Why Jack Wagner?

By Dan Sullivan

My Friends Want to Know

My friends have seen the Jack Wagner signs on my recumbent bicycle, and have been asking why I am supporting him. Isn't Bill Peduto much more liberal? Isn't Wagner the machine candidate? Isn't Peduto more forward-looking? The short answer is, perhaps on a superficial level, but on a deeper level, I have found Wagner to be far more courageous, and far more dedicated to putting the well-being of the city ahead of his own popularity. I have also learned that there is more than one machine, and that the corporate-welfare machine is far worse than the Democratic Party machine that we elect. (Yes, every four years you elect a committee man and a committee woman for your voting district.) No candidate in the race got the endorsement, but it is generally conceded that Wagner would have got it had the current slate been in the race at endorsement time.

Something I Care Deeply About

The longer answer requires some explanation, and I am making it mostly for the benefit of those who know me personally. This is not just another race for me. It ties to several things I care deeply about, things I have dedicated my life to, and things that could change this city in very fundamental ways. I am including links for those who want to know more about the issues to which I refer. If you want to focus on a particular part of this letter, click on that topic in the left column.

Wagner Replaced Wage Tax with Land Value Tax

As many of you know, I have long been an advocate of land value tax, which has played an important role in helping this city. In the 1980s, Pittsburgh was losing young people at an alarming rate. The University of Pittsburgh and Carnegie-Mellon were drawing them in, but they were not staying, and neither were those who had been born here. The Masloff administration surveyed people who had moved away, and found that their number one reason was the city's 4% wage tax. Masloff proposed to replace wage tax with conventional property tax and got forceful resistance. Wagner showed how land value tax was not only kinder to home owners, and especially retired home owners, but was good for compact economic growth. He led the shift from wage tax to land value tax.

Calmly taking the heat

As you can see from my video of the 1990 tax hearing, Wagner and Masloff got a lot of flack from angry senior citizens who railed against any increase in real estate taxes, backed up by some of the most powerful real estate interests in the city. Pressure was so intense that Councilwoman Michelle Madoff tried to illegally adjourn the state-mandated public hearing. Wagner calmly and courageously took the heat and championed his reform. I can't stress enough how rare it is for a politician to stand up to an angry public and powerful interests at the same time in order to do what must be done for the good of the city.

Wagner Reversed the Outflow of Young People

The outflow of young people had been increasing every year since Caliguiri started increasing wage tax in 1978. The very first year Wagner cut the wage tax, the rate of outflow began to fall, and continued falling until 2000, when more young people moved into the city than moved out for the first time in two decades. Since then, the influx of young people has continued to increase. Other factors have a lot to do with keeping them here, but it is clear that the wage tax Wagner shifted onto land values had been driving them away. No revenue was lost in Wagner's tax shift. Ironically, the young people that are here because of Wagner's actions were not around at the time, and many are voting for his opponent. (No good deed goes unpunished.)

Helped Prevent Real Estate Bubble

Pittsburgh is one of very few cities whose real estate prices actually increased during the "Great Recession." The tax on land values had discouraged speculation during the 1990s boom, keeping housing affordable. Pittsburgh has had a land value tax since 1913, and since then has missed every housing bubble that has plagued so many other cities. In general, the higher the tax on real estate, the milder the bubbles, but taxing land values alone discourages idle speculation far better than property tax does.

Maintaining a Cooperative Spirit

I have worked with many elected officials who supported land value tax in Western Pennsylvania, but I generally have not campaigned for them. However, two have stood head and shoulders above the rest: Bill Coyne and Jack Wagner. Coyne was able to prevent some of the proposed wage tax hikes in the late '70s and early '80s, or else we might have had nearly a 5% rate like Philadelphia. The story that is important to me, though, is how they sold the idea to others. Neither one grandstanded, neither one vilified opponents, and neither one tried to take credit. They both quietly and methodically reasoned with other council members, and even with interest groups whom they knew would oppose the shift. Both were president of City Council when they did this, and both worked diligently and effectively to make council meetings decorous and productive. Indeed, both had the votes to pass much larger shifts, which they demonstrated in the preliminary vote, and then both of them compromised and got nearly unanimous support. They didn't have to do this, but winning at the expense of others is not the Coyne or Wagner way. Rather, they sought consensus and a spirit of cooperation. The rancor we have seen in recent years was much less common under their tenures. When I asked Wagner why he wouldn't run attack ads (and offered him plenty of ammunition), he said, "You can't do the job right if you make enemies trying to get the job."

Leading the Leaders

There is a natural desire for public adulation and celebrity status, but there is also something superficial about it. To be admired by people who do not really know you is not as genuine as to be appreciated by those who do. Coyne and Wagner established their reputations with civic, community and business leaders, as well as with fellow politicians, and those leaders have let the public know how effective these council members had been. This worked well for Coyne, but times have changed, and people are so out of touch with community leadership that they are more easily swayed by credit-grabbing, grandstanding, pandering, attack ads, and blather from the blogosphere. That is why I am afraid Wagner might not win.

Phony Crony Baloney

The people who have endorsed Wagner have been called his "cronies," a charge that is plausible to people who haven't been paying attention, but ridiculous to those who know what is going on. Jack has been endorsed by people who are arch-rivals of one another, and by people who have pretty much stayed out of politics for years. It is disingenuous to write these people off as cronies.

The Bill Coyne Endorsement

When Bill Coyne entered Congress, he made a point of staying out of local politics. I had asked him to endorse a shift from building tax to land value tax shortly thereafter, and he declined. He said, "I don't want to use my power and prestige as a Congressman to tell local officials how to do their jobs." Anyone can tell you that, as Congressman, Coyne listened to local leaders but did not give them unsolicited advice. To the contrary, many Democrats asked why they weren't hearing much from Coyne, whom they considered a great leader of the party. Even after his retirement from Congress, he took no lobbying job and limited his political involvement. Many have asked for his endorsement, and very few have received it. The suggestion that Coyne is anybody's "crony" is ludicrous.

The Job Coyne Refused

When it was learned that mayor Caliguiri had an incurable disease and would not be seeking re-election, I asked Bill Coyne if he would run for mayor, knowing that he could easily win the position. He scowled slightly and said, "You couldn't give me that job." Coyne had worked closely with mayor Caliguiri, and knew very well that it takes a tough-minded, decisive person who to stand up to the constant pressure and demands. Coyne says Jack Wagner is that person, and I agree.

The Sophie Masloff Endorsement

When I was trying to get council support for land value tax, I got wonderful advice from Richard Meritzer, who was then an assistant to one of the council members. He gave me a rundown on each council member's interests and concerns, style of thinking, attitudes, etcetera. When he got to Sophie Masloff, he said, "Sophie is the one council member who wants to know if it's the right thing to do. She will also want to know how it will affect Squirrel Hill, but her first concern is whether it is right." Sophie has also been out of office for a long time and has no interests that would be served by being anybody's "crony." The fact is that, when she was mayor, Wagner supported her on some issues and opposed her on others, but always in a courteous and professional way. Her finance director, Ben Hayllar, was furious that Wagner's land value tax displaced his proposal for property tax, but Masloff and Wagner both rose above such things.

The Michael Lamb Endorsement

There is a decent argument that Wagner and Lamb are at least allies, as they come from the same part of the city, and I believe Wagner had supported Lamb's run for City Controller. Still, the fact is that Wagner knocked Lamb out of the race, as Lamb's funding dried up after Wagner entered.On the other hand, there is no shame in having someone like Lamb for a "crony." Lamb is highly regarded for his quiet, methodical professionalism, and for saving the city from Ravenstahl's disastrous scheme to privatize the parking authority.

The Luke Ravenstahl Non-Endorsement

Luke Ravenstahl never endorsed Wagner, but it is clear that he is among the people who strongly dislike Peduto. The negative ad he ran against Peduto after he dropped out of the race was actually made while he was still in the race. To my way of thinking, it was poorly executed but accurate. Peduto even got part of Shadyside declared "blighted" so Giant Eagle could get special tax breaks to build its Market District and condo complex. That is money that could have gone to a poorer neighborhood, and every neighborhood is poorer than Shadyside. Of course nobody will bring that up directly, because nobody wants to cross Giant Eagle, one of the most powerful and politically involved business interests in the city.

Peduto Helped Make Ravenstahl Mayor

The best thing Luke Ravenstahl could do to hurt Peduto is thank him for helping make Ravenstahl mayor in the first place. Pittsburgh'sdysfunctional council was deadlocked 4-4, and nobody in one camp would accept a council president from the other camp. This severe partisanship on city council led them to put a 25-year-old into the council presidency, making him mayor when Bob O'Connor passed a way shortly thereafter. Had Peduto (or anyone else) been willing to break the partisanship and support anyone from the other camp, we would not have had such a young, inexperienced mayor.

The Darlene Harris Endorsement

When Council President Darlene Harris endorsed Wagner, it sounded more like dissatisfaction with Peduto, with whom she had served, than admiration for Wagner. Frankly, as I don't know what happened behind the scenes and don't follow every council meeting. My own observation from what I have seen is that Harris is not a very polished speaker, but takes pains to do the right thing as she sees it, with little regard to political consequences. Peduto is bright, articulate and very polished, but takes on an issue when it is clearly in his interest to do so, and makes symbolic gestures that have little substance behind them.

Nit Picky Ricky Burgess

Councilman Ricky Burgess constantly complains about Peduto and a few other council members. Burgess also seems to be allied with Ravenstahl. When he is not "carrying water" for Ravenstahl, I often find myself agreeing with Burgess on the issue. However, his harping on every little thing, his making things personal, and his inability to let go and move on when he has clearly lost the battle often makes him look worse than it makes Peduto look. This is a minus for Peduto, but not a big one.

The FOP Endorsement

Frankly, the endorsement by the Fraternal Order of Police gives me pause. I was arrested during the G-20 protest, and I was not even a demonstrator. I think our police need a firm mayor who will restore order. On the other hand, they do not need an adversarial mayor so much as one who will support their legitimate grievances even as he imposes higher standards. I think Wagner would be effective in that regard, and I hope he will rise to the occasion. On the other hand, I think Peduto will rise to the occasion, but I am skeptical that he will be effective.

Firemen vs. Paramedics

The Fireman's Union endorsed Wagner and the Paramedics endorsed Peduto. These two unions have long been rivals for shares of the city budget, which is unfortunate, as they are both woefully under-funded. I was once injured on a motorcycle on Brownsville road, and they dispatched an ambulance from Homewood, which was about as far away as one could get and still be in the city. Fortunately I was not seriously injured and told them to cancel the call. On the other hand, I shudder to think what would have happened if we had today's emaciated fire department during the 1963 race riots that set the Hill District ablaze.

The Corporate-Welfare Machine

We hear a lot about "the machine," meaning city employees, I suppose, but the Democratic Party organization, whatever their faults, is at least elected. Every voting district elects a committee man and a committee woman. Their perspective is biased, to be sure, but they are geographically spread throughout the city and generally interested in the city's well-being. When they don't determine the outcome of the election, it is determined by big money. I wrote about this a few years ago on a page called "The Importance of a Healthy Committee System."

I have also been an opponent of corporate welfare. I composed the "No Stadium Tax" brochures and wrote the check for the "No Stadium Tax" signs. I testified against subsidizing the Home Depot that was followed by the closing of 17 hardware stores, two paint stores, a carpet store, a plumbing supply store and an electrical supply store going out of business, and against the subsidy for Giant Eagle in "blighted" Shadyside while that chain was closing down grocery stores in neighborhoods that actually were blighted. Peduto voted for all of these, but, to be fair, so did many other council members. On the other hand, Peduto fought for the blighted designation and the Giant Eagle subsidy. When I confronted him on this personally, he said, "I held out as long as I could." That makes me think he was responding to pressure, not to reason.

The Shadyside Perspective

Peduto is shaped by decades of representing Shadyside and parts of Oakland and Squirrel Hill. Shadyside is the richest neighborhood in the city, followed by Squirrel Hill and Oakland. Rich Fitzgerald, our county executive, represented essentially the same territory when he served on county council. Shadyside politics reminds me of Tolstoy's comment that rich liberals"will do anything to help the poor except get off their backs. " They talk a good game, but supported stealing development money from the poor so they could have a deluxe grocery store. They screamed bloody murder when their assessments went up, even though they were still the most under-assessed neighborhood in the city even after reassessment. They are also the only three neighborhoods where the majority voted in favor of a sales tax (which falls on the poor) to build stadiums (to entertain the rich).

Peduto even claimed that Shadyside's parks and green spaces "could be a model for the whole city. Really? Never mind that Shadyside's parkland was donated by the Mellon family that lived there before they bought a third of Westmoreland County. Never mind that many neighborhoods would have to tear down people's homes to get land for green space. Never mind that parks in some poor neighborhoods are places where drug deals are made and shootings occur.

It is possible that Peduto will rise above his Shadyside perspective and represent the whole city, but Fitzgerald continued to fight against honest assessments, which means that, if you live in a more typical city neighborhood, you are paying your taxes and a part of Shadyside's taxes as well.

My Own Personal Perspective

When I worked on tax issues with Wagner, he asked tough questions and demanded hard data. He never made me think he was worried about how this would affect his political career, but only whether it was right for the city. He didn't confide in me much, so I provided him the information he requested and had to hope he would do the right thing with it. Bill Coyne was the same way. Still, Wagner came through, never embracing the ideology behind land value tax, but simply analyzing it the way an engineer would analyze a design: Either it works or it doesn't. Coyne took a similar approach a decade earlier. The fact that Coyne was an accountant and Wagner was a safety engineer might have had a lot to do with this no-nonsense approach. Wagner's marine training also make him a bit cold and off-putting at times, but it added to his decisiveness and his leadership skills. Generally, I'm not a fan of the miltary or what it does to people, but it seems to havemade him more effective. I'd rather party with Peduto, but I'd rather Wagner have my back.

There are social issues on which Peduto is more liberal, such as gay rights and abortion, but he represents the most socially liberal neighborhood in the city. You don't get extra points for that in Shadyside; it is a minimum requirement.

Another Tom Murphy?

My greatest fear is that Bill Peduto will be another Tom Murphy. Murphy was a great campaigner, a great talker, a social liberal, and a guy with big ideas for parks and greenways and bike trails and other nifty trendy things. Yet once he got in he was for subsidizing a Heinz expansion and taking the land by eminent domain, subsiding a baseball park so McClatchy could walk away with a huge profit and leave the Pirates in a shambles, subsidizing a stadium for the Steelers, subsidizing a hockey arena for the Penguins, a casino in the North Side that North Side orgnizations unanimously opposed, spending $40 million on $10 million worth of land in the South Side because he thought we could build a casino there, then pouring massive subsidies into a yuppie retail complex in this very blue-collar neighborhood, trying to take a wrecking ball to blocks of Fifth and Forbes Avenues so he could subsidize a nearly bankrupt Nordstroms, and finally, municipal bankruptcy and a major funding crisis.

When I was explaining land value tax to Philadelphia's city council, someone asked why, if it was so great, was Pittsburgh in such bad shape financially? Councilman Michael Nutter (who is now Philadelphia's mayor) replied, "As I understand it, the mayor [Murphy] took the city and flew it into the side of a mountain."

I don't see Wagner taking as hard a line against corporate welfare as I take, but I do see him doing the math and making sure the return is there for the city and not just for the corporate-welfare machine. I see Peduto saying, "I held out as long as I could" when challenged on something he actually championed.

And that is why I am supporting Jack Wagner.