After 14 Years Of Financial Distress, Peduto Asks State To Rescind Pittsburgh's Act 47 Label

Nov 13, 2017

During his yearly budget address Monday, Mayor Bill Peduto said the city has been diligent about fiscal responsibility and is ready to retake control of its finances. 

Peduto said he's asking the Pennsylvania Department of Community and Economic Development to remove Pittsburgh from Act 47 and shed its 'financially distressed' status.

Act 47 is a state program that gives economically struggling cities strong financial oversight. Since its passage in the 1980s, the distinction has helped bring 13 cities out of poor economic status. Pittsburgh entered into Act 47 in 2003 because it was operating under a debt burden of more than 20 percent of its operating budget.

In his address, Peduto credited remaining city employees with sticking through difficult economic times. Since entering into Act 47, the city has decreased the size of its workforce by 26 percent, according to the mayor.

"Just a few years ago, Pittsburgh faced an uncertain financial future," Peduto said. "Thanks to the hard work of city employees and collaborations with City Council, the 2018 budget continues a path towards long term financial stability."

As a councilman, Peduto supported entering Act 47. He's since asked City Council to cement some of the fiscal reforms enforced by the state's oversight program, including prohibiting pension increases and requiring a minimum 10 percent fund balance.

"If we're able to leave Act 47 at the consent of the Governor and DCED, but we don't have these reforms passed by City Council in part of city code, we'll go back to the practices of the past," Peduto said. "And we will not be able to guarantee the people of Pittsburgh financial stability for the future."

Earlier this year, the Pittsburgh Fraternal Order of Police took the city to court to debate a lack of adequate raises for, as they say, an already underpaid workforce. The Commonwealth Court sided with the city, with Peduto saying the existing contract between the city and police complied with Act 47 regulations.

In addition to discussing Act 47, Peduto has called on UPMC, Highmark, Carnegie Mellon University and the University of Pittsburgh to contribute more financially to the city to it can move forward with projects including affordable housing, pre-K education and safe water initiatives.

"We're investing in what we believe to be the core issues of our city and we're asking our partners to do the same," Peduto said.

In emailed statements, UPMC, Highmark and the University of Pittsburgh all emphasized existing partnerships with the city and expressed willingness to do more. 

Carnegie Mellon University did not immediately respond to a request for comment.