resource: asset district funds
This is the fifth in a series of articles taking a closer look at ''Plan B,'' the financing mechanism proposed by Pittsburgh and Allegheny County officials to pay for new baseball and football stadiums and the expansion of the David L. Lawrence Convention Center.
Today's installment looks at RAD funding for Plan B and how it would affect RAD funding of cultural institutions.
City and county officials have proposed tapping the Regional Asset District budget for $13.4 million each year for at least 20 years, beginning in 2000, as part of a $26 million pot of local funds to make annual debt-service payments on the local bonds.
By Patricia Lowry, Post-Gazette Staff Writer
The Allegheny Regional Asset District Board provides major funding for Allegheny County's regional parks, libraries, arenas and cultural facilities. Its 1998 budget of $63,997,950 includes allocations to 84 cultural and regional assets, the largest number funded in the four-year history of the Regional Asset District board. The board distributes the money generated by the additional 1 percent that Allegheny County residents pay on top of the state's 6 percent sales tax.
Does the RAD board get the whole 1 percent?
No, it gets half of 1 percent. Allegheny County gets 25 percent and the other 25 percent is divided among municipalities.
Who gets the most RAD money?
The largest single grant for 1998 is $13.7 million for the Carnegie Library of Pittsburgh. The library system is one of 10 large entities with which the RAD board has 10-year contracts that expire in 2004. The others are Three Rivers Stadium, the Pittsburgh Zoo, the National Aviary, Phipps Conservatory, the city for four large parks, the county for nine large parks, Carnegie Museum, the Allegheny County Library Association and the city of McKeesport for Renziehausen Park.
How much does Three Rivers Stadium get?
The Stadium Authority gets $10 million, which it uses to pay the operating costs of the stadium, including debt service on bonds. Under Plan B, the debt service would be retired with initial funding, so all the RAD money would go to the new projects.
Some news reports say Plan B will get $13 million in RAD funds; others say $15 million. Why the discrepancy?
The city and county are requesting $13.4 million, but the state charges a fee -- thought to have been $1.6 million, but actually less than $1 million -- for collecting this amount of tax. Early in the planning process, the city and the county were thinking of asking the state to waive this fee, and if it had, the money available would have increased to almost $15 million. In the final Plan B budget, however, $13.4 million was sufficient.
Where will the $13.4 million come from for Plan B?
It will include the $10 million already contracted to the Stadium Authority. The other $3.4 million would come from anticipated growth in revenue.
Has the RAD budget been increasing, and if so, why?
In 1995, the first full year of its existence, the RAD spent $53 million. Spending increased to $56.8 million in 1996 and then to $66.7 million for 1997. It's grown partly because the yield from the sales tax has increased because of increased sales of goods and higher prices. It's also grown because of increased compliance, but that type of growth is expected to level off.
If the fund is growing, why is this year's budget of $63.9 million less than last year's budget?
The yield for the sales tax is expected to decrease because the state has exempted computer consulting services, which had been taxable, as well as some other minor services. The budget decreased, too, because this year the RAD board is using less of its reserve fund than it did last year. Since 1997, the reserve has been tapped to help institutions with capital projects or fiscal emergencies -- $1.2 million this year, $2.7 million last year.
How much is in the reserve?
At the end of 1997, the amount in the reserve was $16.2 million. By the end of 1998, it will be $15.6 million.
Are there projections for how much the RAD fund might grow in the future?
The RAD board uses a model that shows a 2 percent annual growth rate. It's a conservative model that allows for economic slowdowns.
Will any of the cultural institutions get less money in the future because of RAD funding for Plan B?
Based on projected income, the RAD board does not expect to decrease its funding levels to cultural institutions because of Plan B funding. Some groups may get more or less money than they currently receive, because funding decisions are made annually, but that would be for reasons unrelated to Plan B.
Is RAD funding for Plan B a sure thing?
Nothing's a sure thing, but consider this: Mayor Murphy and Commissioners Bob Cranmer and Mike Dawida appoint the seven RAD board members. It takes six of seven votes to authorize spending. If Murphy, Cranmer and Dawida make a good case for funding -- and there's no reason to think they won't -- expect it to be approved.