Monday, January 26, 2009

Things I'm Not Quite Sure About pt. 2

I'm not quite sure about the proposal to sell or lease Pittsburgh's parking garages to a private firm in order to provide cash to fund the ongoing pension obligations.

So the primary reason to do this, of course, is to offset the huuuuuuge deficit we have in the pension fund, about $600 million or so right now, based on my hasty math. That amount is bad and it's eating into the City's ability to do other stuff or lower local taxes, depending on which side of the economic coin you favor.

Now, the problem is that the pension obligation isn't really going down (well, unless there's a culling of the the retiree population). A pension obligation will continue into the foreseeable future, so a one time sale will provide a one time influx of cash. This will balance the budget in the short term, but will not necessarily be a sustainable solution.

I suppose there's a long term solution if the City wisely invested this money in the stock market (*snicker*) or some sort of (*chuckle*) investment bank or (*guffaws*) municipal credit default swaps. (*wipes tears from eye*) But seriously folks, they might as well just invest in Hummel figurines.

Let's step back a second. Is this kind of sale even really legal? Isn't the Parking Authority a separate legal entity? Isn't its obligation to its own bond holders and not the City's? I can't really wrap my heads around what amounts to parents telling their kids to pay the parents' credit card bills. Maybe it's just me.

And finally, I'm not the kind of person that believes that the government should own everything, but what the parking tax debacle has taught us is that the private market understands that the price of parking in Downtown is sticky. When the tax went down, prices in private lots stayed up; only the Parking Authority (after political pressure, admittedly) reduced their rates. So, I can see some advantage to keeping some measure of control on these prices for the public good.

Again, I'm not quite sure of all this and I hope folks that understand this kind of stuff more than me will be able to work it out. (*snicker*)


Anonymous said...

Yep, that's pretty much what I've been thinking.

Bram Reichbaum said...

Since the windfall from the Parking Authority sale would first go to clear the debt of the Parking Authority, I'm not sure how much less will be available for pensions. Would it be like $200 million? Sounds like a big number, but that's how much our pension obligations have been known to jump in a financial quarter. Right?

Anonymous said...

There are inherent inequities between various pension plans.

$ for $

Regular Joes and Janes contributing to Municipal Plan are being robbed by "Heroes" contributing to Fire and Police Plans.

The debt is a shell game, and will not withstand scrutiny by media or actuaries.

snicker, haha, kersnockel!

Bring on the study!


Anonymous said...

Ever here of the "Pension Rebate Plan" contained in contracts for 'Heroes" in Public Safety?

It is called 'longevity pay'.

Longevity pay may exceed pension contributions made by both Police and Fire recipients.

They do not contribute to Social Security....exempt status.

The 7.25 % we pay for Social tucked in their pockets....

When was last time you received a 7.25% raise?


Anonymous said...

Sent friend following...Maybe I am "Nuts". Dream, on..

"I know this may seem a bit inappropriate.

Have to jot down dream I had during night of January 25th 2009.

Unbeknown to me your dad passed on January 22nd….missed some emails.

I dreamt, that I received a non-moving violation at a price of $107.42. Was about to protest, thought it should be $41.50.

Accepted responsibility and decide not to challenge over a difference so small.


And, then reawakened to find myself on a sweet summers day in a place only dreams could be made of. Large pool of water, swimming pool, with all the amenities. Walking around thinking lucky me…

Dark haired girls, twins, flat chested…young. Even younger yet girl of about 7 or 8.

Many around.

The veranda was spacious. There was a jar with sea shells in water. On the bottom pale white and as you looked to top many layered colors. Beautiful.

My attention was drawn to an old man by a stranger. The stranger said run... it is 911! I felt fear the old man felt none. Through the eyes of the stranger I saw the apocalypse…but it was the warmth of an old man that I felt.

I climbed out of bed a bit shaken, and the said out loud that someone has died.

Maybe to much beer, hot turkey sandwiches and Johnny Cash music?

Who knows?


Soothsayers...chime in!