O'Connor reopens Pittsburgh's budget to avoid financial crisis

To avert a financial crisis, Pittsburgh Mayor Corey O'Connor says the city will need to reopen its budget and begin making tens of millions of dollars in cuts. 

Just before Christmas, the Pittsburgh City Council voted to increase property taxes by 20 percent, but the O'Connor administration believes the city is still in financial trouble and a thousand cuts are needed to avoid layoffs and future tax increases.  

As it turns out, the tax increase didn't stop the bleeding. Even with an extra $27 million in new revenues, the city is still operating at a deficit. While not naming names, O'Connor came close to saying the Gainey administration has left him holding the bag, saying the city now needs to make $30 million to $40 million in cuts in order to stay solvent. 

"This is what we have right now," O'Connor said. "Whatever happened before happened before. For us, it's moving forward. These are the numbers." 

Earlier this month, Pittsburgh City Controller Rachael Heisler raised the alarm, saying that while Ed Gainey's administration anticipated a $3 million surplus, it ended last year with an $8 million deficit. 

"Trust broke down with the past administration," Pittsburgh City Councilman Bobby Wilson said on Wednesday. "I'm appreciative this mayor is taking this seriously, the financial situation we're in."

Heisler says in the long term, the city needs to grow and encourage business and development, but needs to do some serious belt-tightening in the short term. 

"We're in a position where we need to focus very seriously on cost containment," Heisler said. "We need to focus very directly on economic growth, and we need to be very strategic about where we're spending money."

Starting next week, the administration will reopen the budget and go over spending with a fine-tooth comb, somehow making cuts to reduce spending by close to $40 million without sacrificing city services or jeopardizing public safety. While O'Connor will not fill certain positions, he said police hiring will continue. The goal is to avoid layoffs and future tax increases by making cuts to contracts and bond issues.

"Right now, we are not considering any new taxes, any layoffs or significant cuts to city services," O'Connor said. "We will be watching every dollar and looking at every single city contract." 

In a statement, former Pittsburgh Deputy Mayor Jake Pawlak says he disagrees with the assertion that there were miscalculations in the proposed 2026 budget. His statement in full reads: 

"It's the prerogative of any new administration to propose changes to the budget that reflect their priorities and the policy agenda they intend to pursue.

"I disagree that there were miscalculations or omissions in the proposed 2026 budget; the Gainey Administration put forward a responsible budget that, reflecting challenging circumstances, relied on permissible and responsible transfers out of some of the City's trust funds. I respect that the O'Connor Administration has a different philosophy about the use of such funds, and if they see a different approach, that choice is rightfully theirs.

"I am happy to hear that the O'Connor Administration is not planning any layoffs or service cuts, and that they intend to continue to advance the Comp Plan and the vital work of the Office of Community Health and Safety and the Stop the Violence program. I look forward to seeing more specific details of the administration's proposed changes."