Corey O'Connor administration outlines millions of dollars in proposed cuts in city budget

Faced with a $30 million to $40 million shortfall, Mayor Corey O'Connor petitioned the Pittsburgh City Council on Tuesday to reopen the budget and outlined millions of dollars of cuts. 

Two weeks ago, the O'Connor administration said it took a look under the hood and didn't like what it saw. Despite new tax revenue from a 20 percent tax increase, the city still faced a shortfall and was on the hook for things not budgeted. 

"Health care costs are increasing at high rates, gasoline costs going up, water rates going up, things that we should have known were in the budget and weren't in there," said Dan Gilman, O'Connor's chief of staff.

On Tuesday, O'Connor petitioned the council to reopen the budget and presented a list of cuts and economies to right its finances. Dozens of cuts saving millions of dollars by canceling contracts and expenditures, while opting not to fill vacant positions. The administration is sparing only the essentials, according to Gilman.    

"The good news is we think we can get through this without cuts to core services, without raising taxes and without laying off any city workers," he said.

The city still struggles with the fallout from the pandemic, when Downtown was hollowed out, property values and tax revenues fell and have never recovered. Federal relief funds have now dried up, and the O'Connor administration accuses the departed Gainey administration of leaving behind a fictitious budget while dipping into surplus and other trust funds to hide the shortfalls. 

"The city lied to the public. That's the bottom line," Gilman said. 

Gilman says the city must now make these painful cuts to live within its means, but can't cut its way to financial health, needing to grow new revenue with the help of foundations and nonprofits and fostering new development and new business.

"The city has to grow," Gilman said. "As the mayor said, we have to be a city of yes. We have to be growing but responsible. Housing for all. We need to be more pro-business and bringing in opportunities."

With a snip here and a snip there, the administration says it can get through the year maintaining basic services, but it can't manage decline and must generate new tax revenue to keep the city moving forward.