City budget battling continues; report is delayed

Once again, the Post-Gazette buries the lede in its report on the city's oversight committee. The key sentence in this story is the last one: "[Councilman Doug] Shields said the public needs to be updated on ongoing budget planning by Murphy and the two budget teams, and communication among all of them needs to be increased." D'oh!

Among other things, whatever happened to the public bickering about the ridiculous parking tax?

On that point, an economist colleague of mine at Pitt suggested to me that the parking tax hike actually was economically rational. Given the disparity between (high) residential and (low) commercial real estate tax rates in the city, and the city's inability to raise commercial rates directly, then raising a tax that is (in effect) borne by commercial property owners is the next-best thing. Those property owners can't pass the rate increase onto their tenants without losing tenants to suburban landlords.

That makes some sense to me, except that city landlords can pass rate increases onto their tenants if the tenants can pass them along to their employees--again, so long as there is little risk that downtown employees (now faced with parking rate increases) won't leave their jobs and work in the suburbs. The question, then, may not be the relative mobility of Pittsburgh firms, but the relative mobility of Pittsburgh workers. Here's my guess: Outside the educational/university setting, those folks are pretty mobile. So the city's strategy may be wrong, even in pure economic terms. Comments?

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Pittsblog 2.0 is written by Mike Madison, a law professor at the University of Pittsburgh. Send email to michael.j.madison[at]gmail.com. Mike also blogs at Madisonian.net, on law and technology. Chris Briem of Null Space drops by from time to time.

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