Amid ongoing concerns from various city officials about Pittsburgh’s financial health, Mayor Ed Gainey released his preliminary 2025 budget Monday afternoon, with a focus on “maintaining funding for vital city services.”
The operating and capital budgets together total about $774.3 million — a decrease of about $70.4 million from the 2024 budget. The 2025 preliminary budget doesn’t include any tax increases or “any reductions to funding for critical services,” according to Jake Pawlak, the director of the Office of Management and Budget.
“[This budget] builds on areas of investment that Mayor Gainey has prioritized in his last two budget proposals, including funding for core infrastructure and support for various initiatives to rebalance the way we deliver public safety services.”
Even with a smaller budget, the city’s fund balance, which legally must remain above 10% of the expenditures, has shrunk. In 2024, the fund balance sat at about 25.5% and in 2025 is projected to be about 21.9%. Future projections in the budget show the fund balance shrinking for the next five years, until it reaches 10.01% in 2029.
“We have confidence based on that calculation that our plans for the moment remain within the parameters established for us by code,” Mr. Pawlak said during a news meeting Monday evening. “But every year, we’re looking to adjust to make sure that … we’re appropriately accounting for what we need to do to maintain the city’s financial health.”
He explained that a lot of ongoing, external factors impact the budget and his office “continually adjusts” to ensure that the city is staying near that 10% threshold.
The capital budget, which is where funding for things like street paving, bridge maintenance, facility improvements and other construction projects comes from, saw a reduction of about $41.3 million.
In 2024, anticipating lean years ahead, the mayor’s office decided not to begin any new capital projects, and to use the funds on hand to complete ones that had already begun. The administration took a similar approach for 2025, according to Mr. Pawlak.
“There is a very sparing approach to adding new projects, only where we’ve identified really critical needs over the course of the year to complete something new,” he said.
That reduction can also be attributed to the timeline of some of the projects, he said. In some instances, work that was scheduled to be completed in 2025, won’t be done until 2026, so those funds were moved to the 2026 budgets.
“As we continue to employ restraint in the way that we’re growing the capital budget … we have been able to find ways to increase funding or a level of funding for some really critical categories,” Mr. Pawlak said, pointing to the increased funding set aside for street paving.
In the 2024 budget, street paving was slated to see a large budget cut, but this year will actually have an increase of about $3.3 million.
In addition to street paving, other areas of the capital budget like demolition and bridge maintenance, received an increase in funding. The Department of Mobility and Infrastructure also saw an increase in its budget. City police and the mayor’s office both took budget cuts.
The budget also proposes that the Bureau of Police reduce the number of officers it is budgeted for from 850 to 800. Policing discussions since the pandemic have centered around how city officials feel there are not enough officers in the force. As of the end of August, there were 763 officers including command staff, assistant chiefs and the chief.
“The budget proposal continues efforts to rebalance public safety services between police, civilians, and social workers,” the mayor’s office said in a statement.
With the reduction in officers, the city has added 16 civilian employee positions to the police department and 10 social workers to the Office of Community Health and Safety, which operates under the Department of Public Safety.
“New police civilian positions will allow sworn police officers currently assigned to administrative tasks to return to patrol and investigations, while increased OCHS staffing will expand the co-response program to all zones and all shifts, ensuring that responses to mental and social health crises are addressed by appropriately trained professionals rather than continuing to drain on police resources and time,” the statement said.
The administration decided to lower the budgeted number of officers because the rate of replacement is slower than the rate of officers leaving for other employment or retiring, Mr. Pawlak said.
This is the second budget under Mr. Gainey in which the budgeted number of police were reduced in an effort to have the budget more closely aligned with the number of officers that are actually on the force. In 2023, the bureau was budgeting for 900 officers, despite being well below that number.
“We are establishing that target number 800, which is still an increase … over the number of officers on the street today by continuing to invest in our academy, and in fact, this budget continues to project multiple police classes per year and spending on recruitment,” Mr. Pawlak said.
At the end of August, Mr. Gainey and Mr. Pawlak hosted a “fireside chat” to present updated revenue projections for the next five years. Despite confidence in the city’s financial health, the projections closely resembled “worst case scenario” projections established by the city controller earlier this year.
The 2025 budget shows minor tweaks to those projections from last month, after a follow up meeting with City Controller Rachael Heisler and the city’s Finance Department and Office of Management and Budget.
The minor changes were a result of data from July and part of August that was not available previously. Ms. Heisler has certified the revenue projections in the 2025 budget for the next five years.
Earlier this year, Ms. Heisler raised concerns about the city’s revenue projections with the growing number of Downtown properties seeing a decrease in their property values, which will lead to a decrease in the property tax revenue the city can collect.
In addition to revenue projection concerns, 2025 also will be the first year that the city will not have federal COVID-19 relief funds to help support the operating budget.
The budget will continue to see minor tweaks over the next few months before Mr. Gainey officially presents his budget in mid-November. After that, City Council will hold a series of public hearings with various city departments to discuss their budget allocations.
The budget must be approved by the end of the year.
Councilman Bob Charland, who has also been vocal about his concerns for the city’s financial health, said in a social media post that as part of his review of the budget proposal, he plans to focus on four key areas: financial stability, capital projects, basic city services and co-responders for police.
“There is no denying that the city is in a precarious financial state,” Mr. Charland wrote. “Although credit-rating agencies score the city high, they calculate on our future ability to raise taxes and cut spending if needed, not our current fiscal health.”
Mr. Charland also said that his office has submitted more than $10 million in capital budget requests for “essential infrastructure projects” like landslide remediation and is pushing for things like anti-litter inspectors and expanding the city’s co-response program.
Both the inspectors and more social workers for the co-response program have been included in the 2025 preliminary budget.
First Published: September 30, 2024, 9:33 p.m.
Updated: October 1, 2024, 12:13 p.m.
