Facts from the Act 47 Plan
Pittsburgh’s debt is high, but how does it compare to other cities?
The Recovery Plan includes data from Moody’s Investor Services on FY2008. Using direct debt (not counting overlapping debt from other governmental agencies or debt that is paid by recurring revenues like user fees) and population, Moody’s put Pittsburgh up against seven other cities (Newark, Buffalo, Rochester, Cincinnati, Cleveland, Toledo, and St. Louis) on outstanding debt, per capita debt, and debt service as a percentage of operating expenditures.
Pittsburgh’s total debt ($791m in Moody’s data, closer to $737m now) was 51% higher than the group average and almost $100m more than the next closest city (Cleveland). On a per person basis (Moody’s used 2000 Census numbers, which is higher than current population), Pittsburgh carried $2,667 in debt. The group average was $1,702 (a 57% difference) and the closest cities trailing that number were just over $2,000 per capita.
Finally, Pittsburgh spends about 21% of its operating expenditures on debt service, $1 for every $5 in spending. The group average was 7.6%, and only Cleveland and Cincinnati reached double digit percentage levels (11 and 16.3 percent, respectively).
And this is against rust belt cities-our own analysis of the Benchmark City in 2007 showed that Pittsburgh’s net bonded per capita debt was three times that of cities like Salt Lake, Charlotte, Columbus, and Omaha, a good geographic mix.
To get out of this predicament the Act 47 team recommends that the City refinance debt in 2012, plow more money to paying off debt, and try to avoid borrowing and instead continue to use "pay as you go" financing.