Every day in Pittsburgh money comes in and money goes out, paying for police, firefighters and street lights. Anything that’s visible, and some things that aren’t, all have a place in the city’s budget. At its core, a budget is simply an itemized rundown of likely income and expenses, the contents of which a committee will begin to hash out in August, and by December, City Council will take a final vote.
When talk turns to budgets, your personal finances tend to get dragged into the discussion. The U.S. Congress reliably coughs up a few chestnuts each term: “Every family in America understands the necessity of a balanced budget,” or, “I think it's something that people can easily understand and relate to. They've got to balance their own household budgets.”
But the average American family doesn’t annually owe $87,000,000 in debt service, which is what Pittsburgh paid in fiscal year 2017. Most families can’t count on a cool $545,000,000 coming in, either.
Government budgets differ from personal ones, said Sam Ashbaugh, Pittsburgh’s chief financial officer, but it’s still a pretty apt metaphor.
“We have to live within our means,” he said. “The principles are the same, it’s just on a different scale.”
Each year, the city’s home rule charter requires the creation of two budgets: operating and capital. They pay for different things, and depend on different revenue streams.
“The operating budget basically pays for all the day-to-day expenses of running a municipal government. Everything from salaries and benefits of city employees to office supplies,” said Ashbaugh.
Salaries, pensions and debt service make up the bulk of the city’s costs, and those expenses are paid for primarily with tax revenue.
“The capital budget, on the other hand, really pays for improvements to the city’s assets and infrastructure. Things that have a longer useful life than just one year, and benefit generations,” he said.
Jennifer Presutti, director of the office of management and budget, ran through a few examples.
“All of our segments of streets, steps, pools, parks, playgrounds. Let’s see, what else do we have? We have sidewalks, walls, facilities, bridges, ball fields ... our vehicles,” she said. “Oh! And we own the light poles. And lights. And traffic signals.”
It’s not an exhaustive list, by any means, but it’s indicative: Basically everything in the city can be traced back to its line item in the budget. The long life of those assets often means they carry high price tags, and are financed through the issuance of bonds.
The capital budget used to be just a bunch of spreadsheets, which made for a pretty sticky read. Now, there are narratives; it’s littered with pie charts, bar graphs. It’s important, said Ashbaugh.
“Taxpayers deserve to know not only how their funds are being spent but some background on it,” he said.
But it’s more than that, said Presutti: the capital budget gives residents a sense of what happens next.
“Instead of having one line item that says ‘park improvements,’ we now tell the taxpayer what parks we’re going to do, how much it’s going to cost, who’s the responsible party for that, the anticipated duration, and the funding used to pay for that park.”
Pittsburgh has been under Act 47, the state recovery plan for distressed municipalities, for so long that the city’s capital budget doesn’t have much room for fun things, said Ashbaugh.
“We’re trying to play catch-up with a lot of years of maintenance to our facilities and our roads and our playgrounds and parks that need to be addressed first.”
With limited funds, the city has to carefully choose which projects to begin now, and which to put on the five- or 10- or 20-year plan. Which is where you come in.
Budgeting is roughly an eight-month process, and it really gets going in June, when that same law requires two public hearings on the capital budget. Instead of just taking public testimony, the Peduto administration favors deliberative forums: they order a bunch of sandwiches and ask people to have small group discussions about the projects they want.
At the second deliberative forum held this June, people talked about complete streets and sidewalks, among other things.
A budget is really a set of guiding priorities, said Dave Hutchinson, capital budget’s senior manager.
“We want to make sure we’re improving quality of life in all city neighborhoods,” he said. “And [we] want to make sure that the projects being proposed have your support as community members.”
Though you’ll have to wait until next year to attend a deliberative forum, Ashbaugh and Presutti said there are other ways to make the capital budget responsive to the needs of a given community. Their offices monitor 3-1-1, emails to the city, complaints to council people and community meetings. They all affect what projects get priority.
Seriously. They’d love to hear from you.