In three years, 2017, the City of Pittsburgh arrives at the “debt cliff”. In that year debt service will stand at $87.2 million, and projections show a drop to $71.7 million and $38.2 million in 2018 and 2019, respectively, driving down the percentage of the operating budget represented by debt service from 16% to 7%.
That’s been known for a while, but is encapsulated in the third Act 47 recovery plan, which is now posted on the state’s Department and Community Development website. The report shows that in 2012, direct net debt per capita in the City stood at $1,996 and represented 21.2% of the budget. Seven other cities are used in the comparison group with Pittsburgh; only St. Louis topped the per capita figure for Pittsburgh at $3,024. Others—including Newark, Buffalo, Cincinnati, and Cleveland—are in the range of $1,400 to $1,800 per capita.
The Act 47 team produced a similar measurement five years ago in the second recovery plan using the same cities using 2008 totals. Pittsburgh stood at $2,667 per capita then (a decrease of 25%). St Louis, Cincinnati, and Cleveland have all added debt and thus boosted per capita amounts (all cities in the sample reported lower populations from 2000 to 2010). Toledo, Rochester, and Buffalo have all seen per capita debt levels fall around 30%, and Newark has seen a 10% drop. Pittsburgh still remained the only city to have more than 20% of its operating expense taken up by debt service—if the 7% level is reached by 2019 Pittsburgh will be closer to Newark, Rochester, and St. Louis which reported single digit levels of debt service to operating expense.
