The Challenge: Tax Reform and Public Support of Assets
In the early 1990s, the City of Pittsburgh found itself providing a disproportionate amount of funding for the region’s arts, cultural and recreational activities. At the same time, leaders saw the need to move away from property tax as the main source of funding municipal and county functions, and to provide a local tax relief program for low income senior citizens.
The Solution: A Model of Regional Cooperation
In 1991, the Pittsburgh mayor asked the Allegheny Conference on Community Development to address the issue of funding for area recreational facilities, cultural institutions and libraries. In response, the Conference proposed a legislative effort to stabilize funding for the regional assets, correct funding inequities, reduce reliance on property taxes and establish a precedent for regional cooperation.
With bi-partisan support, the legislature in 1993 approved creation of the first regional mechanism—the Allegheny Regional Asset District—to address tax reform and to stabilize funding for important regional institutions, or “assets.”
Its sole source of funding is a 1 percent sales tax. The Allegheny Regional Asset District Board awards grants from one-half of the proceeds of the funds collected. The other half of the tax proceeds go directly to county and municipal governments. It is estimated that 25 percent of the collected tax comes from individuals outside Allegheny County who come to work, shop and use the regional assets funded by the tax. The tax is easy to collect and administer because it is an add-on to the existing state sales tax.
There are currently seven states that have adopted legislation authorizing the use of special tax districts. St. Louis, MO, established the first such in 1969, using its funds to support the art museum, the zoo and the museum of science. In Denver, CO, the Scientific and Cultural Facilities District also supports arts and culture, the zoo, botanic
gardens and others.
The Allegheny Regional Asset District is a unique national model of combining tax relief, support for regional assets, and funding for municipal expenses. The creation of the District provided a Countywide vehicle for county/city cooperation and ended attempts to shift asset funding responsibilities from one level of government to another. The District gives a way for providing public support that is fair and equitable.