[7:55] Welcome to the Pittsburgh City Council, cablecast post agenda on options for increasing revenue in the city of Pittsburgh. Today is November 6th, 2025. I am Council Member Barbara. I represent district five and online we have Councilwoman Erica Straussberger and I think other members may be joining at some point as well.

[8:23] So thank you, everybody, for being here.

[8:27] So just a quick intro, the purpose of this post agenda.

[8:34] So as there has been lots of talk over the past year about issues

[8:43] around budget and revenue and some tight years ahead

[8:47] for the city of Pittsburgh.

[8:49] And so I thought that it would be worthwhile to talk about ways that we might increase our revenue because it's of course with revenue that we are able to pay for our beautiful parks and our pools and our police and fire and EMS and you know trash pick up and senior centers and rex centers and all all the great stuff that that that we have here in the city of Pittsburgh.

[9:15] much of which is running great, doing really, really well, other parts of which, like maybe

[9:22] snow and litter pickup, we're, you know, areas where we could definitely do better, but

[9:28] all of that takes, takes money, right, running government is expensive, oh, quote, controller

[9:35] high-slower on that.

[9:37] So, at any rate, so today we have our council budget director, our director of finance,

[9:44] We also have the Keystone Research Council as well as the Institute on Taxation and Economic Policy and our Controllers Office as well to sort of

[10:00] Dive through a few options that we have at the city and just to talk a little bit about what revenue

[10:08] we get and all of that good stuff. So with that, I will kick it off. Why don't we just run

[10:15] down the table and everyone introduce themselves and then we'll start with Pete McDevitt, our Council

[10:23] budget director and director Gula from Finance.

[10:27] Thanks.

[10:28] I'm Pete McDevitt City Council, Vice Director.

[10:31] I'm Jane Gula, Department of Finance Director and City Treacher.

[10:35] Richie Fader, I'm a lawyer for the Keystone Research Center.

[10:39] Hi, I'm Diana Pulse and I'm a senior policy analyst at the Keystone Research Center.

[10:44] Rachel Heisler, Controller for the City of Pittsburgh.

[10:48] Mark DeDak, Research Director in the City Controller's office.

[10:50] So

[11:00] I have a question here, Dr.

[11:02] But, um, come a week ago,

[11:03] the local tax policy director

[11:05] Institute on taxation and economic policy.

[11:09] Great, thank you.

[11:11] Okay, without we can kick it off.

[11:13] All right, all right, I'm going to pull up my slide deck.

[11:28] There's always a lag once you join the Zoom group.

[11:31] Okay, so I'm going to talk to you about

[11:33] the budget and sort of how that ties into revenues.

[11:38] Um, so, um,

[11:40] what is our budget?

[11:41] This is how I start the budget over you every year, you'll get hopefully an abbreviated version of this next week.

[11:47] But the budget isn't just a financial plan, it's not a bunch of numbers.

[11:51] It is the chief policy document of the city.

[11:54] This is where we outline what we plan to do and how we plan to do it.

[11:58] And I like to look at it as the budget tells the story of the city of Pittsburgh and what we're going to do.

[12:04] So it tells us who's going to do the work, who's going to receive those services, what

[12:09] those services will be, where we're going to provide them, how people will get there, what

[12:14] road, bridges, paths, and bike trails will get, and also if you dive into it deeply, you

[12:19] can see how we're going to do it.

[12:22] So when people think of core services from the city, I think most people think of like three

[12:28] specific areas. They'll think of public safety and then public works and do me and parks and recreation.

[12:34] Those are kind of like the big things that people think of when like this is what city gives you.

[12:38] So they give you if you if you need to pick up the phone and dial them on one and get a police officer or firefighter in the MS truck.

[12:45] Those kind of things they pick up your garbage. They clear your streets.

[12:49] They pave your streets. They take care of the bridges.

[12:52] We're on record senior centers, they're swimming pools,

[12:55] partners playgrounds, all your policy fields and sport courts.

[12:58] That's all city government core services.

[13:03] That's the who what and where.

[13:05] But if you look at the how, there's a lot of stuff

[13:08] that goes on behind the scenes that you can see in the budget.

[13:11] I like to think of it as the stage crew of city government.

[13:16] So those are the departments like OMB and finance and planning.

[13:19] IMP is another one.

[13:20] The city clerks office does so much that nobody ever gets to see.

[13:25] They do an excellent job of hurting cats every single week to make sure that we have

[13:29] agendas that make sense and everything is legislatively going through correctly, but also

[13:34] things like we have to pay our utilities to keep those swimming pools and rex centers running.

[13:39] You need a ton of employees to run a city and you need to pay them good benefits.

[13:44] you need to provide them with tools and equipment and the vehicles that they drive around the city to do that work in.

[13:51] And we also need computers and networking and software and programs.

[13:55] We need a new ERSP system desperately and that is not something that is cheap, but is extremely necessary to run a city.

[14:02] And we also pay for a lot of death service because we don't have enough revenue up front to pay for everything that we need to specifically in the capital budget year after year.

[14:10] So like that's something that we have to account for in the budget that just makes the city go.

[14:17] So here's the slide.

[14:19] We showed a version of this a couple of years ago, but the value of city services that residents receive.

[14:26] This is what they pay.

[14:27] This is what they receive.

[14:29] So in 2025, the city has an operating budget of $669 million.

[14:36] And according to the, I think, 2023 census, there's 140,000 households in the city of Pittsburgh.

[14:43] So, per household per month, people receive $396 worth of services every month to drive on our roads and use our bridges and bike lanes and to have trash pick up and snow plows and EMS and firefighters and police.

[15:00] That's what they get every month.

[15:05] And some other general fund payments. So these don't show up in the operating budget. These are

[15:09] just transfers out of the general fund. So all of those revenues that we bring in, this

[15:14] also goes to the annual transfers out to the stop-of-the-violence trust fund, the housing

[15:19] opportunity fund, and the URA housing debt service. So right off the top of the budget, that's

[15:25] $22.5 million. And then the pay-go transfer, which is operating dollars that are left

[15:29] over after everything else that you have available to transfer to the capital budget.

[15:38] So this is about revenues and how does this, like, our spending depends on what we have available to spend.

[15:47] So I'm sure Jen is going to go into this in much more detail and a lot better detail than I could do.

[15:52] But it's basically for our general fund spending it's tax revenue and non-tax revenue and then sometimes we could grant but like a lot of those times

[16:00] It's one off so you can account for those every single year you want to make sure you have predictable regular revenues

[16:07] So that you can make a predictable regular budget

[16:12] So I want to go over we talked about some great things that the city does do and some some really core services that are top of the line that we do is we have an

[16:22] in Fire Bureau. They are super expensive, but they are very good at what they do. We also,

[16:28] this is a newer thing, the Freedom House Academy for EMS, the Chief Co-Crest is doing

[16:33] really, really good things to make sure that we are hiring as many EMTs as possible so that we're

[16:39] helping keep our city safe. We do a great job wearing our pools. I put an asterisk there because

[16:45] sometimes it has been difficult in the past to make sure that we hire enough life guards and that

[16:49] as put a strain on our budget, but it is such a great resource that the cities able to provide.

[16:55] And also spray parts.

[16:56] We've converted a lot of closed pools to spray parts, and they're achieving a run.

[17:00] It costs a lot of money with water.

[17:02] But it's an excellent resource for kids and it's safer because you don't need to swim for a spray park.

[17:09] So like those are really great things that we do every year with our budget.

[17:14] We also have a lot of shortfalls.

[17:15] I mentioned the pay-go transfer out, that goes towards things like the fleet and demolition of condemned buildings and traffic calming projects, and it's really not enough every year.

[17:26] The amount of debt that we have in our capital budget versus pay-go is not a healthy ratio.

[17:34] We also give money for the URA support for housing and land bank has gotten some money for us.

[17:42] It's not enough though.

[17:43] They're going to ask us for more money whenever we have those budget hearings.

[17:48] Also, we're seeing struggles keeping up with the amount of premium pay.

[17:53] I talked about how we have a great fire department.

[17:55] But again, it is very expensive.

[17:57] And there's going to be over budget on premium pay by eight or nine million dollars this year.

[18:02] Utilities, the cost of electric and water and things like that is just going to go up and up and up.

[18:07] And it's something that we're not going to be able to write as many services if we don't have additional revenues to expand because we just need to be able to pay the bills that we have.

[18:18] And also facilities maintenance, I sat at this table about 10 years ago at this point to talk about the facilities optimization plan that we weren't investing enough in our facilities.

[18:28] And we've done a better job since then, but we still have a ways to go.

[18:33] Anybody that has spent any time in this building can tell you that our facilities need

[18:38] a lot of work.

[18:40] So that's just another example of a shortfall.

[18:43] So then lastly, I wanted to go through, I think this is the last.

[18:47] But quickly, we're on to our budget process in September, and when we meet in August,

[18:52] but in Vice-September, the revenues are certified by the controllers office.

[18:55] We meet with all branches of government and go over them and sit down and ask questions and then the

[19:02] the controller certifies those revenues and upon that the mayor can build his budget and give us his spending plan.

[19:09] And he gives the first draft in the 30th and next Monday he'll release his official budget to City Council

[19:14] and then it's the everybody's funnest time of the year where we get to come in here like three or four days

[19:20] So we can talk about the budget and City Council will have an opportunity to make changes to

[19:26] that.

[19:26] You can make cuts.

[19:27] You can add stuff assuming you add revenue and there are ways to do that.

[19:32] The agenda will tell you about.

[19:33] But then by the end of the year, we will have the officials budget for the City of Pittsburgh.

[19:39] That's all I have.

[19:45] Oh, and just briefly, we are joined by Councilwoman Kale Smith as what did anyone else join?

[19:50] and also Councilman Bobby Wilson, Councilman Bob Scharlin, Councilman Daniel Level,

[19:58] Council President Daniel Level.

[20:00] So that's everyone here. Okay, last one. Yes, she was here at the start. Yeah, thank you. All right.

[20:20] We're here. Technical difficulty solved.

[20:24] So as my counterpart over here mentioned, the taxes pay a play of really huge role in our budget overall, about 60% or more of our budget is actually funded through tax revenue.

[20:41] the largest, there's basically two buckets, one bucket being real estate tax and the other

[20:48] one known is mostly comprised of what they call app 511 taxes, which are ones that are

[20:54] enabled, we're enabled to charge via state law and it's app 511. So just to give you a brief

[21:03] review of what real estate tax is, the city's current military is 0.06 mills, which is like

[21:10] $1,000 of a dollar. So basically, for every $100,000 worth of assessment, you can expect

[21:18] to pay about $800 and $6 in city tax revenue, only. Obviously, the school is at 10 and a quarter,

[21:29] Library is a quarter of a mail, parks is 50 or half a mail and the county is at 6.43.

[21:36] And the way we actually do this is a county sets an assessment.

[21:40] And it's a value based on what they think your property is worth.

[21:45] And that assessment is what we actually use to apply your millage to.

[21:50] In order to tell you how much tax that you're actually going to pay to us.

[22:01] The largest of the at 501 taxes is actually earned income tax, and that is actually superseded

[22:09] our collections over real estate.

[22:13] So in the past years, the real estate revenue was the real estate tax revenue was the largest revenue generator for the city of Pittsburgh.

[22:22] And due to something called the common-level ratio, which keeps reducing based on the fact that we are many, many years away from the last county reassess.

[22:31] that actual tax base is shrinking.

[22:35] So now earned income actually supersedes the amount of collections.

[22:40] It's the highest earner of tax revenue for the city's budget.

[22:45] So earned income actually includes some things like salaries, tips,

[22:50] wages and bonuses, severance pay, taxable fringe benefits,

[22:54] over time, vacation, things that are not considered earned income,

[22:58] more things like investment income, retirement benefits,

[23:02] any other government benefits, rental income, or alimony.

[23:06] So basically things that you would get from not actually

[23:09] performing a job of wage earnings.

[23:14] So currently, the City of Pittsburgh earned income tax rate

[23:17] is about 1% and the school district is 2%.

[23:21] So which means that any individual that earns about $72,000,

[23:27] which is the median income for the Pittsburgh metro area,

[23:31] they can expect to pay about $2,100 or $2,200

[23:36] in city earned income tax.

[23:44] So I just ran a little comparison because I think some people

[23:49] think that living in the city could potentially be

[23:52] more expensive tax-wise than in surrounding burrows

[23:57] or municipalities.

[23:59] as you can see and that this is added altogether. So what you would pay for city tax against what you would actually pay. Well,

[24:08] it's city tax and school anything that we would actually tax you on is in this calculation.

[24:16] As you can see it's definitely not the highest and if you sort of take a look at the EIT rates,

[24:24] They are set and they are pretty much stable for all of the municipalities basically because the P.A. State

[24:34] Local Tax Enabling Act has caps on most of those taxes.

[24:40] So we don't have the power or the authority to change anything with them if they've exceeded the cap.

[24:49] so we can only change the collection rates to the cap,

[24:53] and that's it.

[24:53] The only thing that we have true control over

[24:56] is our city-militrate.

[24:59] Um, a dick.

[25:00] Additionally, do I put in there? A lot of these other surrounding municipalities also pay for trash pickup, and that's notable because we do not. We do not have a separate charge for trash pickup. So just one of the services that you get, I wouldn't say, for free, but it's all included in the taxes that you pay to the city. It's not separate.

[25:27] And just going back to Act 511, so the taxing power for these taxes was given to us by the state of Pennsylvania.

[25:37] And as I said before, the taxing rates and limits are set by the state.

[25:41] And these taxes include specifically earned income, payroll prep or payroll expense tax, amusement tax, local service tax, the parking tax,

[25:51] and the ever-popular sports residents for its utility usage.

[25:58] These are any changes to these as I stayed

[26:00] before are absolutely limited at the municipal level.

[26:09] So just taking a look at, as I stayed in our biggest option

[26:15] for revenue generation is an increase to the milledrate.

[26:19] So, assuming a 1% increase from the current 8.06 mills, it would raise the miller rate to about 8.14 mills for city tax only.

[26:35] That would mean that you would pay $814 per 100,000 of assessment, which would be an increase of $8 per household.

[26:46] So, but overall the total revenue generation then would equal about 1.7 million additional

[26:55] dollars. So, we did the same for three, five, and ten years and the largest attempt,

[27:05] I mean percent, I'm sorry. So, 10 percent would actually increase the military up to 8.87,

[27:11] which would be an increase to $187 per $100,000 which would mean an increase of $81

[27:20] per household per $100,000 worth of assessment.

[27:26] So just to give you an idea of what that looks like and just to clarify

[27:31] $100,000 worth of assessment does not equal $100,000 worth of tax.

[27:38] it is not a one-to-one comparison.

[27:41] So,

[27:47] thank you.

[27:58] Oops, sorry for the members who joined.

[28:00] So, the way we're sort of formatting this post agenda is,

[28:05] we started out with P2Gavis are kind of what the bug,

[28:08] you know, what we pay for the things that we do.

[28:10] Director Gula is presenting, you know,

[28:13] the impacts of village increase, you know,

[28:15] how much we pay, how much Pittsburghers pay in taxes

[28:18] and the impacts of the village increase.

[28:20] And now we're hearing from Keystone Research Center about what an unearned income tax

[28:29] could look at.

[28:30] And then to finish, we'll have the Controllers Office and the Institute on Taxation and

[28:37] Economic Policy talk about pilot programs payment in lieu of taxes from our large non-profit.

[28:43] So that's just to clarify for the council members who are here.

[28:46] And I think we're still, yeah, I don't think anyone else will join.

[28:51] Okay, thanks.

[28:52] Go ahead.

[28:53] Thank you.

[28:54] So thanks so much for the opportunity to share information with you

[28:59] on the Pittsburgh Fair Share Tax.

[29:00] Again, my name's Diana Polson.

[29:03] I'm a senior policy analyst at the Keystone Research Center.

[29:07] We're a Pennsylvania based nonprofit research

[29:09] and policy organization focused on building shared prosperity in the state.

[29:15] In the first part of my PowerPoint, I'm going to describe what a fair share tax is, how it

[29:20] can raise revenue for the city and who would be most impacted, then I'll turn it over

[29:25] to Richie Fedor, municipal lawyer who has written and advised us on legal matters related

[29:30] to the Pittsburgh Fair Share Tax.

[29:41] So Pittsburgh's current tax system is unfair, meaning that working people, both low and middle

[29:47] come people pay a greater share of their incomes in Pittsburgh taxes than the wealthy do.

[29:53] In general, sales tax and property taxes are considered regressive, meaning that lower

[29:59] people's income.

[30:00] The lower people's income is the higher assure of their income they pay in taxes.

[30:06] Some other states and cities offset the regressive character of these taxes with graduated income

[30:13] taxes, but the Pennsylvania Supreme Court has ruled that our constitution prohibits

[30:17] graduated income taxes. The cities income tax currently only taxes wages and salaries

[30:24] plus net profits from the operation of a business. But the city and school district do not

[30:29] tax other kinds of income that mostly go to wealthy people, such as dividends, capital gains and

[30:34] interest, and I'll get into what's included in these categories, rather along in my presentation.

[30:42] This figure divides up what share of income each income group in Pittsburgh from the richest

[30:48] 1% to the poorest fifth currently pays on local income taxes, on the left you can see the average

[30:55] income of the bottom fifth of income earners and pitsburg is only about $15,000 per year.

[31:02] The middle fifth has an average wage of $67,000 per year and the bar all the way to the

[31:07] rate is the top 1% richest pitsburgers with an average of 2.1 million per year. You can also see

[31:15] that the richest 1% pays the lowest share of its income in city income taxes.

[31:23] So now I'm going to

[31:23] There are some more information about a Pittsburgh fair share tax.

[31:34] While Pittsburgh has a revenue problem, we don't believe that a broad-based tax increase

[31:40] is the best answer since lower-end middle income tax fares already pay an outsize share

[31:45] of their income on local taxes.

[31:48] As I mentioned earlier, most of Pittsburgh's income tax comes from wages, salaries,

[31:59] and

[31:59] The fair share tax solves this problem.

[32:01] It would raise a significant amount of additional revenue

[32:05] and make Pittsburgh's tax system more fair

[32:06] by taxing income from wealth.

[32:09] So let me get into the details.

[32:13] The state of Pennsylvania currently taxes eight

[32:15] crosses of income all of which are taxed

[32:17] at the same rate of 3.07% by the current Pennsylvania

[32:20] state income tax.

[32:22] I'm going to briefly go through these categories

[32:24] so we're all in the same page.

[32:26] The first two categories on the left are actively

[32:28] earned income, meaning it's money earned and exchange for active work, including compensation,

[32:35] which is payment received for services rendered, including wages, salaries, and it also includes

[32:40] the net income from the operational of business profession or farm.

[32:44] The next five categories in the middle column are forms of what is sometimes called unearnd

[32:51] income or passive income, and this is income that maybe requires investment of time or money,

[32:57] but has the potential to generate money over time with minimal effort.

[33:01] So this includes interest, which is generated by savings, money market accounts, bonds,

[33:06] and those kind of things, dividends, which are periodic payments by a company to its shareholders

[33:11] as a reward for their investment, neck gains or income from the sale exchange or other

[33:17] disposition of any kind of property.

[33:20] And you'll see this on feature slides referred to as capital gains.

[33:24] This includes real estate, tangible, personal property,

[33:27] intangible, personal property, investments,

[33:29] like stocks, and bonds.

[33:33] That gains from rents, royalties, patents, and copyrights,

[33:37] and income from estates or trusts.

[33:42] So Pittsburgh only taxes two of these classes of income,

[33:45] compensation, and net profits from the operation of business.

[33:50] The categories in red, however, are not currently tax

[33:54] in Pittsburgh, and these are the categories.

[33:57] You could include in a fair share tax.

[33:59] But before you present estimates of the increases

[34:01] in revenues from Pittsburgh share tax and data

[34:04] on who pays those increases, I just want to mention two things.

[34:10] First, I just want to note that a fair share tax

[34:12] would not tax retirement income, social security,

[34:15] unemployment benefits, federal active duty

[34:17] pay for military service.

[34:19] And secondly, for those who want to know more

[34:21] about the methodology behind these estimates,

[34:23] that's we're lucky to have Kamalika Daz, who's going to testify later from the Institute

[34:30] on Taxation and Economic Policy, who generated these estimates for us.

[34:36] In brief, the I-TEP model uses state level IRS tax data matched to Pittsburgh using American

[34:42] community survey data.

[34:44] I-TEP's modeling has a really great reputation.

[34:47] In the case of Pittsburgh, the Pittsburgh fair share tax, we have the added reassurance

[34:52] that comes from the fact that last time, I tap ran numbers in 2023, the pencil.

[35:00] We need a department of revenue corroborated those item estimates, both modellers came essentially to the same conclusion about revenues and who pays the increase.

[35:11] If the council wants a new round of item estimates validated, the Pennsylvania Department of Revenue told us last week that they're happy to do them.

[35:22] So there's many different ways if it's structure of fair share tax and Pittsburgh, which would tax income from wealth.

[35:27] I'm going to be mainly talking about option one, but I just wanted to share some options

[35:33] about how you could potentially structure it.

[35:36] Option one, you could tax income that goes mostly to the wealthiest Pittsburghs at the

[35:43] same current rate as the current Pittsburgh income tax, which is 1 percent that would generate

[35:47] between 20 and 27 million depending on what categories of income are taxed.

[35:53] 2 would be taxing income from wealth at 2% and keeping the tax on income from wages at 1%

[36:00] this would bring in an additional 63 to 78 million more annually and option 3 you could decide

[36:07] down the road that you like to tax income from wealth at 2% but decrease income from wages and

[36:12] salaries to give lower and middle income earners a break. We've modeled this decrease in earned income

[36:17] tax to drop from 1% to 0.95%, it's a small amount, but enough where most Pittsburghers would

[36:26] see a decrease in their city income tax. This would bring in 55 to 69 million.

[36:35] So I'm going

[36:35] to spend the rest of my time diving into option one, tax income from wealth at the same rate

[36:41] as the current income tax. So on the slide with the three options, you could see that the

[36:48] potential revenues spans a range, the range is there because we modeled two options, depending

[36:53] on what you want to include in a fair share tax, and these aren't the only options.

[36:58] You could also decide to include or exclude some of the categories.

[37:03] But by just taxing interest dividends in capital gains at 1% of fair share tax would raise

[37:08] an additional $20 million annually, if you tax interest dividends capital gains, and incomes

[37:14] from rents, royalties, patents, copyrights, the states, and trust that 1% Pittsburgh could

[37:19] raise an additional 27 million annually.

[37:24] So I'm going to show some of the data and figures for the latter example.

[37:28] Here's a breakdown of where the 27 million would come from.

[37:32] This is how it breaks down by category.

[37:35] Capital gains would bring in 13.2 million rents, royalties, patents, copyrights,

[37:40] and trust labeled here as specialized income would raise an additional 7 million dividends would raise 5.2 million at interest 1.6 million.

[37:53] So who would pay for the tax increase? The pieces of the pie that are shades of blue are the top 20% of income earners in Pittsburgh.

[38:02] All together they would pay over 90% of the additional revenue raised by this version of the Fair Tax.

[38:08] The top 1% of income earners earning an average of 2.1 million a year would pay 51% of the total tax increase.

[38:18] The next 4% with an average wage was about $500,000 a year would pay 25% of the tax.

[38:25] And the bottom 80% of income earners, the small slice in yellow, those earning less than $113,000 a year would only pay for 8% of the tax increase.

[38:36] Some examples of this just to kind of make this more tangible, you know, wealthy Pittsburgher receives

[38:43] $100,000 in dividends this year, a 1% tax on that would be $1,000.

[38:49] A Pittsburgh resident owned some investment property purchased a property 10 years ago and

[38:54] is selling it.

[38:55] The property sells for $200,000, but once she subtracts what she owes and closing cost and fees

[39:01] her net gain is $50,000.

[39:03] a 1% local fair share tax would cost her a $500.

[39:08] Another example, a woman holds $25,000 in a savings account that pays 3% in annual interest,

[39:14] so she earned $750 in interest income, she would owe the cities $7.50 in a fair share tax.

[39:24] So this figure breaks down what percent of Pittsburghers in each income bracket that would see a tax increase.

[39:30] If you look at the bottom of the chart, only 11% of Pittsburghers at the bottom, 20% of income earners would see an increase, 35% of the middle income category would earn an average of 67,000 year would see an increase.

[39:48] But most people at the top income brackets would see an increase.

[39:51] But it's important to see how much of an increase these different categories of earners would see.

[39:58] This figure shows the app.

[40:00] Average tax increases by income distribution. So the dark blue shows the dark blue bars show the average tax change for the whole category of earners and the later blue bars shows the average tax change for those with a tax increase.

[40:16] As you can see, the average increase for the bottom 20% of income earners is $2 for the 11% that actually would see and increase their increase is an average of $16 in taxes.

[40:28] Increases very low for most Pittsburghers, and you start to see those bars get more substantial only in the top 5% of income earners.

[40:36] The real substantial increase occurs at the top of income distribution. The top 1% would see their taxes increase by about $5700 annually.

[40:47] And remember, these are individuals who have an average income of over $2 million.

[40:53] And with that, I'm going to pass it to Richie.

[40:59] Thanks, Diana.

[41:01] Just so you appreciate Diana asked me to talk about, since this is a new and novel way to raise money.

[41:10] She asked me to talk about the legal background to reassure you that this is to enact a tax like this would be well within city councils legal authority.

[41:19] and it will primarily derive from the same act of 511 that the Finance Director has talked about.

[41:25] Just 30 seconds of background on who I am.

[41:28] I'm a private municipal lawyer in Philadelphia.

[41:31] I also teach at Penn and Temple Law Schools.

[41:33] I teach local government law.

[41:35] But I spent most of my career working for the city of Philadelphia.

[41:39] And for 20 years I was the head of the city law department's legislation unit.

[41:42] And what I did for a living is exactly what I'm about to do here,

[41:46] which is analyzed legislative proposals on determined whether or not what is the legal authority

[41:51] and whether or not it is legal. And this one I feel very comfortable for as well within city councils

[41:56] authority. As the finest director mentioned, most of your taxing authority comes from at 511,

[42:03] the local tax enabling act. And the local tax enabling act initially says that Pittsburgh

[42:08] contacts anything it wishes. And then it lists the series of exceptions. And unless you can find

[42:14] exception, and there's a lot of exceptions, but unless you can find an exception, the baseline rule

[42:20] is Pittsburgh attacks anything it wishes. So I've looked through all those exceptions, and there

[42:25] is only one exception that even remotely relevant, most of the exceptions deal with all kind of

[42:31] specialty taxes, amusement taxes, business privilege taxes, they're just not relevant to an

[42:37] unarmed income tax. The only potentially relevant exception is the one that says Pittsburgh

[42:42] can not tax anything if the Commonwealth already taxes it.

[42:47] You can't generally have double taxation.

[42:53] And as you know, the Commonwealth does impose a personal income tax, and that personal income tax does cover all of the classes have income that Diana has talked about today.

[43:03] Interest dividends, capital gains income from royalties, patents, etc.

[43:06] So, at first question, it would seem that Pittsburgh doesn't have the authority to duplicate

[43:11] Pennsylvania's tax, but there's a critically important exception to this exception.

[43:19] And that is, that's the personal income tax statute itself says, and I'll just quote it,

[43:24] nothing, notwithstanding anything contained in any load of the contrary.

[43:28] The validity of any ordinance adopted by any political subdivision relating to the

[43:36] by anything contained in the personal income tax.

[43:41] So in other words, although Pittsburgh cannot duplicate any Pennsylvania tax, there's an

[43:47] important exception.

[43:48] You can duplicate anything that's in the personal income tax.

[43:52] You can't duplicate numerous other Pennsylvania tax.

[43:55] You can't duplicate inheritance taxes, fuel taxes, the corporate net income tax.

[44:01] Those all are outside of the personal income tax.

[44:05] But if it's in the personal income tax statute, there is nothing to put, it is not included in this prohibition on double taxation.

[44:14] So just reading that exception, applying it to this particular situation, notwithstanding the X5111 van on double taxation,

[44:23] the validity of the proposed fairshat share tax would not be affected or impaired by the Commonwealth tax on interest dividends, capital gains, etc.

[44:32] contained in the Pennsylvania personal income tax, the ban on double taxation simply does not apply here.

[44:41] Now, whenever that concludes the statutory analysis, the baseline rule has to protect anything.

[44:47] It wishes, unless there's an exception, and there is no relevant exception.

[44:52] critically, there also is nothing in the F5-1111 that addresses the maximum

[44:58] amount that you can take.

[45:00] Tax on an income, because it doesn't specifically discuss that on an income tax at all. And so there's no cap on on an income tax. You could, as the, as the, as the appropriate number, whenever you look at Pennsylvania taxes, you always have to at least look to see if it, if it raises a concern under the Pennsylvania uniformity clause under the Pennsylvania constitution for uniformity clause. And it, it does not raise a constitution.

[45:29] certain, the uniformity clause says that similar subjects must be taxed similarly and dissimilar

[45:36] subjects may be taxed similarly differently, earned income and earned income are very different

[45:43] categories and that's why, currently, you are allowed to tax earned income at 1% and not tax

[45:50] earned income at all. They have different categories, they can be taxed differently. But similarly,

[45:56] It is nothing to prohibit you from taxing the two of them at the same rate and moreover,

[46:01] there's nothing to prohibit you under the uniformity clause from treating them differently

[46:05] taxing, on-earned income, at a higher rate than earned income.

[46:10] And similarly, all of the subcategories of on-earned income, interest dividends, capital gains,

[46:16] net income from rents, royalties, each of those is clearly considered a separate class of

[46:24] income under Pennsylvania law.

[46:26] And we know that from the PA40 that we all fill out, hopefully, each line represents a different

[46:32] class of income.

[46:34] And therefore, the uniformity clause would give you complete freedom, constitutionally,

[46:39] to pick and choose from the manual of honor and income that Diana has talked about.

[46:44] If you want it to only tax dividends and capital gains and net income for royalty, you

[46:49] would be free to pick and choose and there's nothing in the uniformity clause that would

[46:52] preclude that.

[46:53] So given that there's no statutory exception, that's on point, and there's no uniformity close problem.

[46:59] There's no legal impediment to the Pittsburgh City Council adopting a fair share tax.

[47:06] That concludes my presentation.

[47:13] Great.

[47:14] Thank you very much.

[47:15] I also want to say Councilwoman Gross has joined us, and so now, so we have talked about millaging

[47:23] increase.

[47:24] We have talked about a fair share tax, and now we are going to move to the Institute

[47:29] on taxation and economic policy as well as the controllers office to talk a bit about

[47:35] pilot programs, payment and lieu of taxes where we are, you know, we're our large non-profits

[47:40] would be helping to contribute to our revenue.

[47:44] So with that, Kamalika, are you?

[47:48] Yes, I'm here.

[47:49] Okay.

[47:50] I don't have slides.

[47:51] Those all just talk to folks.

[47:53] Okay.

[47:53] That's fine.

[47:54] Okay, so everybody, thank you for this opportunity to seek and for what we could ask.

[47:59] I live in Philadelphia and the Liberal Tax Policy Director at the Institute of Taxation

[48:06] Economic Policy, or ITO, to non-profit, non-partisan tax policy organization,

[48:13] conduct rigorous analyses of tax and economic proposals.

[48:18] So before I go into everything else, I realize that we all understand how pressing the local

[48:23] revenue challenges are nationwide, especially just given the massive federal cuts to

[48:28] help care through distance and other supports, but I just want to mention one

[48:33] other last reported on issue that will certainly affect local budgets going forward

[48:39] that I took with me have been really honed in on and let's speak conformity.

[48:46] You know that unfortunately a lot of the costly regressive policies of OBE,

[48:51] A, O, B, B, B, A could flow through to states, for the local governments too, and that since

[48:58] the states will just have a lot less money available for revenue sharing, so it's a bit

[49:03] of a double way.

[49:04] I mean, the states and localities can pick up the slack of slashed federal support and plus

[49:09] the impacts of subsidies either automatically or deliberately adopting the same provisions.

[49:15] So, the ones to keep an eye out for impulse will be in the end to really encourage sea

[49:21] policy makers to put that on to not limit or decouple from the permanent exception

[49:28] of opportunity zones, the restoration and expansion of the provision, notice the 100% bonus

[49:36] depreciation and the drastic exception of 529 accounts that have been pretty much hijacked

[49:42] by a lot of private school boosters.

[49:45] We have more details on all of that on our website,

[49:47] but I just wanted to mention that as another example,

[49:50] I look how do you say to focus on revenue

[49:52] and just the dominant effects of these federal decisions.

[49:58] So all of that said, one of those.

[50:00] Really comment some decisions, so cities can take to call back to the revenue, the city's state, you know, as in that's not profits to contribute more to city revenues.

[50:11] And pay the record, you know, our own research shows that Pennsylvania has the fourth most regressive state local tax system in the nation.

[50:19] So the last of these large nonprofit institutions pay the more taxes fall to lowest paid households.

[50:26] So, the research is clear that many of these organizations need to contribute more.

[50:32] There is a 2021 on public study that found the nonprofit hospitals, actually some

[50:37] blasts on charity care, then for profit hospitals and the amount of sending uncovering

[50:43] that a key shortfall is actually pretty similar for profit and nonprofit hospitals.

[50:49] There is also a 2024 study.

[50:51] the moment to, from about 80% of hospitals and last Ontario care and community investment,

[51:00] then the estimated value of their tax rates.

[51:04] So, the bulk of what I'm talking about, what are other cities doing about this.

[51:08] This one is mostly, so this will start there.

[51:11] So, it's like field, not so too safe.

[51:15] The pretty recently took a pretty huge step forward.

[51:18] They had an internal audit that found that the city recorded pretty modest pilot receipts,

[51:24] while the exact property volumes pretty much ran into civilians, and so their local council

[51:29] subcommittee recommended developing a formal pilot program, just to push all these colleges, hospitals,

[51:36] and charities to contribute more to the tax base. The subcommittee recommended standardized

[51:42] and legislation that would lots of the use require up to 25% of the amount that you assessed

[51:51] in taxes if they were regular businesses.

[51:55] So this agreement still in the works that it seems like something for Pittsburgh to

[51:59] floor as a lot all, you know, I think the thing that feels probably most important for Pittsburgh

[52:11] I'm really just kind of pushing for that seat in New England legislation.

[52:16] Boston is often cited as precedent here.

[52:20] It's very, it's a public formulaic, high-level cost.

[52:24] It's 25 percent, again, a hypothetical tax liability with credits for verified community benefits

[52:31] and public disclosure for cost and receipts.

[52:36] That's six cents the is a solid for self, so Boston in a annually post, the requested

[52:42] pilot amounts in the share of the institution's actually the E. This program, because

[52:49] it's voluntary institutions, routinely pay a lot below the city's asked and participation

[52:55] varies quite a bit by structure. This is an example in fiscal year 2023, the city requested,

[53:03] It gives like over a hundred million, or over a hundred, twenty million, hundred

[53:08] of California, and then received maybe about 30 to 40.

[53:13] And so it's a solid model for public accounting and transparency,

[53:17] but not guaranteed compliance, not for accountability, not necessarily.

[53:23] The other place where this has been a huge topic of conversation is in Chicago.

[53:27] There's a huge grassroots push going on right there.

[53:30] among various deeper groups and coalitions and even among older men in asking for a university

[53:38] use for piloting payments that are tied to institutional law.

[53:43] And so, this is, you know, very much in the beginning stages.

[53:46] But organizers have produced some concrete estimates showing how much to be raised.

[53:52] If they were held accountable, and in some of those estimates,

[53:55] They're saying it's up to 250 annually, if the largest universities are included, again, that's very much in the beginning stages.

[54:06] Baltimore, that's another big one. Again, this is all happening. There's a lot going on right now.

[54:13] So they present some pretty, they have some, they give a lot of conflict steps recently.

[54:20] Just about a month ago, Baltimore announced a new non-profit assessment deal with 14

[54:26] Ingrid's institutions there for fiscal year 2020-2031.

[54:33] So under that deal, the pilot payments are going to double over that time.

[54:38] So this started up about 620,000 and 20,000 and increased to 12,000 and by 2030.

[54:46] I will say there's been sort of a mixed reaction to these negotiations.

[54:51] No, the plus side, it's a huge stuff forward.

[54:54] They're having some critics that have pointed out that the decision itself didn't have a lot of transparency that wasn't.

[55:00] A public participatory process and the amounts are so pretty small compared to the top straight from just those institutions use of cities or surveys.

[55:11] So I think there was one estimate that even after doubling the payment, they would only be about 10% of the full tax liability, which you can see compared to the Boston model, again, of some fault, hearing the best more like 25.

[55:29] And so what are we going to do about it, strong economy, accountability measures, it's not mandated by statute.

[55:38] I think I wanted to end with Providence Rhode Island. It feels like a really good example of a city that's finally gotten some traction on this.

[55:46] One has heard, I'm sorry, one of the providence who is facing potential bankruptcy,

[55:53] doctorate and great recession. That's why some universities like Brown,

[55:57] they start making voluntary contributions, but it wasn't until 2023 that a lot of the city leaders

[56:05] who's free negotiated that deal because they're just not paying enough. There's continued financial

[56:10] pressure so that agreement more than doubled with the schools have been contributing

[56:15] to nearly like a hundred million over 20 years and then Brown signed a separate agreement with

[56:23] providence to provide an additional almost 50 million involuntary payments on top of what

[56:30] was outlined in the MOU. So in terms of lessons for Pittsburgh, I think one of the big things

[56:37] to take away from providence is just how long-term this is, just having this predictable

[56:42] long-term payments for 20 years. That's a great idea. The agreements are pretty clear. They're

[56:49] public, you can find them online. They are so technically voluntary. They're not

[56:55] right in the statute, but it would be, they would get pretty huge public backlogs of pages

[57:00] locked away from those agreements. So there are still some lessons to be taken away from

[57:07] Yeah, and I think in Toronto, I'm just saying it's an issue that lots of cities are grappling with and giving the expected revenue and stability,

[57:15] hiring costs, picking up a stock for the federal cuts, makes them explore some of these options,

[57:21] and, you know, as you all know, I'm realized, potential and Pittsburgh is just pretty massive.

[57:29] And now feel free to email me at Kamalika.com.org and I have to provide some more details.

[57:36] Thank you.

[57:37] Thank you very much Kamalika.

[57:40] Can you control her?

[57:44] We also don't have a slide deck, but I just wanted to, again, thank Councilperson Warwick

[57:50] for convening this conversation from our perspective.

[57:53] We believe that this should be part of the dialogue as the budget process moves forward.

[57:58] As we flagged in response to the initial 246 budget proposal, our perspective is that some

[58:05] of those city expenditures have been deflated to get to balance on paper and we do not

[58:10] believe that this budget or word of crisis point that does not need to be a crisis, but we

[58:16] don't think that we should not be waiting.

[58:21] And as the conversation with voluntary payments or pilots unfolds, we did wait in 2024.

[58:29] We waited until we were in Act 47 to have a conversation with pilots.

[58:33] And we had a 10-year agreement, and a lot of that was shrouded in secrecy.

[58:38] We did a report in 2022, which was written primarily by my colleague Mark Patak.

[58:43] And as you can see, it was, again, it's a three-year-old report, but only 18.2 million

[58:49] of the 121 million actually came through and a lot of it was unable to be deciphered, we don't

[58:58] know who paid white. The highest amount that came in was 5.8 million and 2026. And the total revenue

[59:07] that year was 437 million, which is about 1.8% of revenue came from that pilot agreement.

[59:15] From our perspective, the Pittsburgh Public Service Fund, which was created in 2004,

[59:20] I didn't help bui city revenue, but it was not a sustainable revenue source.

[59:27] It peaked, like I said in 2006, it was unpredictable, and it was not handled for my perspective.

[59:34] Again, in retrospect, I'm Monday morning quarterbacking, but it was not handled in a way that

[59:39] I think best serve taxpayers, because there was just no predictability with it.

[59:42] So, as the conversation unfolds with voluntary payments from our non-profits, I think that

[59:47] we just need to remember that city taxpayers are paying their textiles every year and

[59:52] we need to make sure that the conversation with the non-large non-profits, you know,

[59:57] remembers that our taxpayers are affected.

[1:00:00] Today that they'll every year, and there needs to be some transparency in the process that, you know, if we're having those conversations that there's some level of transparency that, you know, ex, ex, non-profit is paying, ex-dollar a year. And this is what the money is going towards. Our office is actually releasing a report, I think next week, on the status of the fleet and a recommendation in that, is that the city established a frontline fleet trust fund and that some dedicated revenue from the

[1:00:30] voluntary payment go towards that because we believe that the status of the fleet right now is the public safety issue.

[1:00:38] So, again, I'm happy to have a conversation.

[1:00:42] We don't have a slide deck.

[1:00:43] I'm like I said the reports from 2022 and Mark, I don't know if you've anything to add.

[1:00:47] But my hope is that as the conversation around voluntary payments unfolds that A.

[1:00:52] It is a voluntary payment.

[1:00:54] And we recognize that.

[1:00:56] But at the same time, we do well when they do well and they do well when we do well, and I think that we need to engage in a good faith conversation with all of the nonprofit partners in Western Pennsylvania, and you know, we have nonprofit employers.

[1:01:11] There are a lot of foundations who have made a lot of money off of people who have worked and lived in Western Pennsylvania for 150 years.

[1:01:19] And those folks need also be part of the conversation as well, but I think in 2005, when the public service fund was created, we waited too long to have that conversation, and now is the time that we need to start this conversation with the large nonprofits.

[1:01:36] So with that, Mark, do anything you want to end.

[1:01:39] So I'm happy to have a conversation, but again, thank you for convening this conversation. It needs to happen.

[1:01:43] Yeah, absolutely. Okay. Well, thank you all, everyone, so much for coming and I guess I want to quickly

[1:01:50] are there any members who have a time commitment that they need? Anyone?

[1:01:58] I know.

[1:02:00] There's folks online. So I will start then in that case with Councilwoman Strauss Berger.

[1:02:12] Thank you all.

[1:02:13] And thank you, Councilmember Warwick, for convening this apologies for staying out camera

[1:02:21] for the time being, but I very much was tuning in listening in on all of these presentations.

[1:02:28] And in the spirit of creating a dialogue, which I hope this is, and very much not putting anyone

[1:02:37] on the side, so I'll just open it up more generally.

[1:02:41] The THAN SHAN TACS is something that I've heard of before

[1:02:46] from some of the folks who presented it today.

[1:02:50] And it's not something that's brought up in other symbols

[1:02:54] when we're discussing opportunities for a balanced budget.

[1:03:01] And I would, again, in the series of a dialogue,

[1:03:06] I'm not putting it in on the spot. I'm about to hear other folks' reaction to the extent you feel comfortable and what the upsides and the downsides might be of this in the city.

[1:03:25] Of course, first thought that comes to mind is the legality that that was actually handled in the conversation, but I would like to hear some of the action.

[1:03:39] So, I can weigh in on that a little bit, I think, and I think from finance standpoint, less

[1:03:47] of a legality issue is more of how do we actually collect and institute the tax should

[1:03:57] this be the path that we go on?

[1:03:59] I mean, this is not something that could happen for us overnight.

[1:04:02] So it would take a lot of planning, it may take resources like employees in order to process or even hiring a third party vendor to collect.

[1:04:16] It could also mean like changing tax systems to accommodate bringing in a new tax type and form generation.

[1:04:26] And as well as like rules and regs that we would absolutely have to allow the public to inspect

[1:04:33] and weigh on for certain amounts of time should like we start down the legislation path.

[1:04:39] So it's not something that's an immediate fix.

[1:04:43] I mean we definitely could if it's you know the will of council to entertain something like this.

[1:04:50] We could definitely head down that path but it's not going to be something that's going to happen overnight.

[1:04:55] So time constraints and maybe resources.

[1:05:00] This is an order to institute it, it would be a constraint for my department, like currently.

[1:05:08] I mean, I would say something that we could move forward with cautious optimism and not to

[1:05:14] second guess anything. You guys know this way better than I do, so I don't mean to

[1:05:18] second guess you, but we have sat at tables with lawyers that told us, yeah, you can collect

[1:05:22] this tax. It's no problem. And then it turns out we can't. So it's something that should

[1:05:28] we looked into further but to echo what Jen said. Finance is the one area in the city that you

[1:05:33] got to spend money to make money. It's actually incredible the amount of work that Jen and Ian

[1:05:39] and their entire staff does to bring in as much money as possible for the city of Pittsburgh.

[1:05:45] And we can't commend them enough but they can only do so much. So if we want to explore something new,

[1:05:50] we should take it very slowly and be very methodical but also make sure that they have the resources

[1:05:55] So we don't set to high-of-expectations and then come back in three years and we dug ourselves

[1:06:00] the giant hole without making any progress.

[1:06:03] So it's definitely something that we should look into.

[1:06:06] We should get every penny that we possibly could because we'd want to provide good services

[1:06:10] to the city of Pittsburgh and its residents.

[1:06:14] But we have to make sure that we're not putting ourselves in a compromise position.

[1:06:20] And to add to Pete's comments, I mean, we did institute like a Billboard exercise tax, which we did many years ago, and we're still not collecting because it's tied up in litigation.

[1:06:35] So these are concerns, you know, for us, just because we head down that road, it doesn't mean that we'll actually get there.

[1:06:44] So, and it will take resources from us in order to be able to do it.

[1:06:53] Thank you, appreciate that answer, all of just a one-on-one question, and then I'll wrap up with a comment.

[1:07:01] When, this might, I believe this is for a comma week of primarily, but others can try to, when we discussed pilot agreements.

[1:07:11] There was cynicism of the one-PGH plan that made a video put into place because it was a third party nonprofit that would collect the funds,

[1:07:20] than work-decented on city priorities there as not that an agreement reached system, but it's

[1:07:31] my understanding that any agreement probably would not go straight to city conferences because

[1:07:38] of the tax benefits that the institutions would realize by contributing to a non-profit

[1:07:48] rather than to a droplet to the city, to government.

[1:07:52] Is this a challenge that you find elsewhere and how is it handled elsewhere and how

[1:07:57] is public perception?

[1:07:58] I think one of the big downfalls of the things that I was put into place was public perception

[1:08:04] of that being, you know, called a slosh song or being called something else, but if it

[1:08:11] is the most the only way that institutions will want to increase this but coming to the city

[1:08:21] ultimately because they're then receiving that tax benefit or two it's only way that a deal

[1:08:26] gets on how our other state grappling with that aspect of it. Yeah I know what that at least in

[1:08:34] Providence and Baltimore a lot of like and Providence those payments from the universities and hospitals

[1:08:41] go directly into the city's general fund or they're like earmarks, you know, these long-term

[1:08:47] hello use. And so I guess, you know, I guess the short answer there is, at least I

[1:08:54] know that in Providence and Baltimore they're not grappling with it. In the same way, I

[1:09:01] don't know exactly about Boston to be honest, but I think the fact that they have just

[1:09:08] like very clear formula based system and, you know, the fact that, you know, they have like

[1:09:13] a lot of public reporting, some states, like I think that probably helps a little bit.

[1:09:20] You know, I will say, you know, I type usually is on the kind of policy side, less so when

[1:09:25] the administrative side, so apologies if I don't have a lot of a detailed first ones.

[1:09:31] No, it's helpful, even knowing that if you'd be able to point to a few other cities that can

[1:09:38] the understanding it's not always an apples to apples compare us and understanding that there are few of the cities to point to

[1:09:45] could be helpful in future negotiations that are cities entering into.

[1:09:50] So, that's great.

[1:09:52] Okay, lastly, I'll turn it over to my back to the non-chair to the council colleagues.

[1:10:00] The general stance here is, yes, we should be collective or revenue. No, we don't want to have to move into an austerity mode. No one wants that. It's painful for everyone.

[1:10:15] We're going to do a vast majority of what we're sending our funds on is vast, that's the

[1:10:21] majority is positive and is exactly where we should be spending our money, I think.

[1:10:28] And any kind of revenue generation involves trade-offs and involves some level of pain

[1:10:34] for some partners for not even partners, institutions, individuals, residents, etc.

[1:10:45] So there's no easy answer, but I appreciate the panoply options that we're offered today

[1:10:50] and look forward to future budget decisions.

[1:10:53] Thank you.

[1:10:54] Madam Chair.

[1:10:58] Great.

[1:10:58] Thank you.

[1:11:00] With that, I believe Councilman Sharland

[1:11:11] may actually be under the weather today, so he

[1:11:14] may not be up for, and I'm very appreciative that he joined.

[1:11:29] Great.

[1:11:30] I don't think I have a whole question.

[1:11:33] This was a lot to digest.

[1:11:35] And I really thank you for putting together this.

[1:11:41] You're kind of an immediate opportunity for us.

[1:11:46] And I'm actually very excited to have for the discussion topics,

[1:11:50] but I don't really have questions right now.

[1:11:51] because I'm a good candidate, just a big thank you.

[1:11:56] Thanks.

[1:11:56] Thanks, thank you.

[1:11:57] Thank you.

[1:11:59] And then Councilwoman Smith.

[1:12:03] Thank you, and thank you all.

[1:12:05] And thank you, Councilwoman, for organizing this.

[1:12:10] I'm going to be honest, I have said very vocally that I would vote for a tax increase.

[1:12:15] I think our residents are going struggling for so much right now.

[1:12:19] And especially when we're talking about food justice and making sure that we're giving away funding for food justice, making sure we're giving funding away for housing, making sure we're giving funding away for grants, and then we're talking about

[1:12:31] now tax increasing their tax to pay for all those things.

[1:12:34] And yet they need those things.

[1:12:36] And so to me, it's just, it's hypocritical.

[1:12:38] We're talking, I think we need to start looking at our finances.

[1:12:41] I don't hear us talking a lot about cutting and holding the line ourselves, including in our council offices.

[1:12:47] And I can do a better job myself, and I know that many of us can, but I also know we give

[1:12:52] away a lot of grant money.

[1:12:55] And could you talk a little bit about in total between housing and opportunity, food justice,

[1:13:02] stop the violence, it used to be echo, I can't remember what they're called, it's called

[1:13:06] now.

[1:13:07] That funny.

[1:13:08] Do you know that a total amount of what we give away in, in, in, in?

[1:13:11] I know housing opportunity and stop the violence are both about 10 million a year.

[1:13:16] I don't know the other amounts to off the top of my head, this is 20, okay.

[1:13:22] I also had the least half of the stock of violence going on.

[1:13:24] I'll close that one.

[1:13:26] We just wanted to do that.

[1:13:27] Thank you.

[1:13:28] When we have, have we spent the housing up to any fund funding that you know,

[1:13:35] off the top of my head?

[1:13:36] I know that you are.

[1:13:37] I know that you are.

[1:13:40] I know that the URA did issue the bond and we have a bond repayment that we make annually too.

[1:13:43] So, I don't know what the URA is sitting on at the moment of the top of my head.

[1:13:49] And have you seen any increases in the salaries across and what we're spending in personnel and salaries in the increase in services?

[1:13:58] Have you looked at that at all?

[1:14:01] If the URA?

[1:14:02] Just in general for the city.

[1:14:04] I know we've hired a lot of people.

[1:14:06] Yes, so we've seen results from that as one wondering.

[1:14:10] I mean, is there audits done to that?

[1:14:12] No, I mean, that's something we are really difficult to measure, but we have hired, we

[1:14:18] have hired added 250 positions in the last two years.

[1:14:22] And do you know where they are?

[1:14:23] Off the top of my head, I don't.

[1:14:25] That's in the back of our annual comprehensive financial report.

[1:14:27] Could you get that to us?

[1:14:29] I'm curious.

[1:14:30] And we are talking and I do know we're talking about new council member or new mayor coming in

[1:14:35] in a new council member and my seat, which I'm excited for.

[1:14:40] So, but I will say that there's talks of having a pilot program.

[1:14:46] And I think before we talk about raising taxes or doing things to our residents, we need

[1:14:50] to have those conversations.

[1:14:52] Where we're cutting back, what we can to cut back, how we're going to freeze hiring in.

[1:15:02] I understand you have to have a new staff coming in. You have to have that. I understand that you're just your transition. I understand that there's a need for additional police and some public safety. I understand the emergency positions. But I think that we're hiring in a lot of places that we're not seeing exactly a lot of results. And my concern is what we're doing. And we have a comprehensive plan. How much have we spent of the comprehensive plan so far? Do you know, director?

[1:15:30] I've taught my head, I know it's over 4 million at this point, I think.

[1:15:35] So we spent over 4 million, and do you know how we spent it?

[1:15:40] There are two separate contracts, and one to put play in it.

[1:15:44] But we've given a lot of money away to people, because I've saw that.

[1:15:47] Yeah, for like the outreach, you would hope they would do very robust hours.

[1:15:53] We should come up with a comprehensive plan, but I haven't been a party to any of that.

[1:15:56] That's what I can't speak to it.

[1:15:57] I mean, it's things like that that I think that I could never have voted for, I didn't vote for the comprehensive land because we weren't in such a financial, you know, it's not an initial difficult situation.

[1:16:07] And when you said that we're not in a crisis, do you say we're not in a crisis?

[1:16:10] I think we are not at a point where it is a crisis. It's very, we're in a very precarious position, but we can avoid being in a crisis, which to me is entering into Act 47.

[1:16:21] that's a crisis, but we're in a very delicate financial position right now for my perspective,

[1:16:28] you know, a lot of municipalities are in this place right now, down towns across the country and

[1:16:34] candidly around the world are dealing with a post pandemic, real estate landscape that no one

[1:16:40] could have anticipated. And I have been very clear about that since I started in this position,

[1:16:45] like no one anticipated what COVID would have done to

[1:16:50] downtown the right where downtown is going to look different forever.

[1:16:56] That said, what will make her break any city is how we respond to this and what

[1:17:00] we do to make sure our real estate portfolio bounces back.

[1:17:06] I mean, kind of the I do think we need a countywide reassessment.

[1:17:10] I have said that for a year and a half or however long I've been here.

[1:17:14] But I do think we need to, when you look, we need revenue.

[1:17:21] I think that when you accurately look at the budget

[1:17:25] and what things were really going to end up costing over the course

[1:17:27] of the next five years, we to get to balance we need revenue.

[1:17:32] And that conversation's going to unfold over the course

[1:17:35] of the next six weeks or eight weeks, some weeks.

[1:17:40] But we need revenue.

[1:17:41] That is an honest assessment from me and I do think pilots or voluntary payments or whatever

[1:17:49] you want to call them are going to have to be a part of that conversation and I agree

[1:17:53] with you.

[1:17:53] I mean we need to figure out some cost containment measures and what is a nice to have versus

[1:17:57] what is a must have and I've always been an agreement with you that public safety and public

[1:18:03] work so those must have and what are things that are nice to have that we maybe don't need

[1:18:07] the next couple years. Next year's bond repayment is budgeted to be $75 million dollars and

[1:18:12] so there are some things that are probably nice to have so that we aren't going to spend

[1:18:17] money on next year and we need to make sure that the nice to have are not in the budget next year

[1:18:22] maybe and we're prioritizing the must-have and we are going to make sure that we should we're not

[1:18:29] a budgeting office but the prioritizing police officers we need to make sure that we are

[1:18:37] We have police on the streets because we are severely short staffed and put up a lot of

[1:18:42] to be honest.

[1:18:43] I think we need more police but I also think that we need to allow the police to do

[1:18:47] the job.

[1:18:47] If you have two police officers doing their job or two hundred not doing anything, we're wasting

[1:18:52] our money.

[1:18:53] So we need officers to be able to do their job to do law enforcement.

[1:18:57] And I made that clear before I did any kind of endorsements or anything in this past

[1:19:04] election, that to me that's a priority because we have people struggling every single day in

[1:19:09] the communities that need it the most. And they're the ones reaching out to me, not, you know,

[1:19:13] a lot of elitist of areas that moved into the city or people who have never experienced crime,

[1:19:19] but actually people in neighborhoods that are high crime areas, they're asking for some help. And so

[1:19:23] it's great when a lot of white kids come down and sit here and talk about how we need to do something

[1:19:27] about crime in the black community, you mean where the black community is saying the total opposite.

[1:19:30] So it's nice to hear from the people that actually are affected and I have I've heard a lot from them

[1:19:38] So with that said I will also say when we talk about trash and I heard you mentioned about trash and charging for you

[1:19:44] We don't charge for trash we don't offer a lot in the city of Pittsburgh

[1:19:47] That's one of the things we offer that people do appreciate

[1:19:50] And I think we also need to make sure that when we're hiring all these extra people that were picking up after the trash when they leave behind

[1:19:56] That's left behind because people are also frustrated with that

[1:19:59] Um...

[1:20:00] But for me, I would never vote for an increase in tax, especially if we're not doing cutting back on our own spending. Watching our own increases and watching the grand funding. And I think with the grand funding that we give out, it's a lot of money. And we're handing out money at the same time, we're saying people are so poor, they need help, but then we're going to increase through the tax. I mean, I mean, get our priorities straight. And let's stop talking hypocritical out of both sides of our mouths. We either want to help people or we don't.

[1:20:29] If we want to help people, we're looking at what are spending, we're cutting back what we need to, and we're doing what we have to do.

[1:20:35] That's it for me. Thank you.

[1:20:38] Thank you, council president.

[1:20:40] Thank you so much.

[1:20:42] No, okay.

[1:20:43] All right, then I'll move on to council on grass.

[1:20:50] I really appreciate the panel and the thoughtful kind of diverse ideas here.

[1:20:56] Um, I took a lot of notes that is a lot to, to digest, um, but what I heard from the

[1:21:07] presentation, it is about taxing him, who pays more in who pays less in taxes. And so what I heard,

[1:21:15] very distinctly, and I think very clearly presented in the charts and in the very nice bar charts

[1:21:19] graphs is that we're talking about texting people who are definitely not hungry and are

[1:21:26] definitely not housing insecure and are definitely not the people complaining about

[1:21:31] crime in the streets. Right, we're talking about the 1% is what it looked to me in your

[1:21:37] chart pays significantly. Would you like to review that for us? Yeah, definitely.

[1:21:45] I'm going

[1:21:45] I jumped to some of the notes that I scribbled down, and we're talking about not a

[1:21:51] millaging crease, which is what usually we're talking about, which I think is

[1:21:57] regressive in the city, that kind of regressively affects renters and home owners.

[1:22:04] But here on one of the charts, it says something like looking at the wrong person.

[1:22:12] It's something like,

[1:22:20] oh, who, it's one, the top 1%.

[1:22:23] So I just want to increase that halfway down the packet, right?

[1:22:27] Who pays for a tax increase?

[1:22:30] Yeah, so the top 1% will pay 51% of the taxes in that group

[1:22:36] of people, or I'll see this because the camera, once again,

[1:22:39] is not on me while I'm speaking, hello.

[1:22:43] So if you can show me on the screen,

[1:22:47] You would be really, there we go, you can see a little bit of things feet.

[1:22:52] This pie charts is meant to be the 300,000 people of the city Pittsburgh, right?

[1:23:01] And so this half is one, the one percent.

[1:23:05] That's right.

[1:23:06] And so this pie charts as it 3,000 people have income that they didn't earn from a job.

[1:23:16] of an average of $2 million, so 3,000 people in the city of Pittsburgh, some of them have

[1:23:23] a tremendously high annual income from money that they didn't earn through a job, because

[1:23:31] that's 2,000, this is the average.

[1:23:33] Am I reading that?

[1:23:34] Yeah, that's right.

[1:23:35] Okay, so again, this is how much revenue the city would earn, but only 3,000 people are

[1:23:42] that. And those 3,000 people may have a job that has a salary, but on top of that. That's right.

[1:23:51] In addition to whatever job they may have, they're asset just magically give them $2 million

[1:23:58] a year on average. Okay, so I just wanted to re-emphasize that point. So there's 297,000 other people

[1:24:07] who are over here, and then of those 297,000 other people, about 25%, so I'm going to do

[1:24:18] that off for you.

[1:24:20] That's like 80,000 people or so, less than any, like 75,000 people, may also may have a job,

[1:24:28] and we don't know how much the job pays them, may pay them a dollar a year, may pay them

[1:24:32] a million dollars a year.

[1:24:33] But on top of that job, about 75,000 people have unarmed revenue,

[1:24:41] does the magically appearing money in their lives

[1:24:43] of $500,000 a year on average?

[1:24:46] Yeah, that's their total income, so it would include.

[1:24:49] Okay, that's total income, so not magically appearing in addition to a job.

[1:24:53] Some of it would be from a job.

[1:24:55] Okay, yeah. Okay, good.

[1:24:57] And so it says that, so that's the next 4%.

[1:25:00] So, this, like, this big blue half, yeah, where am I? Good. And then this dark blue quarter is the top 5% of people. So, this is a total of 6,000 people. I doing that math right. No, can't be. Somebody help me out.

[1:25:23] Right. 4% of the people would be 12,000 people in the city Pittsburgh. Right? And 1% of the people's 3,000 people in the city.

[1:25:31] people the city puts brick. So this whole three quarters of this part chart is being paid by only

[1:25:36] 7,000 people. They just did the math rate. 15,000. Thank you. Thank you. Thank you. I come

[1:25:42] not to your right. All right. So it's not too many. It's really just a few.

[1:25:53] And they're very, very,

[1:25:54] very high incomes. And they're not the people who are receiving a

[1:26:05] food assistance.

[1:26:08] And they're

[1:26:08] people who would qualify for rental assistance. And so it's a very, you know, we are trying

[1:26:17] your proposal where we to attempt this fair, would we going it again?

[1:26:25] Fair share tax. Fair share tax would definitely decrease the tax burden on the people

[1:26:35] if you do need our assistance, and that who are our grant programs are aimed at.

[1:26:41] So I just wanted to make sure I understood what the proposal that we just were presented

[1:26:47] was. So we don't know if it will work. That's debatable. And then we need to figure out what

[1:26:58] we just heard is how would we do it? And really like how many people in the organizational

[1:27:04] chart would it take?

[1:27:06] God knows what would need another million dollar technology package that we're

[1:27:10] constantly needing to be faced with, right?

[1:27:12] Right.

[1:27:12] Those are expensive.

[1:27:15] They don't.

[1:27:15] They've taken years to debug.

[1:27:18] JDEs, taking 20, it's still not working right?

[1:27:22] So there's that.

[1:27:23] That was forced on us by the Act 47 committee, but you know, we are still having to undo

[1:27:31] the problems that that created.

[1:27:35] So, I want to ask a couple of questions, but I think so I think I move on to our next speaker, Mr. Fetter.

[1:27:43] Possibly, in your presentation, you say that there's an exception to the exception so that we clearly can tax what the state already taxes.

[1:28:01] That's from this red shirt.

[1:28:06] But you also said that the state kind of treats these all separately.

[1:28:11] And so when this box where there's a bunch lumped together, are those treated separately?

[1:28:19] So here's why I ask, right?

[1:28:21] So it says net income from rents, royalties, patents, and copyrights.

[1:28:29] Where we need to consider a fair share tax?

[1:28:32] Is it

[1:28:37] can we Terry pick?

[1:28:39] The short answer to that question council member is yes.

[1:28:42] Okay.

[1:28:43] It's easy to read answers that if you pick that entire category,

[1:28:48] or you exclude that entire category,

[1:28:50] because the state already treats that as one lump sum category.

[1:28:54] But as long as there's a material difference

[1:28:57] between income from rent and income from patents,

[1:29:02] which there surely is.

[1:29:03] It's itemized on some other text form somewhere.

[1:29:06] The uniformity clause would certainly allow you to

[1:29:09] cherry-peck to use your words.

[1:29:11] They would have to be a rational basis for why you would choose in one or the other,

[1:29:15] but I don't think you would have any difficulty coming up with those rational basis.

[1:29:19] And so the same is true for each of the red boxes as a lump.

[1:29:23] So the city of Pittsburgh could consider taxing interest and dividends or interest or dividends.

[1:29:30] that interests and gains from disposing dispositions of property or one of the other, et cetera.

[1:29:39] So we could do all of these or we could attempt to do some of these. Correct. Thank you.

[1:29:46] I think that's also interesting. So there might follow up question would be, which we don't probably know right now.

[1:29:54] In other cities in Pennsylvania, which ones are easier to collect?

[1:30:00] We take the least amount of people and the least complicated software, so if we're attempting to balance the capacity that we need in personal and in technical expertise and in literally the mechanics of the collections, right? Sometimes we have to do hard mail and it's expensive, sometimes we don't. That should be part of our consideration.

[1:30:30] I don't know the answer, but I will say that is the exact question that I wanted someone to ask

[1:30:34] because like, one of the keys to doing this successfully is to like, not make it harder than it needs to be.

[1:30:41] Like if somebody else is already doing it, let's just do it how they do it.

[1:30:43] Let's do it.

[1:30:44] If it's a step forward for us, let's take that first step forward.

[1:30:48] Don't make it too hard.

[1:30:50] Does anyone know the answer to our heavy hands?

[1:30:52] Help for hints on how to figure that out?

[1:30:54] I can answer your question in part.

[1:30:56] The city of Philadelphia currently taxes interest dividends and capital gains, and I can tell you that administratively

[1:31:04] They get good cooperation from the Commonwealth Department of Revenue and given that the Commonwealth Department of Revenue already has information from everybody's PA 40 about each of those seven categories

[1:31:16] Separate like the Commonwealth can share with you if you were to break up one of those categories into subcategories

[1:31:22] I would imagine that would get a little more difficult, but as long as you're sticking to any one or two or three of those red boxes

[1:31:29] The Commonwealth shares that data with the city of Philadelphia

[1:31:33] I can't speak for the Commonwealth, but I don't see why they wouldn't share that information

[1:31:38] It doesn't mean there isn't ramp up costs and administrative costs

[1:31:41] I'm not disagreeing with the fire director at all

[1:31:44] But the Commonwealth can share a lot of that information with you to make administration significantly easier

[1:31:50] which is the way we do it in Philadelphia.

[1:31:51] I say, I used to work for the city of Philadelphia.

[1:31:55] So if you're one of those people in the big blue part

[1:31:59] of the pie chart with the $2 million income

[1:32:02] and you live in the state of Pennsylvania,

[1:32:03] you live in the state of Pittsburgh,

[1:32:07] you already

[1:32:07] have itemized on your state's Pennsylvania tax return

[1:32:11] every year, you've already got a number here

[1:32:14] and the state's already sharing that with Philadelphia.

[1:32:18] Yes, you already have that number there.

[1:32:20] the state is already sharing that with Philadelphia for the categories that Philadelphia taxes.

[1:32:24] Right, and so hypothetically for the categories that Pittsburgh might consider taxing,

[1:32:28] it might also be easy information to get.

[1:32:32] Good to know.

[1:32:33] I think that wraps it up. Thank you, Memphier.

[1:32:37] Great, thank you.

[1:32:40] I know, well, before I get to my comments, I'm happy to do a round two.

[1:32:48] Councilman Straussberger, did you have a round two?

[1:32:57] Now that we're talking based off of that last conversation,

[1:33:02] I'm curious, since you all know

[1:33:04] how to do we know

[1:33:09] and how many people, like what percentage of people continue to pay the tax?

[1:33:23] I can only speak to that the cities had on the books for decades and so I can't I can't speak to the revenue impact, although it's very easily accessible from the city's financial reports.

[1:33:37] Okay.

[1:33:40] Did the states say, well, if it's decreased over time, that's not the interesting to me.

[1:33:45] So we'll look after them.

[1:33:47] Thank you.

[1:33:50] I noticed when I was looking at the website yesterday in Philadelphia that they also used this tax to tax short-term rentals.

[1:33:57] Is that anything that you're familiar with or can speak to?

[1:34:02] I think that's probably a different text.

[1:34:05] Okay, all right, sorry.

[1:34:06] I think that's probably from our hotel tax.

[1:34:26] I do.

[1:34:27] I do.

[1:34:30] Yeah, I do.

[1:34:30] I just want to know a couple things.

[1:34:35] Let me just check something real quick, I'm sorry.

[1:34:38] I just want to know when you talk about this higher percentage paying the tax that they would be.

[1:34:43] What did you base that off of? I mean, what is there? What's the income? The household income? How many people living in the household?

[1:34:49] What's the debt? Do you know? I mean, what do you base that off of?

[1:34:52] Do you think you need that? It's tax, you know, based on tax units. Okay.

[1:34:56] In Pittsburgh. And so I'm just wondering, because, you know, my son and his...

[1:35:00] This is a girl for they look great on paper financially, but they're student debt and the things that they have, they couldn't afford any more increases either.

[1:35:10] So I know a lot of people that make a decent pay and decent salary and have a home and cars and all those things on paper looks great.

[1:35:18] But in reality, they're saddled with student debt and just childhood, every day childhood care.

[1:35:25] Those types of things are really a drain on people's budget, so I don't like to hear

[1:35:29] us talking about, you know, as if we know what some of these struggles are because we

[1:35:34] don't, you know, and you don't know, you know what you see on paper, you don't know what's

[1:35:36] going on in their house, you know, and who they're taking care of, who they're helping, and

[1:35:40] so those kinds of things make me worry about people in general, and that's not saying that

[1:35:43] these people, other people that aren't wealthy aren't going to pay tax, they're still going

[1:35:47] to pay a tax, and so they're still struggling, and we have people that are not paying,

[1:35:51] what they need to pay.

[1:35:53] And we know that there's a lot that we had back when we had fewer in tax service, they recommended

[1:35:58] that we collect taxes from people who weren't paying because it was in the millions that

[1:36:02] we could have collected.

[1:36:03] And we don't.

[1:36:05] So, you know, I think there's a lot to be said here and there's a lot of discussion that

[1:36:09] needs to happen internally before we start talking too much externally and we start saying

[1:36:13] things that maybe people don't want necessarily want to have a discussion about, but I'm

[1:36:18] ready to have it.

[1:36:20] Thank you.

[1:36:21] Thank you, Councillor.

[1:36:24] Thank you. I think I have a question I forgot to ask is the notion that a non-profit corporation, like

[1:36:36] UPMC, Kernany University,

[1:36:42] would not agree to a payment in lieu of taxes

[1:36:51] because they don't pay taxes.

[1:36:53] So, the pilot is a payment and lieu of those taxes

[1:37:00] because they want to donate to a non-profit to lower their taxes.

[1:37:08] Which I think was posited here.

[1:37:12] But it seems to be mutually exclusive.

[1:37:17] So, if you donate to a non-profit, if you're corporation and you donate to a non-profit to lower your taxes,

[1:37:23] it's because you pay taxes. You pay taxes. You're not a non-profit exempt from taxes.

[1:37:33] And so

[1:37:33] if you were going to pay a payment in lieu, it's because so if you were paying taxes, and

[1:37:40] can benefit from a non-profit contribution, then you should be paying city-pizper taxes. I wouldn't

[1:37:48] I, I guess I don't know this, I wouldn't imagine that there's a tax benefit, at least under a federal law, to paying to one P.G.H. if you're like a nonprofit again.

[1:38:02] But like big brother big sisters wouldn't donate to the greater Pittsburgh community food bank.

[1:38:10] I mean, they, maybe they wouldn't, there's no tax benefit to them.

[1:38:15] Right. So, so we can't be like, well, I'm not giving you City of Pittsburgh a payment

[1:38:22] and live because I have some other tax benefit because it makes sense. Yeah. I will say

[1:38:27] that I do think that there is a benefit for City residents to demonstrate where a voluntary

[1:38:34] payment is going because I think from the Pittsburgh Public Service Fund in 2004, those payment,

[1:38:43] like there was no transparency in that process and the money from what we can tell when

[1:38:49] into the general fund, literally what you see here is what we have access to and I can

[1:38:54] get you all copies of what we have in terms of the agreement. It's a six-page letter between

[1:39:01] the city and the diocese which also doesn't make any sense, but there was no transparency

[1:39:08] from the city side whatsoever.

[1:39:10] So from my perspective, I believe that we all would benefit

[1:39:14] with some degree of, this is what the money is going

[1:39:17] toward.

[1:39:20] So I think it should go toward the operation of city government,

[1:39:24] whatever that looks like.

[1:39:25] And if it's towards the free fund, if it's towards something

[1:39:28] that's towards the beautification of downtown,

[1:39:31] or what have you.

[1:39:33] But I, the argument that, because of the tax exempt from my perspective, I, at least as it relates to federal tax law.

[1:39:42] If there's some tax benefit you get from donating to an nonprofit, then you should be paying your city for different taxes.

[1:39:47] I'm not a tax professional, but in my simple mind, it kind of makes sense to me.

[1:39:53] If you pay taxes somewhere, then you need an exemption for donating to an unprofit, then you should also be paying your city for different taxes also.

[1:40:00] All right. Okay. I think that is awesome. I thought it was. Thank you, men.

[1:40:04] Can I just ask one question more? So, you know, so, you know, so, Dean Freeson, who's in the attorney behind, who works in our office, or for, you know, consulting with our office. Also said that he thinks that, um, P.A. law requires a flat tax on income, not tiered, um, and that a change of state law may be required for the fair share plan. Do you know if that's accurate?

[1:40:25] I'm fairly confident what the lawyer meant is that you can't have different tax amounts

[1:40:30] for different amounts of income.

[1:40:32] You can't have a graduated tax.

[1:40:33] You can't say someone who earns 100,000 pays more than someone who earns 50,000.

[1:40:38] But nothing in the fair share tax deals with it.

[1:40:41] It's not a tiered tax.

[1:40:42] It's by lump sum categories and I don't think there's any constitution, a confident there's

[1:40:48] no constitutional prohibition if you're categorizing it the way is being proposed in the

[1:40:52] share tax, what you can't do is have higher rates for higher incomes.

[1:40:59] I just want to make sure.

[1:41:00] Thank you.

[1:41:02] Yeah, thank you.

[1:41:04] Thank you.

[1:41:05] Yeah, please.

[1:41:05] Yeah, go ahead, please.

[1:41:06] Thank you.

[1:41:07] Thank you.

[1:41:08] I just wanted to see that this idea that I introduced about a separate fund rather than directly to the city and any kind of payment and lieu program.

[1:41:22] was introduced to me by a budget director, Jake Pollock, and so he's someone I'd like to talk

[1:41:30] to about this or anyone has thought and to ask him what that information exactly was and

[1:41:38] a drill done for other. I'd like to understand it as well. I'm certainly not a proponent of that scheme.

[1:41:45] I'd rather come directly to the city, but that was my understanding from a meeting we had about a year ago

[1:41:51] you're going to have to go with the mayor's office that that was likely going to be the

[1:41:58] condition that had to be met were any agreement to be reached during this administration.

[1:42:07] So he would be the one to ask and that certainly can follow up with him.

[1:42:14] Thank you.

[1:42:16] So just, you know, obviously, just a few questions, just to kind of clarify.

[1:42:25] So when we were talking about the village, it could also,

[1:42:30] Maybe I'll take a step back and sort of say, I agree with Councilman Smith, right?

[1:42:35] That we should not wait.

[1:42:39] Nobody wants to raise taxes.

[1:42:41] Certainly, no elected official wants to raise taxes.

[1:42:43] But we don't want to raise taxes on our residents.

[1:42:48] But the issue that I see it today, right, where we are right now, like going into next year,

[1:42:56] is that I firmly believe that in the city of Pittsburgh.

[1:43:03] So, well, let me just say, so, director Goli, you had said, for taking this sort of mean person,

[1:43:11] of $72,000 a year, like I earned $72,000 a year and my property is valued at $100,000.

[1:43:18] So that's sort of like the person that we're just sort of like generic Pittsburgher that we're taking.

[1:43:25] The total city tax is 1,535,

[1:43:35] that's for the city.

[1:43:37] Just for the city.

[1:43:42] And what is the, yeah, what is the month, I'm just curious,

[1:43:45] like for that, what is the monthly contribution that that person makes?

[1:43:51] the monthly contribution.

[1:43:55] Yeah. It would be, well, we'd be $127 a month. So I just want to make that, I mean, I understand we talk about it, but I want to make that clear. So if you're, if this sort of average person,

[1:44:11] $72,000 a year. Their property is valued at $100,000. They are paying $127 a month.

[1:44:21] $127 a month.

[1:44:24] For parks, for pools, for fields, and sports, I mean, is this the right number?

[1:44:32] So let's say that's just the moment. So, right. So for city, okay, so if you're $100,000 worth of assessment, your tax bill is

[1:44:42] $806 a year. Okay. Okay. Your income, if you make, that's just for the city. That's not

[1:44:49] including library parks. Right. And that's not including school district. Right. I'm looking at

[1:44:55] just business. So what do I pay? If I'm 70, if I make 72,000 a year and my-

[1:45:00] My property is valued at $100,000. What do I do in total? Income would be another $729.35.

[1:45:08] So what's the total that I pay a year?

[1:45:19] 1535.

[1:45:21] So 1535 is what I pay per year.

[1:45:25] And this is one thing I really need the residents to understand.

[1:45:28] right is at the city we're not talking and we I get it you're also paying county you're also paying

[1:45:35] school but you know for us at the city we are really talking about the services so so divide that by 12

[1:45:43] and that is $127.9 a month so for $127 or you know $128 a month that is your garbage pick up your

[1:45:56] you know, paved your your pools, your wreck centers, your senior centers, you're like, you know, I mean, the police, the fire, the EMS PLA, all of it, right?

[1:46:08] Right, and I guess if you relate to what Keate showed earlier was $300 and some dollars.

[1:46:13] Yeah, it's $400, so much.

[1:46:15] Yeah, you pay it on $2,000, but you get $4,400.

[1:46:18] Right, so like, $1,000, but like, you get almost $400 a month in service.

[1:46:23] So I just want to put it into context for what, and when we talk about, so there's that,

[1:46:33] I just want to make that clear, and I think that one thing that I want is it's about living

[1:46:38] in Pittsburgh, right?

[1:46:40] Like the thing, I was speaking for myself, right?

[1:46:44] But I live in Greenfield, right?

[1:46:47] But the thing that makes Pittsburgh so amazing to live in is that we have, I mean, my

[1:46:54] kid, my youngest goes to after school, he gets free after school care, right, free at the

[1:47:00] rest center.

[1:47:02] You know, you know, there's summer camps at the rest centers that are free, we have pools that

[1:47:07] are free, the parks, the fields, the oval, the ice drink, like if it's not free, it's

[1:47:15] It's very affordable to use all these things and then fire EMS and all these other things you hope you don't need, but they're there.

[1:47:23] So I just, you know, and we are at this major crunch in budget and I don't think whether it's for a residence now, who live here now or for attracting new residents,

[1:47:36] cutting those things is not where it's at for me right cutting those things and there are

[1:47:43] things that we struggle with right we struggle with snow we struggle with litter we struggle

[1:47:49] with with tearing down vacant and abandoned properties right we those are things that we struggle

[1:47:54] with right and and in some of our most neglected neighborhoods as well and we need to do better

[1:48:00] So I think that's the conversation that we should be having because when we talk about like belt tightening

[1:48:06] That's talking about reducing services and I think the way that anyway, so so you know for for that average Pittsburgh or that

[1:48:14] $127 a month

[1:48:17] That you're paying in city taxes, right that's

[1:48:24] You're you're getting quite a bit, right the taxpayer is getting quite a bit now

[1:48:29] When we get to a village, you know, we talk about village, because that's the tool that we have,

[1:48:34] a council, right?

[1:48:35] It's up the village.

[1:48:36] That's what we can do.

[1:48:37] That's what we can do in the budget.

[1:48:39] However, we have on the other hand, these giant nonprofits, right?

[1:48:46] That are making, I mean, I don't, like, what would the, what, if you PMC were not a non-profit?

[1:48:52] Do we have an idea of how much they would be paying in taxes a year?

[1:48:59] It's like 30 million or, yeah, it's a report, yeah, it's in the report, but what I will say is the federal government is cutting Medicare and Medicaid, which is 70% of their clients, and that is a real thing.

[1:49:11] Well, that made me today, but I'm just talking, you know, right.

[1:49:14] It's not, right or so.

[1:49:19] And we don't have the ability as a city to determine tax service.

[1:49:24] I understand, but I'm just saying if they were, right, what is the report say that they would be paying?

[1:49:32] So you can see if they were not tax exempt, they would be paying 58.3 million.

[1:49:37] Okay, so they'd be paying 58.3 million dollars a year to the City of Pittsburgh.

[1:49:43] No, that's all.

[1:49:45] Sorry, that's the amount of property that would be exempt from taxes.

[1:49:51] In all three governments.

[1:49:52] Hey y'all three, I'm sorry, so county, all governments and school districts.

[1:49:56] Okay, so do we know like what they would be paying in taxes if they were paying?

[1:50:00] Or if they, if they, you know, we're not.

[1:50:02] Collectively, the top five, we can trade you $127.5 million, so that's the big top five non-profits.

[1:50:10] $127.5 million a year?

[1:50:13] Yes.

[1:50:14] A year.

[1:50:16] $127.5 million a year.

[1:50:20] The top five non-profits attributed to real estate, correct?

[1:50:26] Yes.

[1:50:26] So they do pay, so they do pay some payroll expense and parking.

[1:50:33] But I payles and compare them to the real estate.

[1:50:35] And that's the all three, sorry.

[1:50:38] The city of Pittsburgh is 34 million.

[1:50:39] 34 million, okay, that's sort of what, okay.

[1:50:41] But nonetheless, so when we're balancing

[1:50:45] Millage increase, that's, you know,

[1:50:48] Millage increase versus this pilots, right?

[1:50:50] That's what we're talking about.

[1:50:51] It's property taxes, right?

[1:50:53] So, you know, I mean, I sort of looked up, so UPM feels like a 100,000 employees HN has about

[1:51:01] 22,000 CMU, 11,000 pit 15,000.

[1:51:04] So, I mean, if right out of the gate, if UPMC would just commit to 20 million a year for

[1:51:09] 10 years, an A HN would commit to 10 million year for, you know, and maybe PIT and CMU,

[1:51:15] 5 million each, just that, right, just throw those numbers out there.

[1:51:20] that would be $40 million dollars that we would have as a city

[1:51:24] Pittsburgh and we wouldn't even need to be talking about these

[1:51:26] milligen creases, right? But there's just, I mean, I, you know, I would

[1:51:34] love to see that happen tomorrow. I'd love to, I'd love for, for the mayor

[1:51:38] elect to get a phone call tomorrow saying, yeah, we're doing it. You don't need to

[1:51:42] have this convict. You don't need to worry about this. We're gonna do it today. So

[1:51:46] that when we do our budget come up here in December,

[1:51:51] that we know that I know that we can just do a $10 million

[1:51:54] a year fund for fleet, that I know that I can give pay

[1:51:59] increases to all the DPW supervisors, right,

[1:52:04] who like have, you know, whatever, that we know that we

[1:52:08] can, you know, whatever this worker who's like literally

[1:52:10] looking around and talking about quitting like these workers who

[1:52:14] you just desperately need to do the work that we do.

[1:52:18] That PLI could get the whatever 10 million they need to actually make some serious progress

[1:52:23] on tearing down some of these awful properties, all over our city.

[1:52:27] These nonprofits could step up today.

[1:52:30] They could pick up the phone today.

[1:52:37] But since we don't know if they're going to do that, right?

[1:52:41] Like since we don't know, that's what I want to come back to the village, just to clarify

[1:52:46] some of these numbers.

[1:52:48] So, director Gula, so hypothetically, right?

[1:52:55] So, we're saying like 127 a month is what your average Pittsburghers paying for city services,

[1:53:02] If we were to increase the mileage by 20%, that would be an additional $161 for that person, right?

[1:53:13] That would be an additional $161.

[1:53:15] And if we did that, that would bring the city $34 million.6 Dollars, right, for with a 20%

[1:53:25] knowledge increase.

[1:53:26] If you go down to 10%, 10% knowledge increase, that would be an additional $81 for that

[1:53:34] Pittsburgher.

[1:53:35] Now, that would bring us just 17 million.4, right?

[1:53:41] So, you know, if you look at the 10%, that would, you know, that would bring you just

[1:53:44] over $200 a month in taxes, which you're paying for city services.

[1:53:53] I just want those numbers to be clear, like for the press and for the public, right?

[1:53:59] And again, please, to underscore, we are talking about the taxes that you pay to the city

[1:54:03] and we do understand that you pay taxes to the county and you pay taxes to the school district.

[1:54:07] we do. We understand that.

[1:54:12] And then, you know, with regards to the, um, to the fair share

[1:54:17] tax, you know, I think it was, we said, this is not something that's going to happen this

[1:54:23] budget season, right? This is just a broader conversation that I think all Pittsburghers

[1:54:27] should be having, right? This is a broader conversation about, and when we talk about interest

[1:54:32] dividends capital gains that's like on your you know like that's that's the money that you have in the bank that's like

[1:54:39] you know that's like your stock you know like your and it does not include we're not talking about retirement funds

[1:54:45] we're not talking about pensions right we're talking about your your stocks and bonds right like the

[1:54:52] you know and and we're talking about people who the the lines share of that tax would be paid by people who make

[1:55:00] Around $2 million a year. And I think it's important to talk about that because in Pittsburgh in the past 10 years, and I say that because I'm new to Pittsburgh, right? And I would actually, I would be, I would be a person who would be paying this fair share tax and maybe not the highest, but you know what I mean, I definitely would be paying it.

[1:55:24] We have lots of higher earners who are moving into the city. That's a fact. I think that's part of the reason that our earned income tax is going up a bit, right?

[1:55:31] We do have higher earners and sadly some of our lower income earners are being pushed out of the city, right?

[1:55:41] But you know, all those folks who have all that money are benefiting from all these same things.

[1:55:47] They come to Pittsburgh because of these things because of the parks and the pools and the restaurants and all the cool stuff.

[1:55:53] And it is safe, right, that this is a safe city.

[1:55:55] It's an urban area, but you can let your kids kind of walk to the library and go here and there.

[1:56:04] I think we need to have a serious conversation.

[1:56:07] We're talking about building, you know what I mean?

[1:56:09] We've got to build housing and that's expensive, that's $3,000 a month,

[1:56:14] because we've got to have housing for all these wealthy people who are coming to Pittsburgh

[1:56:18] and can pay all this money for rent.

[1:56:19] Well, we need to be paying their fair share.

[1:56:23] So, you know, I'm really grateful to you all for coming and for bringing this right and for presenting this idea because it is an idea and I know that it takes some time right like I mean how how how long do you happen to remember how long it kind of took Philly

[1:56:38] To get this in place from like the first conversation it was well before my time okay

[1:56:46] And it is important to know that this is something that other Philadelphia has already figured out, right, is that the high earners need to be paying their fair share, right?

[1:56:57] Because it shouldn't be on the back of average Pittsburghers.

[1:57:04] I don't think I have any other question

[1:57:14] in having this kind

[1:57:28] of the

[1:58:17] residents.

[1:59:14] because the cost of

[1:59:33] it would be the closest thing we would get.

[1:59:48] It needs to do a regular read.

[2:00:00] But it's their job and

[2:00:09] because

[2:00:14] you're paying your fair share,

[2:00:19] investing their house and they're

[2:00:22] getting overtaxed and until there's a reassessment done, they're going to be paying more

[2:00:26] than their fair share. So that's the closest thing we can get to equity, but we have no control

[2:00:30] over that. So that's why I always talk about the military.

[2:00:33] And I agree with that, Pete. I feel like it's always hard for, and I want to, like, it is always

[2:00:40] hard for elected officials to raise taxes, because nobody wants taxes, right?

[2:00:45] That is often feels like a one-way ticket out of your job, but I think too that it would

[2:00:54] be who counsel, and again, we don't have control over what the county does, but if there

[2:00:59] was a way for us to kind of implement like a base increase every two or three years or

[2:01:04] something like that, where we didn't have to have this conversation, right?

[2:01:06] were just sort of, it was just very gradually going up so that it didn't hurt quite so much.

[2:01:12] The other thing I just want to flag is last year we collected less than $400,000 in

[2:01:16] voluntary payments from non-profits so right now the bar is quite low and I do think that

[2:01:22] the conversation needs to start like yesterday and don't let perfectly the enemy of the good.

[2:01:27] I appreciate the work that has been done in other municipalities that we can learn from, but

[2:01:35] we need to have the conversation.

[2:01:37] And I think, you know, I've said from the beginning,

[2:01:41] ever since I started this job, whatever,

[2:01:44] that you can't have a, you can't go to your next door neighbor

[2:01:48] and ask for a couple of sugar if you're in a land dispute

[2:01:51] with your neighbor.

[2:01:52] And we need to put the disagreements aside with that

[2:01:55] and actually ask and have a good faith conversation

[2:01:59] with our nonprofit partners in the city of Pittsburgh.

[2:02:03] We are in a position where we need additional revenue period and other municipalities they've been able to negotiate long-term agreements to bring in additional revenue through voluntary payments.

[2:02:17] And I believe it's my perspective that city residents are owed that good faith discussion from city leaders and we haven't engaged in that conversation in the last few years.

[2:02:28] And at a minimum, I think that the residents are owed that conversation, so I hope that

[2:02:34] that conversation will commence because I think that revenue needs to come in to at least

[2:02:39] alleviate part of the burden, because I think that, you know, we need that money, we need

[2:02:45] that money. So that's my two cents. And hopefully, we'll the next time we do an updated report

[2:02:52] on voluntary payments, it will reflect a digital revenue. Thank you. Thank you for

[2:02:57] meeting this conversation. Yeah, great. Anyone?

[2:03:02] Okay. Well, with that, having exhausted the

[2:03:06] business of this post agenda, this meeting is adjourned.

Post Agenda on 2025-11-06 1:30 PM - Options for Increasing Revenue in the City of Pittsburgh

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