburgh entered into Act 47 we have already foregone $66.3 million in revenues projected in the original Act 47 plan, due largely to delays in gaming and the revenues to be derived there from, as well as shortfalls in the payroll preparation tax. Nonetheless, through sound fiscal management, we have grown our fund balance to over $80 million, and by continuing to do more with less, we have continued to reduce expenditures in excess of the requirements in the original Act 47 plan.
As you know, in 2007, Pittsburgh's parking tax was reduced to 45% in the first year of a mandated reduction. The legislative intent of this mandate was to reduce the parking rates paid by consumers. Last year, in response to the reduction of the parking tax from 50% to 45%, the Pittsburgh Parking Authority, at my direction, initiated a "Free Parking Program" allowing free access to public garages on Valentine's Day, the day after Thanksgiving, and every Saturday between Thanksgiving and Christmas. Unfortunately however, according to a City Controller Audit dated June 13, 2007, there were no rate reductions in any of the examined privately owned facilities, nor were there any new programs implemented to benefit the public such as those adopted by the Pittsburgh Parking Authority. In other words, aside from our own "Free Parking Program" none of the mandated cuts in the parking tax have benefited the public as originally intended.
I commend City Council for bringing this conversation to the fore. I plan to continue the dialogue with our friends in the state legislature in regard to this matter. In doing so, it is my hope that we can eventually reach an accord ensuring that any continued cuts in the parking tax will benefit the parking public, as originally intended.
In light of the lack of direct benefit to the consumer, Council has proposed a freeze of parking tax rate cuts with the proceeds to be applied to our inherited long term legacy costs such as debt service payments and pension. I agree in concept with the proposal. For example, by freezing the parking tax rate at 45% the City could infuse more dollars into the current five-year plan, reduce the City's long-term debt obligations and increase funding for our pensions. Additional parking tax revenue from a rate freeze will allow the City to delay new debt issuances for at least five years. Overall savings to the City would be $100 million in deferred debt service.
From the time of my election to City Council, we have worked together to improve the financial health of our city. As Mayor, ensuring Pittsburgh's comprehensive fiscal stability has been at the top of my agenda. Since Pittsburgh entered into Act 47 we have already foregone $66.3 million in revenues projected in the original Act 47 plan, due largely to delays in gaming and the revenues to be derived there from, as well as shortfalls in the payroll preparation tax. Nonetheless, through sound fiscal management, we have grown our fund balance to over $80 million, and by doing more with less, we have continued to reduce expenditures in excess of the requirements in the original Act 47 plan.
However, today I must do the responsible thing by vetoing your bill - as well intentioned as it may be. We must abide by the state law mandating the parking tax reduction and must continue to work with the Commonwealth to continue our shared goal of long term financial health for Pittsburgh.
As you know, in 2007, Pittsburgh's parking tax was reduced to 45% in the first year of a mandated reduction. The legislative intent of this mandate was to reduce the I am committed to directing the Pittsburgh Parking Authority to return the 5% tax reduction scheduled for 2008 directly to the consumer as originally intended. I challenge Pittsburgh's private parking operators to do the same. If the City's private parking operators do not reduce their rates paid by consumers. Lastnext year,, the Pittsburgh Parking Authority, at my direction, initiated a "Free Parking Program" allowing free access to public garages on Valentines Day, the day after Thanksgiving, and every Saturday between Thanksgiving and Christmas. Unfortunately, according to a City Controller Audit dated June 13, 2007, there were no rate reductions in any of the examined privately
owned facilities, nor were there any new programs implemented to benefit the public such as those adopted by the Pittsburgh Parking Authority. In
other words, asidewill expect support from our own "Free Parking Program" none of the mandated cuts in the parking tax have benefited the public as originally intended.partners in Harrisburg.
In light of the lack of direct benefit to the consumer, Council has proposed a freeze of parking tax rate cuts with the proceeds to be applied to our inherited long term legacy costs such as debt service payments and pension. I agree in concept with the proposal. For example, by freezing the parking tax rate at 45% the City could infuse more dollars into the current five-year plan, reduce the City's long-term debt obligations and increase funding for our pensions. Additional parking tax revenue from a rate freeze would allow Pittsburgh to delay new debt issuances for at least five years. In that instance, overall savings to the City would be $100 million in deferred debt service.
Let us continue to work together on this issue to create a brighter future for the City. Please accept this veto in the cooperative spirit in which it is offered. We are on the right track to financial recovery and through partnerships and responsible budgeting we will continue our recovery.
Today, however, I must do the responsible thing by vetoing your bill - as well intentioned as it may be. We must abide by the state law mandating the parking tax reduction until such time as the legislature is willing to revisit the issue. We will work with the Commonwealth to continue our shared goal of long term financial health for Pittsburgh.
I am directing the Pittsburgh Parking Authority to ensure that some portion of the 5% tax reduction scheduled for 2008 benefits the parking public, as the Free Parking Program did in 2007. I call on Pittsburgh's private parking operators to do the same. If, in 2008, the City's private parking operators do not either reduce their rates or implement programs to benefit the parking public in response to the reduction of the tax rate, I will revisit this issue and expect support from our partners in Harrisburg.
Let us continue to work together on this issue to create a brighter future for the City. Please accept this veto in the cooperative spirit in which it is offered. We are on the right track to financial stability and through partnerships and responsible budgeting we can complete our recovery.
Sincerely,
Luke Ravenstahl
Mayor, City of Pittsburgh
Attachment