Frequently Asked Questions
- What is the Allegheny Regional Asset District and how did it come about?
- Why was a "District" needed – we already have a county government and lots of local governments?
- How is the District funded?
- Does all of the money go to preserving these regional assets?
- How is the money divided among the municipalities?
- What can the County and municipalities do with their funding?
- Why was the sales tax selected to fund the District?
- Who decides how the "asset" half of the pot is distributed?
- What exactly is a regional asset?
- How does the Board of Directors make its funding decisions?
- How were the funds distributed for this year?
- What happens if the sales tax does not produce the expected amount of revenue?
- Isn't the District going to have a large administrative cost to handle these funds?
- Act 77 requires the District to assist in the development and expansion of minority and women business enterprises. How does it do this?
- These "assets" sound like places and programs that appeal only to certain people. What does the District do for others?
- Are there other “asset districts” in the country?
- I would like to get more information. How can I do this?
What is the Allegheny Regional Asset District and how did it come about?
The Allegheny Regional Asset District (RAD) is a special purpose area-wide unit of local government which was authorized by an act of the Pennsylvania Legislature (Act 77 of 1993). The geography of the District is the same as Allegheny County.
Why was a "district" needed – we already have a County government and lots of local governments?
For years, elected officials and community leaders searched for solutions to two vexing public problems:
the needs to move away from real estate 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 need to preserve recreational and cultural institutions and libraries important to our families and our economy without burdening any one municipality or the county government. Most of these institutions faced a decrease or elimination of local support because of other demands on government budgets.
- Many years of debate about which level of government should support which function and how taxes should be divided preceded the formation of the Allegheny Regional Asset District. With bi-partisan support, the legislature approved creating the first regional mechanism — the Regional Asset District — to address tax reform and stabilize funding for important regional institutions or "assets."
How is the District funded?
Act 77 provides for the enactment of a 1% county sales tax collected by the State Department of Revenue under the same rules as the state sales tax. The County Commissioners levied the tax and created the District in March of 1994. Every municipal government in Allegheny County voted to participate in the benefits of the new tax. The District itself does not have taxing power and the County government cannot increase the tax under existing law.
Does all of the money go to preserving these regional assets?
No. Twenty-five per cent of the funds go directly to the county government and 25% goes to the other municipal governments. The other half goes toward the preservation of the regional assets.
How is the money divided among the municipalities?
The Legislature specified a distribution formula in the Act which provides funding for all municipalities that elect to participate but provides special consideration for the poorest and most distressed communities in the County.
What can the County and municipalities do with their funding?
In the initial year of implementation (1995), the Act required the County government to use all of its money to eliminate the personal property tax, reduce real estate taxes and fund a low income senior citizen tax relief program.
The City of Pittsburgh was required by the Act to eliminate the personal property tax, to reduce its amusement tax and to fund a senior citizen tax relief program.
The Act required municipal governments to use two-thirds of the funds they receive to reduce taxes. After the initial year, municipal governments must use 25% of any increase they receive to fund regional projects and/or their councils of governments which undertake cost-saving municipal cooperation projects. The balance of funds can be used to support any type of municipal function such as road repair and public safety.
Why was the sales tax selected to fund the District?
Act 77 was a tax reform proposal and, as such, involved a decision about which taxes make sense for our community given its economy and the decision to support regional assets. The sales tax had particular appeal in Allegheny County for several reasons:
- Local sales taxes are common throughout the United States. In fact, they exist in thirty states and some 7,000 jurisdictions have the right to levy such a tax.
- It has been estimated that 25% of the sales will be paid by persons from outside of Allegheny County — visitors, tourists, etc. Through the District, outsiders to the community now contribute substantially to supporting this area's valuable regional assets. This is revenue the District would otherwise not have.
- Pennsylvania provides a number of exemptions from the sales tax—food, clothing, medicines—so that the "effective" rate of the sales tax in Pennsylvania is less that the actual rate.
- Moving to a sales tax and collecting it through an established system minimizes the costs of collection, enforcement and audit. It also removes the costs of collecting taxes like the personal property tax which Act 77 eliminated.
Who decides how the "asset" half of the fund is distributed?
The fund is administered by the RAD Board of Directors, a nonpolitical Board comprised of seven persons, four appointed by the County Chief Executive, two by the Mayor of Pittsburgh and one elected "at-large" by those six from lists of nominations provided by the development community. The members may serve during the terms of those who appointed them except for the at-large member who serves for two years. The Governor can also appoint one non-voting Board member.
In addition, the Act requires the Board of Directors to appoint a twenty-seven member Advisory Board to assist and to advise the Board on the development of policy and program implementation.
What exactly is a regional asset?
The governing Act specifically cites civic, recreational, libraries, cultural entities and sports facilities as regional assets. It allows the District Board to consider other entities as regional assets as times change and funds are available. The law specifically prohibits funding health care, educational institutions or small parks.
How does the Board of Directors make its funding decisions?
Regional assets are required to submit funding requests each year. The District coordinates its funding decisions with planning for the preservation and enhancement of the assets. All of the decisions of the Board are made at public meetings since the activities of the District are governed by Pennsylvania's “Sunshine” Law. Funding decisions require six of seven Board members to agree.
How were the funds distributed this year?
Grant allocations for this year can be found on our web site in the “How RAD Works” section.
What happens if the sales tax does not produce the expected amount of revenue?
The District's contracts with assets provide for a reduction in funding if the tax fails to produce the amount estimated. In addition, a reserve for emergency and cash flow problems was established with the initial first four months of collection.
Isn't the District going to have a large administrative cost to handle these funds?
No. Act 77 limits the administrative costs to no more than 1% of the total District tax revenue.
Act 77 requires the District to assist in the development and expansion of minority and women business enterprises. How does it do this?
The Board has adopted an Access and Opportunity Policy stating that District staff and funded assets should provide these businesses with opportunities to participate in bidding and proposing on purchases and projects. The policy also provides for the District to support organizations and programs that provide technical assistance in this area. Funding for the program comes from the District's administrative budget.
These "assets" sound like places and programs that appeal only to certain people. What does the District do for others?
It is important to remember that historically, nearly 60% of the funding allocated by the District goes to library services, and parks and trails—assets which are widely enjoyed by people throughout the County and generally at no charge. The Board has also expanded its allocations to organizations that provide a wide range of cultural and recreational experiences all over the county. The sales tax has also relieved property taxes of substantial burden.
The District Board set service to young people as a grant priority, particularly to those in underserved areas. As a result, many of the assets have special outreach programs, scholarships and free events designed to bring cultural experiences to everyone.
Estimates are that the assets serve as many as 10 million residents and visitors a year. They are economic generators in their own right supported by hundreds of citizen Board members and volunteers. In most cases, the public support received is only a small portion of the funds needed to operate the asset, making the program a truly public private partnership.
Are there other “asset Districts” in the country?
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.
But the Allegheny County 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. RAD is a way for providing public support that is fair and equitable.
Where can I get more information?
Please contact the District office at:
The Allegheny Regional Asset District
425 Sixth Avenue
Pittsburgh, PA 15219
TT Assistance 1-800-654-5984