Pittsburgh city controller releases annual financial report and warns of challenges ahead
PITTSBURGH (KDKA) -- It's time for a tough money talk in the city of Pittsburgh. Budget shortfalls could soon impact anything from the pavement on your street to your tax bill.
City Controller Rachael Heisler released a 255-page report that says without the American Rescue Plan, the city would be in some trouble, with the budget $9.5 million in the red and budget tax revenues in a $20.6 million hole. That money is going to bail us out for now, but it dries up at the end of this year.
Tough conversations are uncomfortable, but City Controller Rachael Heisler says it's better to know now.
"It's never too late but it's also never too early," Heisler said.
She calls the city's finances "stable," which isn't great but means there's still time to turn things around.
"In total, revenue was up 8.6 percent, which includes ARPA and investment income, which are two things that we cannot rely on after this year," said Heisler.
The lifeline that's keeping the city afloat is sinking soon -- the ARPA money dries out at the end of this year. That means like all of us, Heisler says the city can't keep living or spending beyond its means.
"Expenditures are up 10.4 percent, which is a drastic demonstration of expenses outpacing revenue," she said.
Heisler can point to some positive growth behind that spending. Tourism rebounded, contributing $6.4 billion to the economy. And airport travel is back to 92 percent of pre-pandemic travel. But future necessary budget cuts will likely not sit well with city residents.
"I mean, our paving budget is going to be cut by 75 percent over the next three years," Heisler said.
The city's also taking hit after hit right now with the amount of property tax appeals after so many buildings dropped in value. Heisler says tax increases could be a part of the conversation moving forward and that's why she's urging city leaders to figure out how to attract more people to the city.
"New residents pay deed transfer tax, new residents pay property taxes, new residents pay wage taxes and that would change our city's finances if we were doing more things to get folks to stay here," Heisler said.
And when times look grim, Heisler says let's not forget about the five large nonprofit employers in the city.
"As a city, we need to have a conversation with those nonprofit partners and ask about revenues and pilots. Voluntary payments should be part of the conversation, absolutely," Heisler said.
She said keeping businesses in city limits should be another huge priority. She mentioned Giant Eagle recently relocated its headquarters from Lawrenceville to Cranberry. Every employee who worked at the corporate office used to pay $52 a year to the city in a local services tax. With them gone now, the city can't make up that money, so every little bit counts and keeping and attracting people to Pittsburgh needs to stay top of mind.
