Allegheny County’s 2021 proposed budget

Allegheny County’s 2021 proposed budget

Allegheny County’s 2021 fiscal plan was introduced to County Council on Oct.6.  The plan consists of operating, capital, grants and special accounts budgets for the fiscal year that begins Jan. 1, 2021.

The $942 million operating budget accounts for most of the day-to-day operations of county government.  Revenues come from taxes; licenses and permits; charges for services; fines and forfeits; state, federal and miscellaneous sources.  It consists of five separate funds—general; debt service; liquid fuels; transit support and infrastructure support.

In the past five fiscal years over half of the operating budget’s revenues came from five taxes: property; sales; alcoholic beverage; vehicle rental and the local share assessment from the Rivers Casino.

In 2021’s proposal, no tax rates are increasing or decreasing.  Of the five taxes, the county expects to collect less revenue from three:

Property tax revenue reflects total for discount, current, delinquent, penalty, interest, and homestead exemption but does not include refunds; alcohol and vehicle rental tax include penalty and interest.

With no change to the property tax millage, the projected increase in revenue would be a result of new construction, improvements and appeals that raise the value of real estate.  A possible downward force on property tax revenue that could arise are successful appeals by many large commercial properties affected by the coronavirus. These properties could point to loss of income as a result of the shutdown or restrictions that affected their value. The county twice extended the collection period for 2020 property taxes before they were deemed delinquent.  As of the end of August the county collected 95 percent of its budgeted total.

Whether the county’s prediction that sales tax revenue won’t decrease will also depend on sales activity and any restrictions.  The Regional Asset District, which administers half of the 1 percent sales tax, released its preliminary 2021 budget and expects a 5 percent reduction from 2020’s grants.

In dollar terms, the projected decrease in alcoholic beverage taxes—which likely means there could be continued restrictions on dining establishments and bars continuing into 2021—represents the biggest year-over-year drop in any of the operating budget’s revenues. (The next closest is a projected $8.7 million decrease in U.S. Health and Human Services revenue.) Projected decreases to the vehicle rental tax and the local share assessment indicate the county thinks there will be less travel and tourism and less gambling at the casino.

Since the county is required to adopt a balanced budget, an overall decrease in $17.3 million in revenue requires $17.3 million in spending cuts or dipping into reserves.  The operating budget will receive transfers of $29 million ($9 million greater than 2020) and there are departments taking reductions (solicitor; budget and finance; court records; information technology, etc.). 

The operating budget expects $13.2 million in savings on debt service and a $13.7 million reduction in miscellaneous agencies, with capital funding to the Port Authority dropping to zero in 2021.  That is likely a product of the decrease to alcohol and vehicle rental taxes but also a realization that the authority received $141 million from the federal CARES Act and may receive money from the county’s CARES Act distribution as well. 

Other departments will see increases (human services, health, administrative services, etc.) and the budget proposes a new department called “Children’s Initiatives,” which is a spinoff of the 2018 ballot question on a “Children’s Fund” which was defeated.

Overall headcount is expected to increase by 13 (taking employment over 6,000 employees) and the chief executive indicated in the budget presentation that no layoffs are planned.

If the 2021 budget is adopted with $942.5 million in expenditures that would be a 1.8 percent decrease from this year’s budget.  Based on audited data from 2010 forward on total expenditures in the operating budget, there have only been two year-over-year decreases in spending (2010 to 2011 and 2013 to 2014,) both less than 1 percent.