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Thomas' Adventures in Wonderland

His 2004 budget in hand, the mayor tumbles down the rabbit hole

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Mayor Tom Murphy's annual budget is about as close as Pittsburgh government gets to ceremonial grandeur. Each November, the mayor is led before City Council by one of its members: He is greeted with the applause of an audience consisting largely of mayoral appointees who stand and cheer when he enters.

 

But given the frumpiness of city government, the whole affair has a somewhat shoddy feel -- like a coronation for a royal family who just sold off the linens. Especially this year, when on Nov. 10 Murphy announced plans to have the city designated as financially distressed, a declaration which, under Act 47 of state law, would put it into a kind of receivership. If the state approves the filing, by the end of the year, Pittsburgh's finances could be set by a state appointee bearing the Orwellian title of "Act 47 coordinator."

 

So...what was everybody clapping for again?

 

Compared to the glossy presentation of previous budgets, even the cover of this year's plan looks bare-bones. What's inside is even paltrier: Murphy anticipates taking in $356 million while spending nearly $40 million more than that.

 

State law requires municipal budgets to be balanced, though this isn't the first time Murphy's numbers haven't added up. Last year, the city budgeted $29 million in revenue from taxes it didn't have the power to levy. Murphy hoped the state legislature would give him the necessary authority, but it never did. Perhaps the biggest difference between last year's budget and this one is that we can no longer afford our own illusions.

 

Or can we?

 

Murphy's budget address stressed $40 million in spending cuts, but the balance sheets show expenditures grew by $9 million. And that's not including what the city spends on engineering and construction, which according to the budget summary will cost exactly $0 -- even though more detailed financial statements elsewhere show that it will cost $2.7 million. ("That's why these are called budget drafts," said Finance Director Ellen McLean when shown the discrepancy.)

 

What does show up in the numbers is some wishful thinking about public-safety costs. This time a year ago, Murphy was hoping a merger between the fire bureau and the city's paramedics would generate $15 million in savings. After "endless months of unproductive meetings," as Murphy put it in his address, he has scrapped the merger in favor of a new plan: having local hospitals foot the bill for the city's ambulances. Yet while Murphy's budget assumes the city will be paying 10 percent more for paramedics, it also predicts firefighters will take $7.4 million less in salary...even though it estimates the 905-person payroll will be cut by exactly one job.

 

Unless that one guy was making $7.4 million, it's hard to see where the savings are coming from. McLean and mayoral spokesman Craig Kwiecinski say that's because the city still hopes to negotiate significant savings with the firefighters union. That's right: the same union that Murphy just dissed publicly a few minutes before.

 

The thing is, the 2004 budget isn't really a  plan for managing the city. It's better understood as an attempt to demonstrate that the city's finances are unmanageable. It reads more like John Hinckley's love letters or a homeless guy's cardboard-box conspiracy theories: not as a rational statement, but as a desperate cry for help.

 

In fact, during a press conference following his budget address, Murphy was asked whether a budget with a $40 million deficit was even legal. Murphy didn't give a straight answer ("We talked about that a lot …") but he did note that "one of the criteria" for an Act 47 filing "is if the budget is not balanced."

 

In the topsy-turvy world of Pittsburgh's finances, see, not having a viable financial plan for the city may be the best plan of all. The city is digging itself a hole, all right -- a rabbit hole that leads straight into Wonderland.

 

To be fair, Murphy didn't set out to be the Mad Hatter. When City Councilor Bill Peduto and others began discussing Act 47 a year ago, the mayor's office responded coolly. Act 47 would never do all the great things Peduto believed, an administration source told me: The first thing a coordinator would look to do was raise existing taxes, not create new ones.

 

Many people still argue that today. While Act 47 could allow the city to levy a tax on suburban commuters, no one knows what the coordinator would decide. 

 

Still, Murphy himself now plainly hopes he was wrong about Act 47 before -- and since he was wrong about so much else a year ago, perhaps there's reason for optimism. And if nothing else, the Act 47 filing may finally get the legislature to act. Despite repeated pleas from business and civic leaders over the past year, Republicans have staunchly opposed bailing out the city with new taxes. All they have sought to do is take away the city's power to govern itself -- and even to declare bankruptcy. Instead, they've offered "financial oversight boards" made up of Harrisburg appointees, non-elected officials who could demand budget cuts but who couldn't levy new taxes.

 

In other words, whatever the Act 47 coordinator comes up with, it couldn't be any worse or any less democratic than what Republicans were planning anyway. In fact, Republicans openly feared Act 47 because it might allow the one thing they most deeply oppose: a commuter tax. And while they've pondered stripping the city of its right to claim bankruptcy protection -- a power they'd never strip from their CEO pals -- such an effort now would meet with a veto by Gov. Ed Rendell, a Democrat and Murphy ally. The best way for Republicans to avoid the threat of a commuter tax, in other words, is to do what they should have done all along: act quickly to get Pittsburgh some of the relief it deserves.

 

Murphy is playing his last card -- call it the Queen of Hearts -- and it may yet trump all the jokers arrayed against the city's prospects.

 

In fact, perhaps the most remarkable thing about Murphy's budget presentation was how upbeat it was about what he called a "remarkable moment" in the annals of government finance. In contrast to his tearful announcement in August that he was laying off 700 city workers, he seemed downright chipper...even though the budget he was proposing effectively makes those cuts permanent.

 

Perhaps Murphy's gone mad as a hatter. Then again, as Janis Joplin once sang, freedom is just another word for nothing left to lose. By that standard, Murphy and his constituents may be the most liberated people on earth.

 

Maybe that's why they cheered Murphy on his way out the door.

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