New Pension Plan An Affront to City Residents

In December, the Publius Foundation released a briefing outlining our position on the City of Pittsburgh pension fund issue.  At the time, our position focused on the proposal to use a long term lease of city-controlled parking assets to secure the required funds to avoid a state takeover of the pension fund.  The Publius Foundation advocated the use of a free market approach to raise the necessary funds.  With the latest plan, the Council is seeking to use the anticipated value of parking revenue via rate increases and taxes to bring the pension fund up to the minimum requirement.

Perhaps lost in this whole discussion is that all of the various plans and proposals were only to get the pension funded up to 50 percent.  This is not a healthy, fully funded pension fund.  It is only 50 percent funded and that itself is contingent on the assumption that the revenue from taxes and rate increases will appreciate to the expected value.  As elected officials sworn to do right by their constituents, it is shocking that 50 percent is what our leaders feel is acceptable or appropriate.  As students, we know that you cannot pass an exam with only 50 percent of the questions correctly answered.  Perhaps residents of Pittsburgh would be satisfied with the local baseball club winning half of their games, but we should not allow our elected officials to continue operating at such a failing grade.

While some may applauded the City for maintaining control of the pension fund (as opposed to the anticipated state takeover), others contend that the difference between what the City will be paying into the fund versus what the state would have mandated could be negligible.  So why the contentious fight?  Was it a matter of city pride?  While the facts are still coming in, it will be interesting to discover how the City will defend mortgaging the future to save a few dollars in pension fund contributions.

At this time, the state is still reviewing whether or not this latest plan by the City of Pittsburgh will succeed is staving off a state takeover of the pension fund.  Regardless of how the state decides during it’s review, the Publius Foundation will again urge the Pittsburgh City Council, the Mayor’s office and the residents of the region to explore and support private and free market options to this pressing problem.