No one runs for elective office hoping that someday they will have to raise taxes. But on December 6th we voted for a one mill increase because we believed—based on all of the available information and testimony—that this decision was in the best interest of our constituents, and all the citizens of Allegheny County. As two of the 11 members of the Allegheny County Council who voted to raise the millage from 4.69 to 5.69, we want to make sure you understand why we took this difficult step.
In late October our current county executive, Dan Onorato, presented his 2012 Comprehensive Financial Plan. The proposed operating budget was $730.5 million—a decrease of $37.2 million from the 2011 approved operating budget. The decrease proposed by Onorato was largely the result of reduced funding by the federal government ($4.2 million) and reduced funding by the state government ($29 million). When he made his presentation to Council, he called this budget “the new reality” and used the same millage and assessment numbers as he has for the last seven years.
So who were targeted for cuts in the proposed budget? The better question would be who wasn’t? CCAC, which puts many of our citizens on the road to careers, would have taken the largest General Fund cut. The Department of Human Services which provides safety net services for those most in need, also saw cuts that would have devastated existing programming. Every other department, except the Kane Regional Centers, received a percentage cut, and several directors made it clear that the amounts budgeted for their departments would not allow them to meet their contractual obligations.
As dire as a potential decrease of over $37 million might sound, the reality is much worse. Most CPAs look for a balance between current year revenues and current year expenditures when evaluating fiscal health. While the county’s unassigned fund balance has remained relatively steady over the last few years, this has only been accomplished with an infusion of “one-time” revenues. According to County Controller Mark Flaherty, the current County Executive has used $184.8 million in a variety of “one-time” adjustments over the last five years “to ensure revenues were sufficient to meet operating expenditures.” These include fixes such as selling tax receivables to produce a cash windfall, to using Penn DOT reimbursements for capital expenditures to pay operating expenses. These kinds of accounting maneuvers should only be used in extreme circumstances—and Council has sometimes gone along with this approach in the past—but eventually you reach the day of reckoning. In 2010 according to the County’s audited financial statements, current year expenditures exceeded current year revenues by almost $31 million. Projections for 2011 continue this trend.
That is the background to the actions taken by County Council on December 6th. The one mill increase that we voted for will bring in approximately $55 million based on the current assessed value of Allegheny County property. In essence, as Council Member Futules noted, we’re simply trying to get back to the starting line.
In reference to the reassessment which is a concern to many of our citizens, we can’t predict the future. As we write this, we don’t know what the total assessed value of Allegheny County property will be post-assessment, nor do we know when the numbers will be certified, or what year the court will ultimately determine as the assessment year. We simply know that we need more revenue to operate county government responsibly for 2012. We are well aware of the state’s anti-windfall legislation and we intend to comply with those provisions.
Elective offices for a few of us may hang in the balance, but we suggest that you listen online to Council Member Ellenbogen who spoke plainly about the effects on services the last time the county budget sustained the level of cuts proposed by Onorato for 2012. At that time Ellenbogen served as a Public Works supervisor. He saw the grass in the county parks grow to be three feet high. He saw roads go untreated during a snow storm because the “cheaper” salt didn’t do the job. He saw North Park Lake fill with silt due to denial of funds to repair a piece of dredging equipment. And he recently watched in frustration as a multi-million dollar capital project paid for this penny-wise, pound-foolish approach. Ellenbogen said that if he was ever in a position to make sure these things never happened again, he would do something about it. Last week he bravely voted for this tax increase.
Some take the position that elected officials should pledge to never raise taxes. As one of our colleagues noted, that is a pledge to do nothing when something “needs done.” We voted for the tax increase because we promised to always make decisions based on the best long-term interests of the people of Allegheny County. So be it.
Submitted on behalf of William Russell Robinson, chairman, Budget and Finance Committee (District 13) and Barbara Daly Danko (District 11)