The Pittsburgh City Council started the 2012 budget process on Tuesday with an overview from City Council Budget Director Bill Urbanic. Mayor Luke Ravenstahl's $467 million budget doesn't include any tax hikes or layoffs, but does propose borrowing $80 million over the next two years for capital improvements. Urbanic said that this is the largest bond allocation in Pittsburgh's history. Many council members expressed concern about that proposal.
"When you're looking at borrowing the largest amount in the city's history, you really want to know what it's going to go to — specifically what it's going to go to, not generalities," said councilman Bill Peduto.
He said that the Ravenstahl administration has done a good job of pushing the budget in the community, promising all sorts of things, from senior centers to pool repairs or street paving, which Peduto said means that the community then pushes the City Council to pass the budget and borrow the money.
"But just borrowing the money means that in the future, in as few as three or four years, there won't be money to pave the streets or to buy police cars to protect their neighborhood," said Peduto.
Several other council members agreed, though Councilman Patrick Dowd said that borrowing should be part of a larger budget plan. "Borrowing we're going to have to do, but I think we're also going to have to compliment that with a series of short, small tax increases, and those tax increases need to be dedicated directly to certain types of spending," said Dowd.
The city's debt payments have been trimmed by $20 million annually, and it has not incurred any additional debt for the past 5 years. Council members worried that borrowing $80 million would result in the city ending up in the same hole they're currently trying to dig it out of.
Bill Peduto said that the bond proposal is one of two main priorities of the 2012 budget. The other is examining a plan that would save city pensions by using a one-time revenue source. He said that the budget needs to look ahead and figure out a solution for the long-term health of the pension system.
For the next several weeks, city department heads will talk to the council about their specific budget needs. The council has until December 31 to pass the mayor's budget or make changes.