Pittsburgh City Council has ordered a public hearing on a proposal to put a ten percent tax on the cost of advertising on billboards.
Council chambers today entertained an animated discussion of the merits and drawbacks of such a tax with members apparently split on the issue.
The bill's sponsors, Council President Darlene Harris and Councilwoman Natalia Rudiak, said the tax would raise two to four million dollars each year. They said it's fair to tax billboards because their property tax burden is low, and because they said billboards can only earn money if the city maintains the roads on which they're situated.
However, Councilwoman Theresa Smith disagreed that advertisers should pay higher tax rates because they depend on city roads being well-paved.
"I know we're certainly not paving a road for Lamar [Advertising Company]," said Smith. "I know we're certainly not sending fire and EMS and others out to service a billboard."
Smith argued that Lamar creates jobs by constructing billboards, and maintains good relationships with neighborhoods. She said advertising companies would sue Pittsburgh over the legislation as well, creating legal fees for the city. It wouldn't be the first time Lamar sued the city; Pittsburgh won a lawsuit earlier this year over the city's restrictions on electronic billboards.
Rudiak said it's short-sighted to worry about legal fees from a possible court challenge to the bill.
"If there were to be litigation costs, that's short term. Long-term, we do need funding for police vehicles," said Rudiak. "I don't think that fear of corporate might and muster should prevent us from doing the right thing in any case."
Rudiak and Harris have said that the revenue from the proposed billboard tax would be put toward the yearly purchase of police vehicles. However, Councilman Ricky Burgess said the tax wouldn't work like that.
"To be honest with you, we are simply raising revenue," said Burgess. "There is no attachment to this revenue to any particular funding source. The sponsors would prefer it to go that way, but this Council would ultimately decide how those dollars are used."
But Harris responded that the money would go toward police cars even if it must go through the General Fund first.
"When budget time comes, sure, this will go into the General Fund," admitted Harris. "But the mayor will know and Council will know that we need these police cars, and we need two to three million dollars, and if [the tax is] in there, we'll have it."
Both Harris and Burgess agreed that the best solution for increasing city revenues would be to get larger voluntary payments from the city's nonprofit institutions, like universities and hospital systems.
The date for the public hearing on the billboard tax proposal had not yet been posted on Council's website at the time this story was published.