Morning Must Reads: Good news in Pittsburgh and Chester County, Not So Much In Scranton

Since it is spring, how about some good news for a change! The budget gap faced by the Pittsburgh School District is smaller than expected thanks to unexpected revenue growth and a mild winter.

Another good sign for the region is the news that hotel occupancy in the greater Pittsburgh region is near a peak. Of course, with demand up, this should lure capital into the region to build new hotels. And yet as I noted, a developer has come hat in hand to the City of Pittsburgh to ask for tax expenditures to finance its development.

In good news for Chester County, it looks like the owner of Tastykake will be expanding its Pennsylvania presence.

In less than happy news, Auditor General Jack Wagner has released an audit of the Scranton City School District. The audit uncovered $3 million in over payments to the school district's private bus contractors. Subscribers to the Times-Tribune can read about it here. Here is the link to the audit

Last week, we released a study of spending on student transportation services that found higher costs for districts that rely on private contractors. As we noted, one of the reasons costs are higher for private contractors is because there is a lack of competition between private bus contractors. Of course, you don't just need multiple bidders; you also need a contracting school district to actively solicit bids from outside contractors. Thus, the following recommendation from the Auditor General:

While bidding of pupil transportation service is not required under state law, competitive bidding can result in a lower cost to District taxpayers. Since DE [the Department of Education] provides a state allowance, it would be prudent for the District to consider a better alternative in spending taxpayer monies. The Scranton City School District should: 1. Consider bidding transportation contracts to determine if taxpayers would benefit from a more favorable contract for the District.

So once again, it is important not to assume that privatization lowers costs.

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