Peduto's Budget: More Cash For Pensions And Street Paving With No Tax Hike

Sep 22, 2015

Pittsburgh Mayor Bill Peduto submitted Tuesday a $517.5 million operating budget for 2016 to the Intergovernmental Cooperation Authority. The spending plan, which comes with no tax increases, is nearly $10 million, or 1.9 percent, more than this year’s budget. 

Under Act 47, the mayor’s office must submit a budget plan to the ICA, a state-created financial oversight board for the city, before the end of September.

“This budget further cements the fiscally responsible and transparent budget practices I introduced last year and provides city residents with the resources they expect while also keeping us on track to achieve the objectives of the Act 47 Recovery Plan,” Peduto said.

In addition to the operating budget, Peduto submitted a 2016 capital budget and a five-year financial plan.

The budgets and five-year plan propose increasing funding for police vehicles by one-third; spending $24 million on street resurfacing and facility improvements; and allocating an additional $150 million over five years to the city’s pension fund beyond its minimum municipal obligation.

“The truth in budgeting model we instituted last year is working, and making lasting changes for the benefit of taxpayers, workers and our bottom line,” he said.

Peduto noted his efforts to make the budgeting process more transparent to city residents, and in his letter accompanying the budget documents, he called on the ICA board “to conduct its budget reviews and deliberation in the most public manner possible.”

He requested that the ICA advertise its October meeting at least seven days in advance; schedule the meeting in the evening to make it easier for taxpayers to attend; conduct the meeting in City Council chambers so it can be televised; and require ICA board members to deliberate the budget in public rather than in a private meeting.

ICA Chairman Nicholas Varischetti issued a statement saying the board looks forward to reviewing the mayor’s proposed budget.

“I hope that we can have a fulsome discussion with the mayor and his team,” he said.

Varischetti said he wanted to closely examine the mayor’s proposal to address the city’s underfunded pension.

“We must all work diligently to address the ongoing pension crisis and the other complex fiscal challenges that remain for Pittsburgh to achieve long term fiscal stability -- including improving the city's business practices and addressing the long term debt situation.”

Peduto has been at odds with the ICA, filing suit in July claiming the board illegally withheld as much as $20 million in gaming revenues the city is entitled to by hosting the Rivers Casino. The ICA says it's withholding the funds until the city establishes an in-house payroll system, which Peduto says will happen by the end of the year.

The ICA has 30 days to review the budget and five-year plan, and then the administration will formally submit them to City Council.