PGHIMC - Pittsburgh Independent Media Center

Structural Adjustment Program for Pittsburgh
by stephen donahue Tuesday, Jul. 13, 2004 at 11:23 AM

The Intergovernmental Cooperation Authority and the Act 47 Coordinators are for Pittsburgh what the International Monetary Fund and the World Bank are for developing nations.

Many still confess confusion at what is going on in our city these days vis-� -vis the Intergovernmental Cooperation Authority (ICA) a.k.a. “the oversight board” and the Act 47 Coordinators. The ICA and the Act 47 Coordinators are two separate entities that are working in tandem, like tag team wrestlers to fix our city’s fiscal crisis.

Both of these entities were established and given their mandate by the Pennsylvania General Assembly. Neither the ICA nor the Act 47 Coordinators have any elected members and neither of them answers to the residents of Pittsburgh and this is by intention. Some say that the ICA does not represent the people of the city and they are right. The state lawmakers who created the ICA and the Act 47 Coordinators never intended for them to represent us. The reason that the General Assembly set up these two entities was to make sure that me and you and the lady down the street don’t get in the way of the structural adjustment program deemed necessary to fix Pittsburgh. Our elected City Council members are too easily swayed by their constituents according to some policy makers. One former City Council member, now the Allegheny County Recorder of Deeds, summed it up by indicating that local policy makers could get more done if they did not have to listen to the people. (Then they wonder why we don’t bother voting.)

So what is Pittsburgh’s immediate crisis? The city will have no more money to operate with by January of 2005 and the city is very deeply in debt. This has led to the bond rating of the city being classified in the “junk” category which means forget getting any loans. Does this sound in a nut shell like the dilemma suffered by many developing nations?

For a poor nation seeking financial aid the International Monetary Fund and the World Bank mandate Structural Adjustment Programs (SAPs) as a condition for obtaining loans. The keystone of any SAP is cuts in government spending. The IMF and the World Bank do not like it when a nation increases taxes on the rich or on corporate wealth to help balance a budget. They want cuts, cuts and more cuts. These cuts are facilitated by requiring that indebted governments initiate programs of privatization and by requiring the adoption of free-market solutions for every government quandary. In indebted nations, SAPs result in great hardship for the poor as governments make deep cuts in social programs and turn basic government services such as drinking water over to for-profit marketeers.

For an indebted city like Pittsburgh the ICA and the Act 47 Coordinators function something like the IMF and the World Bank do for poor nations. They mandate cuts, cuts and more cuts as a condition for receiving any new revenue. The ICA and the Act 47 coordinators want the city to privatize public services and jobs and they want the city to adopt a free market strategy to deal with the city’s fiscal problems. The Act 47 Plan, which Pittsburgh City Council and the Mayor just adopted, mandates that the city cut $33 million in spending by next year. The ICA has indicated that it will require a further $17 million in cuts for a grand total of $50 million before it will allow the city to see any new revenue. The club that the ICA has to force the City Council into submission is their ability to withhold revenue to the city.

Some of the mandated and proposed cuts/adjustments thus far include:
• Closing 9 recreation centers and 21 public swimming pools plus increasing pool fees.
• Outsourcing city custodians
• Turning over our city parks to University of Pittsburgh Medical Center (UPMC)
• Managed competition for city mechanics and refuse workers – a step toward privatization, city workers will have to issue competitive bids along with private providers for the services they already provide.
• Turning over our public Emergency Medical Services and its 167 EMTs to UPMC, Mercy Health and West Penn/Allegheny Health Systems and dramatically increasing fees as well
• Closing down 7 fire houses and cutting 168 firefighters
• Imposing a $200 “processing fee” on every city resident (aprox.17,000/yr) who go through the county jail.
• Freezing city wages

This is not a complete list and is subject to change as the ICA refines the mandates already made by the Act 47 Coordinators and adds more of their own. The ICA plans to have their final list of recommended cuts ready sometime in August.

Increased revenue sources that have been identified and are subject to the city initiating the mandated spending cuts are extremely regressive. They heavily tax only a workers’ earned wages but never touch individual wealth made through capital gains, stocks, dividends, inheritance, interest… New city business taxes will be on an employer’s payroll. It is hard to imagine a boss not passing this tax burden onto employees. There will be no tax on corporate profit.

In indebted nations under the IMF and World Bank labor unions normally suffer hard repression. In Pittsburgh under the ICA and Act 47 labor unions are also under attack but it is more subtle. No anti-union death squads here just the corporate media. A recent article in the Post-Gazette entitled, “Saying no to unions may save city” came right out and said that, “Unions are illogical in the close economy of government.” So the Post-Gazette is pushing for the elimination of public sector unions.

The union workers of Pittsburgh have been made the scapegoat for every city problem. This is all part of a well orchestrated plan to undermine organized labor in this region, both in the public and private sector. No Structural Adjustment Program either for an indebted nation state or for a city like Pittsburgh would be complete without undermining the power of organized working people. Organized workers interfere with the free marketeers profit taking and so they can not be a player in the structurally adjusted Pittsburgh.

In January 2005, the public workforce in Pittsburgh will no longer have real collective bargaining. Beginning then unions will be punished if they do not have an agreement with the city in place on the day following the expiration of an old agreement. For each month of delay, the agreement eventually reached will include a 1% wage decrease for each month of delay. For now on city employees will take what the city dishes out or suffer the consequences. There is no more give and take. There is no more bargaining. There is no more workplace democracy.

Under structural adjustment our City Council chambers have become less democratic as regular city residents are seen as troublesome pests. Under structural adjustments our city work places have become less democratic as collective bargaining is undermined. Under the Pittsburgh SAP local democracy is really in danger.

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