Pittsburgh Projected to Finish the Year with Budget Surplus
The city of Pittsburgh is on track to finish 2013 with a budget surplus, according to the Popular Annual Financial Report (PAFR) released by Controller Michael Lamb.
The earlier, Comprehensive Annual Financial Report (CAFR), showed the city ended 2012 with a surplus in excess of $20 million. Lamb also gave an update on how the city is doing so far this year.
Citing a national report out this week, Lamb said this year the Pittsburgh region is experiencing moderate growth, while many other parts of the nation are experiencing slower, modest growth.
“At mid-year, when we look at year-to-date collections, we’re seeing city tax revenues are ahead of the same period last year in every category except one, the property tax,” Lamb said.
And that is because millage rates were reduced last year in order to prevent the city from getting a windfall. Lamb said that was successful, and while revenues are down, he said it looks like the city will finish 2013 at budget.
One area of concern is the local services tax. That’s the $52 tax collected from everyone who works in the city of Pittsburgh. Between 2010 and 2012, revenue dropped which means jobs were either lost, or there was stagnant job growth.
“Which is interesting given the fact that we were adding jobs throughout the recession,” Lamb said, “but it seems that as the country came out of the recession, growth of jobs in the city stopped. That’s also hard to understand because it doesn’t jive with what we know is going on regionally: We know that the labor force has grown in our region, we know that there are more jobs in our region, but that hasn’t reflected into significant job growth in the city.”
Lamb said that could be because of the high number of public sector employees who work in the city, an area that has been hit hard by cuts in employment. Or, he said, it could be a reporting issue, with more freelancers and startup businesses not yet reporting the tax. Whatever the cause, Lamb said his office will continue to keep an eye on the issue.
“What we are noticing is that so far in 2013, we are running a little ahead of last year, so maybe that situation is correcting itself, not significantly, but it’s at least plateaued, and maybe we’ll start to see job growth again,” he said.
Overall, he said Pittsburgh is doing well and is expected to finish the year strong.
“The likelihood is that we will see another surplus this year, probably not as significant a surplus as last year, but that’s good news,” Lamb said.
This is the third year the controller’s office has issued the PAFR, which Lamb called a sort of layman’s breakdown of city finances. The full report will be available on the controller’s website.