Allegheny Institute Studies Johnstown's Act 47

The Allegheny Institute For Public Policy says after 18 years of being under the control of act 47, Johnstown may be getting closer to bankruptcy than it is to being able to get out from under the provisions of the Act. Johnstown entered into act 47 in 1992 and is on its fourth amended recovery plan. The Institute looked at the city’s 2007 finances (the most recent DCED audited numbers) and then compared them to nine other similarly sized cities. Policy analyst Eric Montarti says Johnstown lead the way in many negative categories including low wage and real estate taxes, high employee count, high pension and debt costs and a heavy reliance on state and federal funding. State and federal funding accounted for a quarter of the city’s 2007 budget and Montarti wonders if the percentage grew with the addition of federal stimulus dollars. The only bright spot was Johnston’s low police department costs. The Institute launched the study when Johnstown passed a budget this year that cut the number of employee and raised property taxes. Montarti says at the time, the council noted that it was better to make those moves than to enter into chapter nine bankruptcy. Montarti says, “Johnstown is now in negotiations with its major unions on new labor contracts that might decide whether the Council's prognostication comes true.” He says he wonders why those higher personnel costs and legacy costs were not dealt with much sooner.
Montarti says this study may point to flaws in Act 47 or the way Act 47 coordinators approach their jobs. He says the coordinators must know their limitations and at some point admit, “we cannot solve this problem, we need to go to some sort of bankruptcy, debt reorganization, because what we have in terms of our tools just do not work.” Montarti says another problem may be the clash between powers given to municipal unions and the power of Act 47 coordinators. He says those unions do not have the ability to go on strike but they do have the right to binding arbitration and if the arbitrator does not heed the needs of the coordinators it may leave the municipalities in the same situation they where in when they entered Act 47. Very few of the municipalities that have entered Act 47 since it was enacted in 1987 have emerged. Montarti says maybe this report will serve as a wake-up call for coordinators to allow their municipalities to move into bankruptcy and alow a judge to right some of the problems they have not been able to address. “Something has to happen to right this financial ship, and soon,” says Montarti.
The full report is available at the Allegheny Institute's website.

John Murtha Laid To Rest

U.S.Representative John Murtha's funeral service was held Tuesday morning at Westmont Presbyterian Church just outside of Johnstown, Pennsylvania, his hometown. He represented the area since 1974.

Among those in the packed church were Former President Bill Clinton, White House Chief of Staff Rahm Emanuel and Speaker of the House Nancy Pelosi, who led a Congressional delegation of fifty. She spoke of his years of service, his support of veterans and scientific research and the twinkle in his eye. His daughter Donna Murtha delivered a tearful eulogy where she spoke of her father's love of family and his love of nature. Rev. Douglas Stevens said Murtha showed the same courage in his work as he did on the battlefield.

Murtha died on February 8 after complications from gallbladder surgery. He was 77 years old.

He was the head of the House appropriations defense committee, the first Vietnam veteran elected to Congress, the longest serving member of the House in Pennsylvania history. He was an outspoken critic of the Iraq war.

Johnstown Budget Goes to Wire

Johnstown council members decided last night to delay voting on a 2010 budget with the hope that some solution can be found to reduce a $1.5 million deficit. To close the gap the council is looking at increasing property taxes by 42%, cutting 17 jobs or some mix of those two options. 17 workers represent more that 10% of the city’s workforce. As many as seven police officers and seven parks employees could be among those losing their jobs. Acting City Manager Bruce Haselrig says during last night’s meeting representative from the police and fire fighter unions came forward and offered to talk about concessions. He says the city will meet with them as soon as possible. He says it is unclear what can be saved but he has heard that the fire fighters may be willing to give up their 3% raise. Council is expected to vote on a final budget Wednesday. Any budget must sit for ten days after being approved by the council for public review and a public hearing before a final vote is cast. The Act 47 team must also approve the deal. Haselrig says no mater what the final budget looks like, the citizens of Johnstown will feel the impact of the cuts and tax hikes. He says they will see services being cut and bigger property tax bills. He says seniors on fixed incomes may be the hardest hit.

Questions Raised at Defense Contractor Show

A Pennsylania defense contractor to whom Congressman John Murtha of Johnstown had directed millions of dollars in "earmarks," has been blocked from doing business with the Navy amid allegations of fraud. Word of the suspension came during Murtha's 19th annual defense contractor trade show in Johnstown. At a brief news conference, Murth rebuffed questions about the suspension of Kuchera Defense Systems. That Windber firm and its officials have contributed $60,000 to Murtha's campaigns and political action committee since 2002. When asked about Kuchera, Murtha responded "What do you think, I oversee these companies?"
Federal investigators raided the offices and homes of the comapany owners Ron and Bill Kuchera in January.
At today's trade show, Murtha announced that $110 million in defense contracts had been awarded to three area firms. C-T-C received 2 contracts totalling $66 million for a Marine Corps data program and for services to the Department of Defense; JWD Defense Systems got a $24 million contract to assemble military vehicles; and, Martin-Baker America received a $20 million dollar deal for ejection seats for the Air Force.