Pittsburgh City Council raised property taxes 20 percent in December and reopened and passed a revised 2026 operating budget in April, But if estimates from the Office of Management and Budget’ second quarter report hold, the year will end with $698.4 million in revenues and $728.6 million in expenditures, a deficit of $30.2 million. The report was the subject of a Sept. 1 post-agenda meeting.
Collections of property, wage and deed transfer taxes were up over last year’s second quarter while payroll preparation and parking taxes were lower. Along with other tax and non-tax sources, revenues in the second quarter were 6 percent lower than last year’s second quarter.
Expenditures were 7 percent lower than last year’s second quarter. Eight of the 27 departments/bureaus/offices etc., had lower spending compared to last year’s second quarter, and the remainder were up compared to that time frame.
The report showed overtime incurred during the NFL Draft in April. For police, fire, emergency medical services and public works, the total was $1.3 million.
In September 2024 City Council approved an agreement with VisitPittsburgh that authorized spending $1 million plus the value of in-kind services. This was amended in April 2026 to allow the city to be reimbursed up to $2 million for “…certain expenses incurred by the City as a result of the 2026 NFL Draft.” Budget and finance staff at the post-agenda agreed that the parking tax was negatively affected during the Draft.
Based on audited data for general fund revenues, expenditures and transfers over the past two decades, the city had a deficit in 2008, 2010, 2014, 2020 and 2025. A deficit in 2026 would mean back-to-back years where spending outstripped revenues.
The controller described the city’s finances as “very delicate.” Almost anything can tip the balance. For instance, a lawsuit filed by a resident of the Pittsburgh Public Schools District over the wage tax sharing arrangement between the district and the city—$26.7 million this year—was recently transferred to Common Pleas Court from Commonwealth Court and had a status conference Sept. 2. A ruling that directs the money back to the school district would have significant implications for the city.
City officials need to take a hard look at what services the city provides and how they are provided. One council member “suggested shrinking the city’s workforce through attrition by not replacing those who retire or quit.” That’s something we have long recommended, and as recently as January. Privatizing and outsourcing non-core, non-public safety functions such as garbage collection and snow removal and perhaps discontinuing some functions (in an article about the city’s five-year forecast, the mayor’s chief of staff said “… other things, which are great services and great benefits that we cannot afford to do and that local government wasn’t set up to do, are going to have to be looked at.”) are key to reducing headcount and leading to the growth city officials seek.
