Tuesday, October 02, 2007

fiscal policy

Apparently Mark DeSantis released his plan for Pittsburgh’s Financial Recovery today. This one seemed like a quiet release to me. I had to search on “DeSantis” on the PG website at lunch time to find an article on it, though it was (is) front and center on the “DeSantis for Mayor” website.

In the introduction for his plan, DeSantis suggests that the Mayor's five year plan is heading the city into bankruptcy. Considering that the Mayor seems to be expecting the state to bail out the pension and possibly the debt issues, he might have a point.

DeSantis' plan is divided into six parts, which I will just highlight. First is an annual 1% reduction in spending, second is doing more with less as a culture, third is merging as much city and county services as possible, fourth is auctioning off city owned properties (those tax lien things), fifth is reducing pension liabilities and debt and six is reducing business taxes.

A lot of these ideas would not survive contact with city council. In the real world, a republican mayor would have to make some compromises. But these proposals may help DeSantis raise money for his campaign, because they will appeal to the business community (even the part, or maybe particularly the part about not going bankrupt).

To say the plans seems draconian seems inadequate. Actually, I overstate a bit, but I can’t imagine any city workers cheering at this budget, although it does promise no layoffs. Instead, DeSantis suggests a hiring freeze, and using attrition to “rightsize” the city workforce. City workers would end up working harder and would see smaller raises than under Ravenstahl. I suspect that some slots would be refilled no matter what, but I also believe DeSantis has a better chance at making this work than a democrat like the current Mayor would. DeSantis is also proposing lowering some taxes starting in 2011, to improve the business climate in the city. That’s tricky in a city like ours, with so much debt, but we need to do something besides having our Mayor go on Letterman to promote the city.

Again, there is not a PDF available, but the cut and pasted press release ran 7 pages in Word. Certainly better than either the Mayor’s campaign website, or his pseudo campaign site; www.city.pittsburgh.pa.us.


Schultz said...

Hello Ed. The PG posted the PDF. If you do not have it already here is the URL.

Schultz said...


Desantis Plan

Adam said...

I don't see how the plan that cuts spending and actually treats city workers a little tiny bit like they work in the real world and not fantasy land where you just demand whatever you want and get it from your employer. I'd say if anything is draconian it's the way the unions currently treat this city And they've treated us that way right into bankruptcy.

The really bad part is that when a union in a private sector (see GM) negotiates itself out of jobs and its company into bankruptcy, people usually lose jobs when the company shuts down or has to partially shut down because of the stranglehold the union has put on it. With a city, it can't really just go out of business, so there is even less threat to the unions not to strangle the city to near death.

Cutting costs and increasing efficiency is not draconian.

EdHeath said...

Thanks, Schultz (Chris). I "celebrate" the pdf in today's post (I am enjoying Jonathan Potts pointer to the "Unecessary quotation marks blog").

Adam, I have nevber been in a union but I have been in businesses that were trying to operate as a "lean" company. It's no fun, but you bear down and do it, because that's the job. I do think city workers were a lot like you described, but that was twenty years ago. I know there have been exposes of public works workers spending hours in doughnut shops, and there should be exposes of cops sleeping in the parks, but I actually do think they are the exceptions now, not the rule. So I do have some sympathy for city workers, but I hope they see there is a real possibility of the state coming in and arbitrarily laying off workers, raising city taxes and cutting services. That's what city bankruptcy would mean.

Adam said...

I'm not questioning the work ethic of the city workers. I'm questioning their pay/benefits compared to what they would be able to expect in the real world.

Take for extreme examples the pay/benefits of PAT workers who drive the trolleys. There is no way they could realistically expect their current rate of pay for the amount of skill it takes to do their job (the "cashiers" at Trolley stops aren't even allowed to take money or make change...they literally do almost nothing, the one at my stop each morning is watching tv in her booth AND text messaging at the same time she is working). Their skill level and duties are below that of a cashier at Giant Eagle, yet they have pay and benefits better than most college graduates in our city.

In the real world their pay rates are unrealistic, as well as their expectation to not conrtribute to their own health care and have almost no chance of being fired for anything. That is the result of the city bowing to the draconian demands of the city unions.

The main difference here between the city and the real world economy is that if a company (see GM) does this repeatedly they will eventually pay consequences and be forced out of business. The unions' bargaining tactics and demands are draconian, not Mr. Desantis's desire to bring cost cutting and efficiency to city government.

EdHeath said...

Adam, I understand where you are coming from with this, and I agree with some of what you say. I think in some sense you are questioning the work ethic of the city's workers, although I understand you are blaming the unions and the lack of real world competition pressures for the low productivity relative to pay of city workers.

Let’s be clear, PAT is a county agency, not controlled by the city. Teachers, who work hard but oppose a longer school day (like Europeans have) have their own governing board. So some unionized public sector employees are not directly controlled by the city.

And lots of city jobs do have real world counterparts. Administrative, accounting and IT functions all have private sector counterparts, so it is easier to set wages and expected productivity levels in those jobs.

But at the end of the day the point is I do support and agree with DeSantis’ proposal for city fiscal reform. I just also sympathize with city workers, because I believe they work hard (most of them) and with a hiring freeze, they are going to have to work harder. I don’t think they brought it on themselves, I think we all brought it on ourselves when we voted for O’Connor, who clearly thought Act 47 ended when Murphy left office.