Pittsburgh exacerbates its fiscal pickle

Pittsburgh exacerbates its fiscal pickle

Actions have consequences, of course. So, too, do inactions, as Pittsburgh Mayor Bill Peduto now is finding out.

On Monday, Peduto introduced a no-tax-increase $564 million 2021 operating budget. That’s down by about $44 million from the current fiscal year, which runs from January to December.

But, he says, if the city does not receive long-sought federal aid to offset tax receipt losses from the effects of the coronavirus pandemic, $25.6 million in personnel cuts – about 10 percent per department – will have to be made.

The mayor says that would affect about 634 employees beginning July 1.

“It never should have come to this,” Peduto said, adding that the specter of layoffs “breaks my heart.”

But as Jake Haulk, president-emeritus of the Allegheny Institute for Public Policy, astutely notes, this mayoral heartbreak could have been mitigated, at least to some degree:

“If Peduto had laid off nonessential employees this year, he would not be facing 600-plus cuts,” said the Ph.D. economist.

Indeed, it has been a nearly nine-month-long head-scratcher as to why Peduto did not make such a move. That’s especially true considering early projections of a $100 million budget hole and the number of private-sector layoffs.

Peduto instead chose a limited series of supposedly belt-tightening measures.

That said, the mayor now proffers a political “logic” in not laying off city workers in the hope of leveraging federal dollars:

“Pittsburgh just played a major role in the historic presidential election placing Joe Biden and Kamala Harris into the White House,” he said. “The incoming administration has made commitments to providing financial assistance to cities and investments to infrastructure. We need this funding to come in the first quarter of the year.”

But if a city has not done everything in its power to first help itself, why should taxpayers be expected to pony up “make-whole” dollars?

As the Post-Gazette reported it:

“Council President Theresa Kail-Smith said that while there will be ‘some back-and-forth’ with the administration, she thinks overall ‘they’ve done a great job at keeping people at work.’

“Councilman Ricky Burgess echoed her comments:

‘We could have laid people off by now, but instead [Mr. Peduto] did the compassionate thing so that city employees who we love can still get a paycheck and take care of families during this once-in-a-lifetime pandemic.’”

But that, and while perhaps well-intentioned, comports neither with “the financial responsibility” that Peduto & Co. regularly tout nor the fiscal reality facing the City of Pittsburgh.

And that’s no matter if the early-on projected budget hole was whittled by stronger-than-projected tax receipts in some categories.

Adding reckless insult to further nonfeasance are the words of Councilman Corey O’Connor:

“I think the big concern is to wait to see until [July] to see what happens. We’re really relying on Washington or the state bailing us out at this point,” he said.

So, steps that should have been taken nine or so months ago won’t be taken for another eight months or so?

That’s not merely unsound public policy, that’s irresponsible governance.

Colin McNickle is communications and marketing director of the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).