Pitt Study: Pa. municipalities in line to lose $3.4B in tax revenue in next 2 years | Thursday Morning Coffee

June 4, 2020 7:10 am

Good Thursday Morning, Fellow Seekers.

A new University of Pittsburgh study paints a dire picture of the finances of Pennsylvania’s more than 2,500 municipal governments as they struggle to fill a revenue hole ripped open by the COVID-19 pandemic.

The study, released by the university’s Center for Metropolitan Studies, was conducted by George Dougherty, a Pitt assistant professor in the Graduate School of Public and International Affairs, and the school’s Municipal Finance Research Collaborative.

According to the study, the biggest hits to municipal bottom lines include:

  • A 15 to 50 percent loss in amusement tax revenue
  • A 9 to 28 percent loss in earned income tax revenue
  • A 10 to 30 percent hit to business tax collections
  • And a 10 to 40 percent reduction in parking tax revenue

“This is a revenue crisis brought on by the pandemic response rather than an expenditure crisis,” Dougherty said in a statement.

The center’s director, David Miller, said in a statement that “if even 25 percent of those at risk under the two-year medium loss scenario fail to make payroll, pension contributions, or bond payments, more municipalities would be eligible for Act 47 Distressed [state takeover] status than have participated in that program over three decades.”

(University of Pittsburgh, Center for Metropolitan Studies)

Pitt’s experts said they arrived at the projections “using 2018 financial filings submitted to the Pennsylvania Department of Community and Economic Development and an expert panel of municipal managers in southwestern Pennsylvania, led by Ben Estell, the borough manager in Dormont, Pa.

According to Pitt, “the panel was asked to predict the percent losses for major municipal revenue sources under low, medium and high loss scenarios. Because municipalities pursue different revenue strategies, these loss predictions were then applied to the 2018 revenue mix of all 2,459 cities, townships, and borough in the data set to generate the loss figures.”

The Pennsylvania Capitol building. (Capital-Star photo by Sarah Anne Hughes)

Our Stuff.
Stephen Caruso and Patrick Abdalla were on the protest beat on Wednesday, respectively covering events in Harrisburg and northeastern Pennsylvania. In the Capital City, Gov. Tom Wolf marched with protesters, who were looking for answers. And in Wilkes-Barre, teens raised their voice in peaceful protest for three hours.

Elizabeth Hardison has what you need to know about the state’s plans to reopen public schools as soon as July 1.

We’re still doing rolling coverage of results from Tuesday’s primary elections. You’ll find some new material on results from central Pennsylvania’s 10th Congressional District; the Democratic race for auditor general, and a pair of races in Cumberland County.

Voting rights’ advocates warned Wednesday the state could be in for a bumpy ride in November if it fails to heed the lessons of Tuesday’s primary, Julia Shanahan reports.

The Erie Police Department called in quarantined cops to quell violent protests in the City by the Lake over the weekend, Hannah McDonald reports.

The very busy Kim Lyons has three stories: WalMart and Quest Diagnostics have partnered with the state for COVID-19 testingPittsburgh Mayor Bill Peduto has called for a third-party probe of how city police responded to protests. And U.S. Rep. Mike Doyle has prevailed over challenger Jerry Dickinson in the Democratic primary for Pittsburgh’s 18th Congressional District.

Our partners at the Philadelphia Tribune scored an exclusive interview with Joe Biden during his swing through the city on Tuesday. Biden called for a menu of criminal justice reforms, including changes to qualified immunity.

And our partners at the Pittsburgh Current say the Pittsburgh Police Department’s problems with excessive force, on display during protests last weekend, go back decades.

On our Commentary Page this morning, PSEA boss Rich Askey says the state will need congressional assistance to reopen its schools and public universities the right way.

Mayor Jim Kenney delivers his 2021 budget address on Thursday in City Hall ( Tribune Photo by Abdul R. Sulayman)

With the state’s Stay at Home order ending, Philly Mayor Jim Kenney has cast doubt on the city entering the yellow phase, the Inquirer reports.
Allegheny County’s cash bail system is in the spotlight with the arrest of Pittsburgh protesters, the Post-Gazette reports.
PennLive uses dental offices as a case study in how hard it can be to get back to work.
Officials in Lehigh County are still counting 26,000 ballots, the Morning Call reports.

Here’s your #Pennsylvania Instagram of the Day:

In Philadelphia, protesters called on city cops to condemn white men who have been ‘protecting’ the Fishtown neighborhood with baseball bats, WHHY-FM reports.
The PA Post tells the story of a peaceful protest in Reading. explains why COVID-19 could mark the end for struggling regional colleges.
NY Mag’s Intelligencer talks to Black clergy who were angered by President Donald Trump’s Bible photo opp.

What Goes On.
Some committee action for the day.
11 a.m., G50 Irvis: House Aging and Older Adult Service Committee
1 p.m., G50 Irvis: House Transportation Committee
Time TBD: Daily COVID-19 briefing

You Say It’s Your Birthday Dept.
Best wishes go out this morning to longtime Friend O’the BlogRobin Tilley Hull, of scenic Gladwyne, Pa., who celebrates today. Congratulations and enjoy the day.

Heavy Rotation.
When you’re in a Public Enemy frame of mind. Just ‘Fight the Power.’

Thursday’s Gratuitous Baseball Link.
 explores why MLB is having a harder time than the NHL and the NBA in getting a plan to resume play.

And now you’re up to date.

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John L. Micek

A three-decade veteran of the news business, John L. Micek is the Pennsylvania Capital-Star's former Editor-in-Chief.