Pittsburgh’s proposed 2021 budget
The proposed operating budget will have $569.9 million in total revenues, $563.7 million in total expenditures and a positive operating result of $6.2 million. Adding that to the city’s beginning reserve balance, $48.1 million, and deducting a $7.5 million transfer to capital funding, the city projects to end 2021 with a $46.8 million fund balance. That year-end result is lower than the 10 percent minimum requirement for the fund balance but that may be permitted if a proposed ordinance on the requirement passes.
There are no tax increases in the proposed budget, a wise decision when there are difficult economic times. Compared to 2020, revenue from the city’s major taxes are projected to decrease with the exception of the deed transfer tax. The city’s largest tax revenue source, the property tax, is projected to decrease less than 1 percent. It is not clear if the 0.5 mill voter-approved property tax increase for parks will be billed in 2021.
Taxes on payroll preparation and local services and the amount the city receives from the Regional Asset District sales tax are projected to fall less than 5 percent. The biggest percentage drops next year are for parking (11 percent), wage (12 percent), amusement (31 percent) and the facilities usage fee (47 percent).
Non-tax revenues such as licenses and permits, fines, intergovernmental revenue, etc. are projected to fall 6.3 percent compared to the 2020 budget.
On the spending side, if the budgeted spending amount of $563.7 million holds that will be a 7 percent reduction from the $608.1 million approved for 2020. All departments except Emergency Medical Services (EMS) are budgeted to take a spending reduction. Nine departments are budgeted to take reductions of 20 percent or more. Based on Pittsburgh’s 2019 population estimate per capita spending would be $1,877.
Based on the count of full-time permanent positions budgeted for 2021, the city will have:
- 1,958 public safety employees, including uniformed police (898), fire (667), EMS (210)
- 512 public works employees
- 590.75 general government employees (council, clerk, mayor, controller and 15 departments/boards)
Overall,budgeted full-time staff is to fall from 3,230.55 to 3,060.75 year-over-year (169.8 full-time equivalents). Based on the budget message these are likely vacant positions. There has been a hiring freeze in place since May. Of the $563.7 million in expenditures 74 percent is for personnel (salaries and wages and employee benefits).
In April the mayor said “large cuts to spending will likely be necessary” without federal aid but offered no specifics on what would be cut. The mayor stated in his budget message that “if we do not get aid from Washington it will require the City to make $25.6 million in personnel cuts starting July 1, which is approximately the jobs of 634 City employees.”
To date the city has not laid off or furloughed any employees, and there are no specifics as to where layoffs or furloughs would fall.
As we have shown before, Pittsburgh’s staffing per 1,000 people is above that of the Benchmark City. Our 2019 analysis found Pittsburgh exceeded the Allegheny Institute Benchmark City average (Charlotte, Columbus, Omaha and Salt Lake City) on total employees by 47 percent. On police and fire, 40 and 38 percent, respectively. A headcount reduction would likely bring Pittsburgh closer to the Benchmark average, assuming those cities have not also reduced workforce numbers. Examining 2019 audited data on total governmental fund expenditures with updated population shows that, on a per capita basis, Pittsburgh spent 39 percent more than the Benchmark average.
Plenty of private sector workers have been laid off or furloughed due to the pandemic. The city should not be exempt from having to make similar choices that many businesses have made.