Pittsburgh’s audited results for 2018

Pittsburgh’s audited results for 2018

Pittsburgh’s 2018 comprehensive annual financial report (CAFR) has been released.  The CAFR contains an in-depth look at the fiscal characteristics and performance of the city’s budget year, its related entities and the city’s overall financial position.

Based on the city’s statement of revenues, expenditures and changes in fund balances in 2018, the city collected $570.1 million in revenues from taxes, fees and other payments and spent $545.1 million, resulting in a general fund excess of $25 million.  That exceeds 2017’s excess by $12 million.  When the city exited Act 47 the five year projections required by the act projected operating surpluses.  The city’s net change in the general fund balance was $3.3 million.

We have long argued that new sources of taxation and increases to existing taxes should be subject to approval by taxpayers in a referendum.  Of the city’s seven main taxes, only the deed transfer tax rate increased in 2018 (by 0.5 to 2.5 percent for the city’s share).  While the Affordable Housing Task Force recommended that this tax increase be placed on the ballot, the city council opted not to follow that suggestion.  Actual deed transfer tax collections were $34.1 million, roughly $4.3 million (14 percent) above 2017’s collections according to the CAFR. The remaining tax rates were unchanged in 2018.

We have also noted that spending should be tied to inflation and/or population changes.  Based on 2016-to-2017 changes in the consumer price index for Pittsburgh inflation was 2.3 percent.  Based on population estimates for the city in that same period population fell 0.9 percent.  If spending was benchmarked against an inflation-plus-population metric of 1.5 percent, the city’s spending results in 2018 far outstripped that.

General government, which includes elected offices, law and finance, grew 5 percent to $275 million.  Public safety, including police and fire, grew 6 percent to $207 million.  Public works grew 4 percent to $57 million.  Overall general fund spending grew 2.7 percent, a bit faster than inflation but greater when the population decline is taken into consideration.

Bringing spending levels in line with what is occurring with prices and city population would go a long way to improving the city’s long-term fiscal picture.