In mid-February, Pittsburgh’s Office of Management and Budget (OMB) delivered the fourth quarter Financial and Performance Report, which also shows year-end results for 2023. The financials are unaudited; in about three months the City Controller will publish the Annual Comprehensive Financial Report with audited data.
OMB’s report shows the city ended the year with $688 million in revenues and $620.9 million in expenditures, resulting in a positive net operating balance.
Five tax levies account for 65 percent of the city’s revenues: property; earned income; payroll preparation; parking and deed transfer. The remainder comes from other taxes and non-tax sources. The earned-income and payroll-tax collections for 2023 came in above the adopted budget amount.
The bulk of spending is related to salaries/wages and employee benefits. These two expenditure categories totaled $475.1 million and were 77 percent of total expenditures. For the final pay date included in the report, the city had 3,214 employees. The remainder of spending is attributed to various services, supplies and paying off debt.
Compared to the pre-pandemic OMB report for 2019, revenues grew 16 percent and expenditures by 12 percent. In that time period, the city received COVID-related federal aid, first from Allegheny County’s share of Coronavirus Relief Fund dollars and then directly from the American Rescue Plan. A portion of the latter has been used in the city’s operating budget beginning in 2021 through the current 2024 budget year. In 2025 that money will not be available.
City taxes and non-tax revenues were affected in different ways during the pandemic. The parking tax has yet to meet what was collected in 2019. At $47.5 million, collections are 78 percent of the $61 million collected in 2019. Continued appeals of commercial properties in Downtown Pittsburgh and may have an impact on property tax collections this year and the coming years, and may include refunds for previous years, all of which could affect the city’s tax rate.
Salaries/wages and benefits grew from 2019 levels, 16 percent and 6 percent, respectively. New collective bargaining agreements with the city’s two largest bureaus—police and fire—were completed in the time period. Compared to the 2023 employee count, the city has 95 fewer employees. On a per 1,000 person basis, Pittsburgh has more employees than those that make up the Benchmark City.
Looking back at recommendations we made for the current mayor when taking office, such as the inclusion of a taxpayer bill of rights in the Home Rule Charter and not supporting anti-business measures, those have yet to happen. Implementing those measures would go a long way to bolster the city’s financial position as it budgets without pandemic relief, especially with the 2025 forecast showing a very slim operating result.
