Tube City Almanac

April 06, 2011

Federal Budget Standoff Jeopardizes City's Finances

Category: News || By

The "path to prosperity" unveiled last week by U.S. House Republicans looks more like the "road to ruin" to local officials in places like McKeesport.

If the budget cuts currently proposed in Congress take effect, the city would lose two-thirds of its community development money, or more than $800,000, says Bethany Budd Bauer, community development director.

That will translate directly into fewer police officers for "saturation patrols" of high-crime areas and fewer blighted houses being demolished. But it also will make it harder for the city to pay off debts incurred for a new fire engine and river-rescue boat.

. . .

It's a hit that the city's finances --- already precarious --- just can't take. "If that two-thirds went away, we'd have a major problem," says Dennis Pittman, city administrator.

City Councilman Darryl Segina says such a drastic cut would "grease the slides" to Act 47 municipal bankruptcy. He blames the shift in control in the U.S. House of Representatives from the Democratic Party --- which is generally more favorable to inner-city and urban needs --- to a Republican majority.

"I hope everyone remembers who they put in charge of our federal government," says Segina, a longtime Democrat. "Be careful when you vote, because every level of government affects you."

. . .

At issue is more than $33 billion (some sources say $34.5 billion) in spending cuts planned for the rest of the federal fiscal year. Some congressional Republicans are holding out for cuts of up to $62 billion this year.

In the short-term, a pending federal government shutdown on Friday could make it even harder for the city to pay its bills. Federal grant money promised for several purchases and projects hasn't yet been disbursed. Since January, Bauer says, the city has been subsidizing those costs from its general fund while it awaits those payments.

The community development money, awarded to financially needy communities by the federal Department of Housing and Urban Development, helps to pay for things like demolition of abandoned houses, subsidies for low-income home financing, police and fire equipment, and salaries for police officers, Bauer says.

Last year, community development grants also were used to retire debt on the Palisades ballroom and McKees Point Marina, she says.

. . .

A loss of community development money will also affect $350,000 in bond payments, Pittman says, which would have to be paid before any other obligations are satisfied.

McKeesport was scheduled to receive $1.3 million in community development block grants in 2011, representing about 7 percent of its $19.5 million budget.

City officials initially thought the community development budget cut would take effect in 2012. Instead, they're being told that the federal government would pull back on money already promised for 2011.

Pittman, Bauer and Mayor Regis McLaughlin recently participated in a conference call with U.S. Sen. Bob Casey Jr. and dozens of other municipal officials, but received little in the way of positive news.

. . .

With the House Republican leadership recommending $6.2 trillion in cuts to domestic spending --- especially for social programs --- over the next decade, political analysts say that virtually no area will be spared.

Even under a best-case scenario, Bauer says, the city's share of community development money will probably be cut 10 to 15 percent.

"Essentially, we are now flying blind, waiting to see what's going to happen," Bauer says. "We just don't know where this is going to land."

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Feedback on “Federal Budget Standoff Jeopardizes City's Finances”

Everyone who didn’t vote: Good for you. This is what apathy looks like.

Everyone who voted Repugnant: Good for you. Hopefully you get what you asked for.

Everyone else: Get out while you still can.
John - April 07, 2011



How long has McKeesport existed without a river rescue boat ? Where in the constitution does it say I should pay for a marina (that I can’t afford a boat to be able to use) ? Shouldn’t I be allowed to use the Palisades for free since I paid for it ? No, let’s tear down the Palisades and build a couple of new stadia and an arena with tax dollars… Sooner or later people, things need to be paid for. The nice Democrats who want to BUY your vote with the lure of a marina or “free” this and “free” that can’t keep stealing from the “rich” and giving to the “poor”. Otherwise, why work ? If we’re all poor, the Gov’t will take care of us—-unless everyone quits working and only the “poor” are left….
Jay Ross - April 08, 2011



But where does it end?

Public-works funding and grant money has to come from “somewhere”...it comes from taxes we all pay at the federal level.

That federal pot is no longer the deep pocket it used to be.

Things have top be cut and trimmed back, just like any of us have to cut back on things when our pay is cut or stopped.

So you have to question yourself…are you willing to pay more in taxes at the federal level and hope some of it trickles down, or would you prefer to pay more local tax and have a better hand in where it goes?
shadango - April 08, 2011



Jay,

So the government shouldn’t spend any money to invest in communities? Do you like the 19th century? That was an OK time in your opinion?

Shadango,

You are correct, we shouldn’t spend more than we take in and no doubt there needs to be some belt tightening. But whose belt? The problem with the sacrifices put forth by those in the House is that they are not shared. As to local taxes picking up a larger share of services, it sounds like a good idea. Unless of course your community is a certain Mon Valley town with very little tax base. Is it fair for the people of a community with a larger tax base to be able to provide its people with better police protection than a poorer community?
Dan - April 08, 2011



Dan,

Is it fair for a community 1000 miles away to have it’s tax dollars pay for a marina in McKeesport ? Is it fair for a guy to bust his *ss 70 hours a week and who in the process ends up making in excess of $250K to be taxed differently than someone who makes $40K per year ? SO that he can pay for somebody’s EBT card (that lives in a family than hasn’t worked for three generations ?)
We need responsibility ,from us personally as well as from our government.

Bring back the good ole CONSTITUTION and put the Federal Government on a crash diet.
Let the private sector build a marina or a banquet hall or whatever instead of wasting money on a hole under the Allegheny River or a new stadium that the average guy can’t afford to take his family to…
Jay Ross - April 09, 2011



> Is it fair for a community 1000 miles away to have it’s tax
> dollars pay for a marina in McKeesport ? Is it fair for a guy
> to bust his *ss 70 hours a week and who in the process ends up
> making in excess of $250K to be taxed differently than someone
> who makes $40K per year ? SO that he can pay for somebody’s EBT
> card (that lives in a family than hasn’t worked for three
> generations ?)

You might as well ask, “Is it fair for taxpayers in McKeesport to pay taxes for air-traffic control? They don’t have an airport.”

Or, “Is it fair for taxpayers in McKeesport to pay for maintenance of interstate highways? They don’t have an interstate.”

Or, “Is it fair for taxpayers in McKeesport to pay for the state police to patrol Hempfield Township? McKeesport pays for its own police protection, why doesn’t Hempfield?”

The idea of a government is that everyone pays taxes for services and facilities that benefit entire regions, or society as a whole, and which individual communities could not pay for themselves. It’s Civics 101.

Otherwise, you might as well go back to the middle ages. Turn each community into a kingdom, and when Duquesne needs something, it can sack West Mifflin. If Pittsburgh needs something, it can pillage Fox Chapel.

Or, if you like, visit Rwanda and Somalia, and tell me how their experiments in Social Darwinism are working out.
Webmaster - April 09, 2011



And when we can’t make our interest payments, we can become servants of the Chinese…...quit spending what you ain’t got, Dan
Jay Ross - April 09, 2011



I love this article from today’s Washington Post:

http://wapo.st/fPKg68

I especially like this quote:

“With government, too much money goes to special-interest groups,” said Bud Rogers, an oil-field supervisor from Elk City. “I sometimes wonder whether government makes any difference economically, at least to me.”

An oil field supervisor….decrying special interests. I don’t know whether to laugh or cry.

Everyone is always ready to give up things the government does for other people. I don’t know where you live Jay, but I would wager the government has a bigger role in your well being than you’d like to admit. Can you come up with two benefits you get (or will get in the future) from the government? They don’t have to be direct…they can be indirect. For example, no highway funding for your community.

To be fair, I’ll go first.

1) I agree to be means tested for future social security payments. If I’ve saved enough money for a good retirement, I’ll take less from the government. After all, it’s supposed to be insurance against poverty, not a check to cruise the Mediterranean.

2) I agree for the Department of Defense to close bases that serve redundant functions in my home state (Virginia). This will negatively impact my state and region as military spending provides many jobs in my area.

As to the “Constitutional” argument, I find this line of argument to be wholly uninformed. Are not the laws passed by Congress and deemed Constitutional by the courts passed under a legal framework defined by the um…Constitution? Really what this argument is is “take things away from other people, and for things I don’t agree with.” And to that I say…pass a law.

Finally, I’m not suggesting we spend more than we bring in. But I think we should be very careful who bears the burden for that balance. Go ahead, tell me that an Ayn Rand fantasy economy will make everyone richer. I’ve got a 150 years of historical proof to hit that hanging curve out of the park.
Dan - April 11, 2011



“ You might as well ask, “Is it fair for taxpayers in McKeesport to pay taxes for air-traffic control? They don’t have an airport. Or, “Is it fair for taxpayers in McKeesport to pay for maintenance of interstate highways? They don’t have an interstate.” “

Everyone chipping in (equally) for infrastructure is one thing.

Special interest programs and such is a completely different situation.

And it is the latter that , I think, is bankrupting this country and our city.

“The idea of a government is that everyone pays taxes for services and facilities that benefit entire regions, or society as a whole, and which individual communities could not pay for themselves. It’s Civics 101.”

You are exactly right.

However, towards that end, you also cannot spend more than you take in.
That’s Economics 101.

Chipping into a bigger pot and then having some “buying power” makes a lot of sense….until all of the individuals in the consortium decide they want what they want and that the pot is deep enough to suport just one more special interest…...before you know it the pot is dry.

Plus, consider that part “that benefits entire regions”.....who makes that call and for what (usually political) reasons is just as key.

“Otherwise, you might as well go back to the middle ages. Turn each community into a kingdom, and when Duquesne needs something, it can sack West Mifflin. If Pittsburgh needs something, it can pillage Fox Chapel.”

We arent far off from that now…....one poor city complains and the richer city has to pay more to “help” that city out because “thats fair”...effectively the “poor city” has plundered the rich city legally. All in the sense of “fairness”.

Well, why isn’t ‘I work hard and want to say where MY money goes” fair?
Shadango - April 11, 2011



I give up !!!! Let’s just send our RAD money to the Federal Gov’t because they know best…......
jay ross - April 12, 2011



“Is it fair for a guy to bust his *ss 70 hours a week and who in the process ends up making in excess of $250K to be taxed differently than someone who makes $40K per year ?”

Yes, absolutely so. Bread and milk don’t cost more when you make a quarter of a million dollars a year, and things like food and water aren’t considered a “privilege.”

Also, just because you’re paid more for your 70 hours a week than a lot of other people doesn’t mean that the work you do is any more important than theirs. Really. Chances are, you use a computer at your job. Try being productive without it, if the $30k/year tech gets offshored to India.
John - April 12, 2011



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