What you need to know as Pittsburgh City Council prepares to approve the 2023 budget this week

After nearly 2½ months of careful consideration, Pittsburgh Mayor Ed Gainey’s first budgetary session is drawing to a close, with a vote of approval now pending from the City Council. 

The now complete, nine-member body is scheduled to vote Monday on both operating and capital budgets that total $822 million, after a final hearing was held on Saturday on the key components.

Leading up to Gainey’s preliminary budget presentation, the city had been surveying residents for months to gather their input on how the budget should be allocated.

Overwhelmingly, the No. 1 response was a desire to spend more money on infrastructure.

The key budget proposals

The current budget includes adding a bridge maintenance unit to monitor care for bridges, as well as a walls and slopes division to take care of retaining walls and prevent landslides. 

The Department of Public Works, which handles snow removal and maintaining vacant lots and public spaces, has a proposed increase of $4 million to add staff and upgrade equipment. 

“Our budget is both an investment in improving core city services and improving the efficiency of local government, and we firmly believe that this leads to a safer city for all of us,” Gainey said during his budget address in November. 

City Council is deliberating over a budget that is $18 million more than what was initially proposed in September, with the most significant change coming from the addition of a $3 million food justice program. 

Food justice advocates have been calling for some sort of measure from the city to address food insecurity for over a year. 

Although they wanted a commitment of $10 million, a joint statement from Karlin Lamberto, the interim executive director at Pittsburgh Food Policy Council, and Ann Sanders, the public policy advocate at Just Harvest, commended the mayor for finding the funds.

“One in five Pittsburgh residents faced food insecurity before the pandemic, and the hunger rate likely only increased since then,” the statement said. “Strengthening the city’s fragile food systems is critical to helping city residents redress the bad health and economic outcomes that arise from hunger and poor nutrition.”

Members of City Council are supportive of creating the fund, but some are uneasy about where the money is coming from.

In order to make this program a possibility, the mayor’s administration is moving the $3 million from the Pittsburgh Land Bank’s allocation of $10 million. 

“I think we can do both,” Councilman Bobby Wilson said during a meeting. “I think we can do work at the land bank, but I also think we can do work to fund the food justice fund, to make sure those needs are met as well.”

Wilson, who is on the land bank board, said he was “agonizing over how to support both fully.”

The money for both programs comes from part of the city’s $335 million in American Rescue Plan Act funds, which must be spent by the end of 2026. 

“We’re setting a precedent by utilizing dollars that are going away,” said Councilman R. Daniel Lavelle. “If we did not have ARPA dollars, we absolutely would not be able to seed this fund at this time.”

Nearly two-thirds of those funds is still unspent, but city officials have said much of the money has been allocated toward specific projects. 

Transferring funds

City Council introduced an amendment last Tuesday to move some money around so that the land bank remained fully funded — a transfer from the LED street light project, a move that some council members balked at.

The street light initiative was a $16 million project proposed in 2021 to shift all of the city’s street lights to LED lights, in order to conserve energy and reduce greenhouse gas emissions. Since then, funds for the project had already been diverted to other projects such as paving and demolitions, according to City Council Budget Director Peter McDevitt. 

Councilman Bruce Kraus said he would not support this amendment, calling it a “betrayal” of his constituents. 

“My residents in Beltzhoover and Knoxville would hang me in effigy,” Kraus said. “They have advocated for improved lighting in alleyways and side streets … for the years I’ve been in here, and we’ve been promising them.”

Included in the amendment is a transfer of $1 million from the LED initiative to fund a program intended to relieve about $115 million of health care debt. 

The million dollars would go to hire RIP Medical Debt, a nonprofit medical debt collector based in New York.

If approved, the measure could relieve debt for about 24,000 Pittsburghers who received care on or after March 30, 2020, and have a household income less than four times the federal poverty level, according to the legislation.

The future of the city’s coffers

Although the city incurred some financial trouble during the early days of the COVID-19 pandemic, Jake Pawlak, the director of the management and budget office, has maintained that the city is in “a strong financial position” since the budget was first introduced. 

Pawlak said the city is still heavily relying on American Rescue Plan money, and there will have to be a “temporary tightening” of the budget in 2025 and 2026. But projected budgets presented by the mayor’s office show that the city will “fully recover from that temporary dip,” Pawlak said during a September budget presentation.

Based on the city’s projections, the cost of Pittsburgh’s debt should ease in 2027, which gives a better view of the fiscal situation. But budget officials have warned that the city will be paying off its debt until at least 2047.

Another concern about the city’s financial health revolves around what’s called the fund balance, or the city’s accumulated surplus. The city has a policy of keeping that surplus at about 10% of the expenditures, but a 2017 report called for the figure to be raised to 16.7%.

Rea Price, the deputy director of the City Council budget office, said that as the city handles the effects of the pandemic, it is “probably not in a position to raise it to that limit.” She did emphasize that this should be the city’s goal moving forward.

Further concerns were raised because the mayor’s budget proposal forecasts the fund balance dropping to 9.6% by 2026.

Lavelle expressed concern that a lower fund balance would make it harder for the city to survive problems that could arise in the future.

“We would not have been able to withstand the pandemic if we allowed the fund balance to continue in the current projected direction,” he said.