Mayor Ed Gainey’s proposed 2025 fiscal plan envisions a leaner operating budget as compared to last year, but administration officials stress that it still maintains funding for essential city services like policing and infrastructure.
The $657 million spending plan — which reflects a $29 million cut in the current year’s operating expenditures — does not contain a tax increase, and reflects the end of federal aid offered in response to the coronavirus pandemic. And the proposal comes at a time of watchful focus on Pittsburgh finances.
Deputy Mayor Jake Pawlak acknowledged to reporters that the city's financial position has been hotly discussed. Given that context, “We're excited to propose a budget which ... does not include tax increases, and does include increased investment in critical areas of growth.”
The city, he added, “will continue to meet our obligations to our residents around core services like street paving and demolitions and other similar routine city functions,” Pawlak said.
The budget also sets staffing levels for the city’s police bureau at 800 officers — a decline from the 850 budgeted for the current year. That staffing level was itself scaled back from the 900 officers previously regarded as the city’s ideal force size.
But Pawlak noted that 800 officers is still more than the roughly 750 currently employed. And he said that efforts to “civilianize” some administrative jobs should free up more officers to be out on the streets.
“It's our objective to have the right number of officers to complete the job for city residents,” Pawlak said. “There's a total of 16 new civilian positions in the police bureau in this budget proposal to reflect that transition, which in turn then allows us to move sworn officers who are able to make arrests and investigate crimes into patrol and investigative functions.”
The budget also allocates 10 new social worker positions in the Office of Community Health & Safety. That, the administration says, will allow the office to offer its “co-response” program to provide mental-health services where needed in all zones and all shifts.
Overall the operating budget, which reflects the day-to-day cost of city services, has shrunk about 4.2% since last year, said chief financial officer Patrick Cornell. That’s an effort to contend with a $53 million drop in revenues over the current year.
Much of that decline stems from the end of aid through the American Rescue Plan Act, though city finances have also been stressed by a drop in property tax revenues as some commercial building owners have appealed their valuations. Drops in property and deed transfer taxes are offset by an increase in revenue from payroll preparation and wage taxes.
“This budget demonstrates my Administration’s responsible stewardship of this City’s finances. We remain truthful and transparent about our financial trajectory while we continue to make Pittsburgh a place where everyone who wants to call this great city home is able to,” Gainey said in a statement.
“This budget is just the first step to ensuring that our city remains on a course of fiscal stability and responsibility — that is what the public and our city deserve.”
A long-expected two-year increase in debt payments will crimp the city’s efforts, as debt service will account for more than 11% of the city’s spending for 2025 and 2026 before dropping down to less than 8%. But the budget’s longer term forecast is not all sunny: By the end of the city’s five-year forecast, Gainey envisions drawing down the city’s reserve fund to 10% of its annual spending — the minimum allowed by law and down from the current 25%.
The draft budget will be circulated for review and comment by local officials, with recommendations incorporated into a more formal presentation before City Council in November. The city must have a spending plan finalized by the end of the year.
City Controller Rachael Heisler, and some council members, have previously critiqued the mayor’s handling of city finances, cautioning that spending could outpace revenues and revenue projections were too optimistic.
But earlier this month, Fitch Ratings bumped Pittsburgh’s general obligation bond rating up from AA- to AA. It’s a sign of financial stability that will mean lower borrowing costs for the city in the future. Both Gainey and Heisler celebrated the upgrade.
The city also released a capital budget Monday, which lays out a spending plan for infrastructure improvements and other longer-term investments. The budget for such outlays also shrunk — Capital expenses decreased in this year’s budget by around $41 million. Pawlak said the city has a “very sparing approach” to new projects: As it has before, the administration says it will focus more on completing existing projects than planning new ones.
Among the infrastructure programs receiving funding, the newly-approved Automated Red Light Enforcement program received an allocation of $1.2 million, adding a new position to oversee smart traffic management with a yearly salary of $91,000. Paving also got an around $3.3 million boost in funding, following initial concerns that there would be less money available in this year’s budget.
Some projects that are taking longer than initially planned have had their funding pushed forward into the following years.
