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Major group supports new Allegheny County taxes

| Friday, Nov. 2, 2007

One of the region's largest economic development groups Thursday backed Allegheny County Chief Executive Dan Onorato's plan to enact two taxes to fill a $30 million budget gap.

The Allegheny Conference on Community Development's endorsement -- which came during County Council's first day of budget hearings -- has one catch. It said the county cannot give the Port Authority revenue from the drink and rental car taxes until the cash-strapped transit agency's union employees agree to wage restructuring and the same health care benefits imposed this year on management and nonunion workers.

"Over the past year, the Port Authority has taken meaningful steps to improve operations and control costs," said Ken Zapinski, the conference's senior vice president for transportation and infrastructure. "Those reforms have not yet gone far enough and further serious changes are necessary to keep the Port Authority from further deteriorating."

Pat McMahon, who heads the union that represents roughly 2,200 current and 2,600 retired Port Authority workers, criticized the comments.

"They take numbers, they twist them around and negotiate our contract," McMahon said last night. "Labor is sick and tired of these think tanks that think they know all the answers."

Zapinski was in the minority at the hearing as restaurateurs and businessmen slammed the proposed 10-percent drink tax as poisonous to county business.

"If this tax goes, it will have a dramatic effect on our industry," said Kevin Joyce, owner of The Carlton and board chairman of the Pennsylvania Restaurant Association. "This was a bad hand dealt to you ... It's not only devastating (to businesses), it's unconscionable."

"Don't impose the drink tax," said John Graf of the North Side/North Shore Chamber of Commerce. "Once that horse is out of the barn, it's not coming back."

No resident or business owner testified against the $2-per-day rental car tax.

Council members remained largely silent on the possibility of enacting the taxes, though County Council President Rich Fitzgerald, D-Squirrel Hill, got into a brief debate with Joyce over the budget alternatives.

"Everybody can say, 'I'm against the cuts, I'm against the drink tax (and) I'm against the property tax,'" Fitzgerald said later. "I hear people saying, 'The county's got to tighten its belt.' What have they been watching for the last 10 years, the last five years?"

The county's downsizing efforts were on full display yesterday as officials continued the process of searching for budget items to trim.

Onorato plans to lay off 200 employees Jan. 1, which will bring the county-funded work force to 5,284, County Manager Jim Flynn said. From January 1996 to January 2008, the county will have slashed 2,001 jobs -- a 27 percent reduction. Nearly half those cuts have come since 2000.

Flynn stressed that many costs are fixed in Onorato's $727 million budget proposal. In order to cut the entire budget by 5 percent, officials need to cut 17 percent from departments in a $210 million sliver of the budget, he said.

"This is probably the most difficult budget process I've been involved in," Flynn told County Council.

Hearings continue at 4 p.m. today in the County Courthouse, Downtown.

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