Modelos

G S P I A 202.

CITY OF PITTSBURGH PENSIOM F UNDS.

S u b m i t t e d by G r e d y G a r r i d o

SACKGl?OL?DOF THZ PA03LEt4,
o i t t s b u r g h h as b een c onfronted with s i g n i f i c a n t c hanges
i n i t s e cononlc b ase.

The c i t y has experieaced a net de-

c l i n e i n i t s p opulation; i n t h e y r a r s b otveon 1960 2nd l 9 m ,

a p eriod of t e n y eafs, t h ec i t y faced a n e t p opulation dec l i n e o f 7 1Z.976 as compared t o a n -1 l .3% d e c l i n e d uring t h e
years of 1970 t o 1975, a p eriod o f o nly f i v e y ears.

T his

d r a s t i c d ecrease i n p ogulation a s c omg~ved t o o t h e r h 'orthe
e a s t e r n s t a t e s i s one of t h e g r e a t e s t ; from 1960 t o 1970 N w
York showed a n et p opislation d e c l i n e of only -1.7% ( 1 ) .
Along w ith t h e d ecrease i n net p opulation carne a n e t dec r e a s e i n t h e c i t y ' s p overty population.

P ittaburgh faced a

-30% change i n t h e period between 1960 t o 1970 w hereas New York
City experienced a n e t change of only -10.16% i n t h e populat i o n below t h e poverty l i n e ( 2 ) .

The c i t y ' s p overty popula-

t i o n i s n ot e xcessive when compared t o o t h e r s of t h e n a t i o n l s
l argest c i t i e s , n or when compared t o t h e n a t i o n l s a verage.

In

1970, P i t t s b i r g h had 11.2% o f i t s p opulation below t h e p o v e r t i
l i n e w hile t h e n a t i o n l s a verage was 10.7%.

A s c an be s een,

C

t h e c i t y experienced a tremendous change from 1960 t o 1970 i n
it s p overty p opulationl however t h e r e s u l t was f avorable a s t h e

percent of population a t t h e s ubsistence l e v e 1 h a s d ecreased.
The change i n P Tttsburghls unemployment r a t e r e s u l t s i n a
g r e a t impact on t h e c i t y l s economy.

It f aced a 3.5% i n c r e a s e

i n unemployment from 1974 t o 1 975as compared t o New York C i t y l s
n et i n c r ea s e of 4.6%.

Although P i t t s b u r g h l s n e t

r ise

o f un-

employment i s m o t as e xcessive as t hat o f New York, i t c an : nbt
.

b e overlooked.

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~ i n c e i s i n g ~ n e & ~ l o y m b* k l l i n e v i t a b l y a f f.. .q c t
r
nt
.

.

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:

income a s a l e s t a x r e c i e p t s , c hanges'in unemplojment c an b ey'-.
nd
., .
...
..,

.,

. ,,

T .,

i ~ s e dt o measure t h e o v e r a l l m agnitude o f d e c l i n e i n t h e c i t y t s

t ax b ase.
THE CURRENT SITUATION.

The p reviously mentioned m a t t e r s concerning population,
u nemplopent, and %he p overty p opulatt.cn a r e a L l f a c t o r s t h a t
c o n t r i b u t e t o t h e c i t y l s d e f i c i t i n r evenue base.

This d e f i c it

v as b rought a bout by unforeseen m ajor c utbacks i n v i t a l f e d e r a l
f unds, u n r e l e n t i n g i n f l a t i o n and i n c r e a s e s i n mandated government costs.

The d e f i c i t can be a t t r i b r i t e d t o two a d d i t i o n a l

f a c t o r s - a $12.6 m i l l i o n d ecrease i n a v a i l a b l e funds f o r t h e
coming year a s compared t o those a v a il a b l e f o r t h e c u r r e n t
year and $16.3 m illioh. i n increased c o s t s f o r 1 979(3).

As a

m atter o f f a c t , e xpenditures f o r t h e c i t y pension plans h ave
; increased d ramatical1y;city govesnment expenses increased 80%
i n t he p a s t t e n y ears

(4).

F ollowing t h i s , c o n t r i b u t i o n s t o t h e v a r i o u s p ension funds
and s everancepay i ncreased from $2.8 m i l l i o n i n 1968 t o $11.6
m i l l i o n f o r 1979,

@"

.h us,the
(

f unding o f p ension p l a n s must be

considered an important i tem i n t h e c i t y t s b udget ( 5).

o ver, i n 1979 t h e money a l l o c a t e d f o r pension plans c o n s t i t u t e d
16% of t h e c i t y ' s t o t a l expenditures ( 6).

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