The Pittsburgh pitch
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The next day, he passed along his praise for downtown and Gray’s Lake in a speech to a luncheon group at Hoyt Sherman Place. But the backers of “Yes to Destiny” didn’t bring him out here to say “nice job, now take a break” so he went on to say that Des Moines would be even better if it devoted more money to culture.
Murphy, who served as Pittsburgh’s mayor during 12 challenging years, knew his city back when it was heavily polluted and losing businesses, and now he can point to a long list of beautiful museums, parks and other attractions.
Culture was the perfect emphasis, in his view.
But then, comparing cities is tricky, and you don’t want to rely too much on a report card filled out by the student himself.
In a short interview after his speech, Murphy made it clear that Pittsburgh, which was desperate, had to go way beyond the kind of medicine being considered in Central Iowa, where we seem to have entered our golden age.
Murphy plays a big-city brand of hardball that we have never experienced out here on the prairie. Though he dismissed a published assertion that Pittsburgh is near bankruptcy, he said, “I threatened to put the city in bankruptcy” a few years ago to force changes.
And when it came to taxes, quite a number of changes were made; it wasn’t anything as straightforward as sales tax up, property tax down. “I made the conscious decision to change the city’s tax structure, because it didn’t make any sense,” Murphy said.
The city altered the way it taxes businesses, going to a payroll tax instead of a gross revenues tax.
Forty percent of the property in the city was tax-exempt, he said. So Pittsburgh initiated a “payment in lieu of taxes” agreement that now brings in about $10 million per year.
That’s all we discussed, but apparently there’s a lot more taxation to consider. According to a Pittsburgh Tribune-Review article online, the city also collects a 50 percent tax from parking fees, thus driving the price of parking sky-high; levies a 1 percent tax on the wages or profits earned by city residents; and in 2004 jacked up the “Emergency Services Tax,” which applies to everyone working in Pittsburgh, to $52 from $10.
So maybe we don’t want to be exactly like Pittsburgh.
By the way, the “given” in this debate is that our property tax rate is a frightful problem. Is that true? When they’re charting their future, do young people decide among Des Moines, Minneapolis and San Francisco by analyzing property taxes? Do successful companies pick the absolutely cheapest cities they can find, then sit back and wait for top-flight employees to show up?
I asked Murphy whether “Destiny” would mainly help big business owners save on property taxes and wouldn’t give much to the commoners. He said that if low property taxes induce an insurance company to come here or stay here, that creates jobs for the little guys. A reasonable answer. But just between you and me, Murphy didn’t really seem to believe that property taxes are a major factor.
All in all, Murphy presented a decent case for spending on culture, one that almost made up for his decision to end his speech with a quote from Machiavelli, whose name is synonymous with sneaky politics.
Kind of a surprising choice.