Summary: The city controller presented Pittsburgh’s 2024 Annual Comprehensive Financial Report on May 1, summarizing results from 2024 while expressing concerns over the financial future of the city. All general fund actual and budget figures are reported on a budgetary basis for comparison purposes.
The general fund
Looking at the general fund—which encompasses the city’s core government functions— revenues totaled $703.6 million while expenditures totaled $699.7 million, resulting in a surplus of roughly $4 million.
Thus, general fund revenues were $10.6 million lower than the budgeted amount of $714.2 million. The two largest sources of revenue went in opposite directions. The property tax raised $143.4 million, which was $8.3 million less than budgeted (95 percent of what was budgeted). Assessment appeals driven by the decline in the Common Level Ratio had an impact, especially in regard to Downtown commercial property. Based on Allegheny County’s certified roll, taxable value in the City of Pittsburgh fell $284.8 million (1.4 percent) in 2024. As of January 2025, taxable value totaled $20.3 billion.
The wage tax raised $137.3 million, which was $1.1 million above budget (100.8 percent of what was budgeted). In certifying the 2025 five-year revenue forecast last September, the controller noted the wage tax was projected to grow based on wage growth and inflation. These factors may have had an impact on 2024’s actual collections. Note that the city still receives 0.25 percent of the 2 percent wage tax levied by Pittsburgh Public Schools due to state legislation dating back to financial recovery and oversight.
Other large tax revenues where the collections exceeded the budget amount were the parking tax ($58.5 million to $51.5 million), the payroll preparation tax ($75.8 million to $75.7 million) and the amusement tax ($20.9 million to $18.9 million). Collections were lower than budgeted for the deed transfer tax ($47.9 million to $59.1 million budget) and the local services tax ($13.7 million to $15.7 million). The overall deed transfer tax rate in the city (state, municipal and school district combined) is much higher than surrounding municipalities in the county.
The facilities usage fee (“jock tax”) brought in less than was budgeted ($1.6 million to $4.4 million). The state Supreme Court is hearing arguments on the legality of the fee, which adds to the uncertainty of its future use.
2024 marked the year that all American Rescue Plan (ARP) funds, which supported the general fund for the last few years, had to be allocated. ARP funds accounted for $46.5 million (around 7 percent) of general fund revenues in 2024. From 2021 through 2024, $177.9 million was transferred from the ARP trust fund to the general fund.
General fund expenditures were $20.8 million lower than the budgeted amount of $720.5 million. Close to 60 percent of the $699.7 million in expenditures were accounted for by the Department of Finance and the Bureaus of Police and Fire in the Department of Public Safety. The inclusion of debt service and pension expenditures is the reason why the Department of Finance had expenditures of $184.1 million; that department came in below budget ($192 million). The Bureau of Police was surprisingly under its budget ($119 million to $124.3 million) while Fire was over ($102.6 million to $97.2 million).
Five other components of city government spent $20 million or more. Three were under budget (Departments of Human Resources and Civil Service and Innovation and Performance and the Office of Management and Budget) while two were over budget (Bureaus of Emergency Medical Services in the Department of Public Safety and the Bureau of Operations in the Department of Public Works).
The controller noted the city’s unassigned general fund balance—essentially its “rainy day fund” —rose to roughly $200 million at the end of 2024.
All governmental funds
When looking at all governmental funds—general; debt service; community development block grant; capital; ARP and other nonmajor—in the four years affected by ARP, the city posted two positive and two negative operating results. However, after accounting for other financing sources such as transfers, the net change to the fund balance for total governmental funds was positive all four years.
Revenues, Expenditures, and Fund Balance—All Governmental Funds ($, millions)
| Item | 2021 | 2022 | 2023 | 2024 |
| Total Revenues | $705.9 | $781.0 | $840.3 | $890.6 |
| Total Expenditures | $698.2 | $755.1 | $857.6 | $923.6 |
| Operating Result | $7.7 | $25.9 | -$17.3 | -$33.0 |
| Beginning Fund Balance | $260.0 | $322.9 | $414.2 | $470.5 |
| Other Financing Sources | $55.3 | $65.5 | $73.5 | $65.5 |
| Net Change to Fund Balance | $63.0 | $91.4 | $56.2 | $32.5 |
| Ending Fund Balance | $322.9 | $414.2 | $470.5 | $503.0 |
Note: these figures are reported on a modified accrual basis of accounting which differs from a budgetary basis.
Conclusion
Despite running a general fund surplus and boasting a sizable fund balance, the controller maintained reservations about the city’s overall finances when presenting the ACFR. On May 15, the ACFR and near-term city finances were the subject of a post-agenda meeting of City Council.
Without the continuation of ARP funds, revenues will need to grow in future years to maintain the current levels of expenditures. However, 2024’s total tax revenue was $13.5 million less than was budgeted ($528.4 million to $541.8 million). The city’s relatively stagnant population and labor market (see Policy Brief Vol. 25, No. 13) could have contributed to the underperformance of both the property and deed transfer tax revenues.
Likewise, expenditures will need to be adjusted accordingly to avoid rapidly depleting the fund balance to help plug holes in the budget. The controller has already touched on concerns about overtime, or “premium pay,” spending in the first quarter of 2025, which could end up costing the city millions more than previously budgeted. The current administration has pushed back on the overtime concerns.
Despite these concerns, the controller maintained that the situation is “manageable” without the need to increase taxes. To help turn the city’s fortunes around, the controller recommended adopting policies which attract residents and grow the tax base.
In Policy Brief Vol. 25, No.14, the Allegheny Institute published an update on previous policy recommendations which address the city’s need to rein in spending and focus on delivering core services. That is under the purview of city policymakers and would be a better approach than dangling economic development subsidies and incentives that would be sold as a way to get residents and businesses to locate in the city.
