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Allegheny County Executive to present 2025 budget, amid fears of deficit, potential tax hike

The Allegheny County Courthouse on Jan. 10, 2023.
Jakob Lazzaro
/
90.5 WESA
The Allegheny County Courthouse on Jan. 10, 2023.

Allegheny County Executive Sara Innamorato will unveil her administration’s first budget proposal Tuesday. The plan comes amid mounting fiscal headaches, leaving many observers bracing for a tax hike proposal.

In an interim financial report released earlier this month, County Controller Corey O’Connor warned of dwindling federal COVID aid and a growing deficit under the current year’s budget drafted by Innamorato’s predecessor, Rich Fitzgerald.

Expenses are outpacing revenues, due in part to steep declines in the assessed values of commercial properties Downtown. Unless more revenue can be found, the county is expected to have a $60 million deficit by the end of this year. That represents roughly 6% of the county’s annual $1 billion spending plan, and it’s an increase from 2023’s $40 million deficit.

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Over the last four years, the county — like many local governments — has used federal funds from the American Rescue Plan Act to plug holes in the budget. But that money is running out, and covering deficits might require the county to spend down its “rainy day fund” — money set aside to cover costs during downturns.

Innamorato is expected to propose a millage rate of 6.93, according to County Councilor at-large Bethany Hallam. That’s up from the current rate of 4.73 mills, and would result in about $165 million in additional property tax revenue.

WESA could not confirm the number, and Abigail Gardner, a spokesperson for the Innamorato administration, declined to comment on it.

Hallam said such an increase is desperately needed after 12 consecutive years without an increase to the county’s property tax, or a revaluation of its real estate through a countywide reassessment.

Innamorato, she said, is stuck “fixing the mess that the administration inherited.”

Hallam, who was frequently critical of Fitzgerald while he was in office, noted that numerous other municipalities have raised their taxes over the past dozen years. County-level increases “should have happened incrementally every couple of years since 2011, just like we should have reassessed regularly every couple of years since 2011, and none of that happened.”

Hallam added that a tax increase of the size she expects would not fund any additional services: “All it does is plug the holes of a ship that has been sinking.”

Whether or not County Council would approve a proposed millage increase is another question. The Home Rule Charter requires a 10 of its 15 members — a two-thirds supermajority — to make any change to real estate tax rates, and tax increases are typically unpopular.

Over the last 12 years, “when they said there's no millage increase, well, that was an easy vote” to approve the budget, said Councilor Nick Futules.

Futules stressed that he could not comment on a budget that has yet to be presented, but said he might well respond to any tax-hike proposal with a smaller increase.

The administration “[presents] what they want and we present what we want and then we vote on it. And then they have to live with it,” he said.

Council will hold two budget hearings on Oct. 17, Oct. 28 and Oct. 30, during which members of the public can comment on the proposal. Innamorato and council must approve the budget in early December.

Corrected: October 8, 2024 at 10:07 PM EDT
Updated to clarify the number of budget hearings in October. There will be three meetings, not two as previously stated.
Julia Zenkevich reports on Allegheny County government for 90.5 WESA. She first joined the station as a production assistant on The Confluence, and more recently served as a fill-in producer for The Confluence and Morning Edition. She’s a life-long Pittsburgher, and attended the University of Pittsburgh. She can be reached at jzenkevich@wesa.fm.