State Senate Majority Whip Jane Orie says she's preparing a letter to Pittsburgh's oversight board, asking it to warn City Council: by freezing the parking tax rate, council risks a cutoff of all state funds to the city. The ability to impose that penalty is one of the powers granted to the oversight board by state lawmakers. Pittsburgh's financial recovery plan approved by the Pennsylvania legislature requires that the parking tax be scaled back. That was part of the trade-off in exchange for additional taxing powers granted to the city, including the annual $52 emergency municipal services tax.
Councilman Jim Motznik, the sponsor of the legislation, had hoped that council's passing of the freeze would provide the basis for a conversation with state lawmakers in Harrisburg next week. Orie's reaction does not bode well for that conversation.
Motznik argues that parking lot and garage operators did not pass along this year's parking tax cut to consumers. His bill would lock in this year's parking tax rate at 45 percent instead of lowering it to 40 percent for 2008. His legislation dedicates revenues from the five percent difference to making payments on the city's debt and pension fund obligations. [PG & Trib coverage of the issue.]
You can watch video of my Channel 4 Action News report on the Pittsburgh Channel.
Here are some key quotes from my interviews with Orie and Motznik. They were conducted separately on Tuesday.
• "It violates the spirit and letter of the law. It's in complete violation of the state law. This was negotiated in a bi-partisan fashion."
• "Right now,what Councilman Motznik is doing is a back door tax on the backs of the commuters."
• "It's irresponsible for them to have passed this. I believe there is no support in the legislature to do this."
• "There are ramifications for violating the law, and they could lose state moneys. That alerts them them, you are taking an action in violation, this is what is at risk."
• "Under state law, if they want to play this game---and it's really sad, because they're violating the letter of the law--not only can the state withhold funding. The state, because it's a state created city parking authority, we can force them to reduce the rates."
• "I don't feel that it's illegal. We here on council control old taxes, new taxes, what tax rates are going to be."
• "I think it helps the cause in Harrisburg, because it shows that we're being fiscally responsible with the funds that we would have lost."
• "It gives us a few months to take something to Harrisburg and try to work out an agreement."
• "Worst case scenario, we don't agree, then we're headed for probably some legal problems. But the idea is not to fight with the legislature."
Wednesday, October 10, 2007