Deep cuts and no tax increase in Mayor Corey O'Connor's preliminary budget proposal for 2027
Facing a fiscal crisis, Pittsburgh Mayor Corey O'Connor released a budget plan on Wednesday for next year that calls for deep cuts.
O'Connor calls it an honest budget that will not result in a tax increase, layoffs or cuts in essential services. But a preliminary spending plan he released on Wednesday is raising some concerns, especially the need to dip into the rainy day fund.
Faced with an unexpected $40 million shortfall, the administration set about plugging that hole, determining that, unlike Allegheny County's pension fund, the city plan is in good shape. And so next year, it will reduce payments into that plan by $10 million.
The city is also liquidating the Stop the Violence Fund and the Housing Opportunity Fund for affordable housing. Though the city said those efforts will be funded through other means, city council has questions.
"It leaves some questions unanswered as to how exactly we get to all the things that council members have vocalized that they wish to see, including myself, around programs coming out of the Housing Opportunity Fund and the Stop the Violence Fund," Councilmember Erika Strassburger said.
But even those measures did not close the gap, and the budget finds the need to use $27 million from its fund balance — the city's so-called rainy day fund. The proposal immediately raised concerns from Pittsburgh Controller Rachael Heisler, who said the fund is falling to critical levels.
The city faces a $250 million deficit over the next five years and can't dip into the fund much further. The mayor said the city will need to continue cutting, grow its tax base, and get outside help from nonprofits and the state to avoid that. But he said this year it's necessary to keep the city going without raising taxes or cutting core services.
"Not raise taxes because we know what people are going through right now with higher costs," O'Connor said.
While reluctant to dip into the city's surplus fund, the mayor said it was needed to get through the coming year, but the city will need to generate more revenue because, in the coming years, that will not be an option.
