Report on County’s Finances Shows Fund Balance Shrinking

May 2, 2012

Allegheny County Controller Chelsa Wagner presented her report today on the state of county finances for 2011.

In the Comprehensive Annual Financial Report (CAFR), Wagner highlighted the problem of relying on unsustainable measures to fill in budget deficits over the past three years, including a total of $45.6 million in one-time budget fixes for 2011.

Wagner also cited a decrease in the county's general fund balance over the past 10 years, dropping more than $40 million since 2002. She says the balance in the general fund is almost $30 million less than rating agencies suggest.

"Currently standing at $6.2 million at the close of the last fiscal year, [the balance] is down from $20.4 million from the previous year," Wagner said. "In common terms, I think this is important to recognize, this is lower than many or some of the school districts in Allegheny County. Just to put that into perspective."

The controller said even with a 1% raise in the millage rate to 5.69, of the $53.8 million in additional property tax revenue, only $16 million of that will represent an increase in the spending budget.

Wagner provided few solutions to fix the problem, citing continued loss of state and federal funding and future uncertainty of the same funds. She said making sweeping cuts to accommodate the county's lack of funds is not a plausible idea.

"There's a really clear need here in Allegheny County and we've been and we're continuing to cut into the bone," Wagner said. "These aren't discretionary services … and they're often services that are mandated by state government itself or by the federal government."

Wagner did point to a few positives within the county, including an inter-governmental agreement between the county and the city of Pittsburgh to use a financial management system which Wagner claims will amount to immediate six-figure savings for the county.

Additionally, Wagner said Allegheny County is in better shape in governmental and personal finances than the rest of the country. Unemployment in the county stood at 7.1% at the end of 2011, compared to 8.1% in the state and 8.8% nationally. Home sales were up 16% and property tax revenue up 2.8%.