At his annual budget and state of the city address, Pittsburgh Mayor Ed Gainey, while presenting a budget with no tax increases, reiterated the success of his first three years in office in what closely resembled a campaign stump speech.
Tuesday’s budget address took a similar tone to his re-election announcement that happened in September. Just like in September, on Tuesday he hit on achievements and issues he oversaw such as the Fern Hollow Bridge collapse in 2022, increased pay for police officers in a contract the city and the union negotiated in 2023, and last year’s decrease in homicide rates.
“I am committed to building a city for all where government works, and it works for everyone,” Mr. Gainey said. “This commitment fills me with purpose and drives me forward, even on the most difficult days and in the face of the most daunting challenges…I know that whatever fate throws at us, if we all stand together, Pittsburgh will rise to the occasion.”
The speech, which is typically an opportunity for mayors to present their budgets and talk about investments from the past year, along with the state of the city, received criticism from some city officials for its tone.
“Mayor Gainey must have thought his campaign announcement did not get enough attention because that is the only reason why, in a yearly budget address, we’re hearing about initiatives from years ago…” Councilman Bob Charland said in a statement. “I didn’t hear anything about how we’re going to clean up the city or find solutions for homelessness in 2025.”
City Controller Rachael Heisler said that while she wished there had been “more attention devoted to the conversation around the future of city finances at today’s budget address,” she supports several of the initiatives proposed like a focus on eliminating pedestrian fatalities and improving workers’ safety.
The 2025 budget continues on a path similar to the one laid out by the 2024 budget, focusing on core city services by investing in things like street paving and expanding public safety initiatives like street calming and automated red-light enforcement.
In his speech, Mr. Gainey compared the Pittsburgh of the past – stuck under state financial supervision, cutting services and laying off workers – to the Pittsburgh of today. Even though the city is once again facing some financial challenges, Mr. Gainey said he remained optimistic about the future.
“Pittsburgh: even though our country is on the brink of an enormous transition, and there are likely challenging times ahead, I am confident that the future of our city is bright,” Mr. Gainey said Tuesday. “I am confident because of all we have accomplished together over the past three years, the challenges we have already overcome, and the course that my administration, this council, and our citizens have charted for our future.”
It wasn’t until near the end of the nearly 90-minute speech, Mr. Gainey more substantially touched on the city’s finances and concerns that other officials have raised in the past year.
“I’m proud to share that even in the face of significant headways, some of which are happening to cities across the nation and others which are unique to our region, the city’s financial condition is strong,” Mr. Gainey said Tuesday.
The 2025 budget includes adding eight new anti-litter inspectors, something Mr. Charland had called on the city to do earlier this year
Mr. Gainey also touched on the issue of the growing number of unhoused people in Pittsburgh, and the efforts the city has implemented to increase the amount of affordable housing, particularly through the Downtown Revitalization Project.
Building more affordable housing units was also a focal point of Mr. Gainey’s re-election announcement.
During both speeches, Mr. Gainey referenced the city receiving 12 competitive low-income housing tax credit deals over the past three years to build more affordable housing units.
“For the past three years, my administration has been working hard to rebuild city government as we emerge from the dual crisis of financial distress and the COVID-19 pandemic,” Mr. Gainey said Tuesday morning.
The 2025 proposed budget totals $785.2 million between the capital and operating budgets, an increase of about $11 million from the preliminary budget Mr. Gainey presented at the end of September. There were no drastic changes in the budget presented Tuesday compared to September’s preliminary budget.
During Mr. Gainey’s address, he reiterated that though the city was still recovering from the long term effects of being under state financial supervision, the city is seeing an upswing in providing core city services and expanding staff and capacity.
Over the past year, city officials have raised concerns about the state of the city’s finances, with multiple revenue sources facing drastic decreases, increased debt service payments and the expiration of the federal COVID relief funds, which have been helping support the operating budget.
However despite those challenges, the new 2025 budget calls for increases to funds for city services like street paving and demolition for abandoned and blighted buildings.
The budget proposed a $3.6 million increase to the street paving, bringing it to $20.6 million, even after last year’s projections showed a decrease in paving funding.
Mr. Gainey said that using a “forward thinking approach,” has allowed the city to “solve problems and make change without always needing to add more money to the budget.”
One such example is in the police bureau. With a dwindling number of officers, the city has lowered the budgeted number of officers from 850 to 800. But in order to keep more uniformed officers on the street, the budget has added 16 civilian employee positions within the bureau to handle administrative tasks.
Overall, the police bureau is proposed to have a decrease of about $2.4 million compared to the 2024 budget — bringing the bureau to a total of about $120.7 million.
Jake Pawlak, the director of the office of management and budget, said after the mayor’s speech that there was not currently money set aside for another nationwide search to find a new police chief, after the abrupt retirement of Chief Larry Scirotto. Prior to hiring Mr. Scirotto, the city, paid a third-party consulting firm $80,000 to narrow down candidates.
The budget also added new positions such as a plumber foreman, in response to concerns from city residents and Ms. Heisler after it was found that there was only one plumber on staff. The position is salaried at about $68,700, which will be in addition to the three plumbers the city budgets for.
City Council Budget Director Pete McDevitt said that Mr. Gainey’s proposed budget was feasible and “responsible.”
“We’re going to be able to pay all of our bills,” he said. “We knew we were going into tight years fiscally and now we’re here. We don’t have to lay anybody off and we’re not making drastic cuts to city services. It’s a responsible budget for the fiscal austerity that we’re facing right now.”
Mr. Gainey did concede that the upcoming debt payments and the expiration of COVID-19 funding, will “limit our ability to make new investments” – the 2025 capital budget includes no new projects – but “two tough years will not stop us from continuing our mission of rebuilding our government and making it deliver for you.”
In an email sent to other city council members, Erika Strassburger, who chairs council’s finance committee and is a member of joint task force on city finances that Mr. Gainey created earlier this year, lauded the new budget for things like meeting the city’s fund balance and debt service requirements for next year and having “a conservative realistic revenue forecast.”
But Ms. Strassburger also outlined some concerns.
“In my view, the most troubling line item in the entire document is the working assumption that we will continue to collect less and less real estate tax revenue as time goes forward,” her email said. “Historically, real estate revenues have been the cornerstone of our city finances and we cannot permit them to enter an indefinite state of decline.”
In the last year, the city has seen a decline in property tax revenue as a result of lowered property assessment values as a result of a lowered rate used to calculate taxable value. That number is anticipated to fall again next year, which is beneficial to property owners but not to taxing bodies that rely on the revenue.
The change in the rate has caused a drastic decrease in the tax rates of major Downtown properties.
Over the next month and a half, city council will hold budget hearings with each of the city’s departments to discuss their specific budget allocations before voting on the budget by the end of the year.
First Published: November 12, 2024, 5:00 p.m.
Updated: November 13, 2024, 6:44 p.m.