Report commissioned by Wilkinsburg group projects city schools would net money from merger
A leading proponent of annexing the Borough of Wilkinsburg into the City of Pittsburgh released a report Thursday saying the move would help the city's school district.
The Wilkinsburg Community Development Corporation commissioned Public Financial Management for the analysis.
The report finds that Pittsburgh Public Schools could expect to net between $550,000 and $760,000 (a midpoint of $660,000) by taking on the Wilkinsburg district. To put that into perspective, the PPS 2022 budget is $668 million with a $27 million deficit.
The analysis projected low-end and high-end estimates for the impact of a school merger on PPS. At the low end of the range, the report says the city district could incur an additional $27 million in costs but $27.7 million in added revenue. The higher estimate envisions the district paying an extra $30.9 million to educate Wilkinsburg children, but reaping $31.4 million in new revenues.
The difference between the two ranges is driven by varying estimates concerning tax collections and the number of Wilkinsburg students who will attend charter schools.
A key factor in driving costs, the report projects, would likely be the expense of raising the salary and benefits of Wilkinsburg employees to the same amounts received by their better-compensated counterparts in the city. Meanwhile, the Pittsburgh district's tax structure — which has a lower property tax rate but a higher wage tax — would have mixed effects on Wilkinsburg residents. The report estimates that most homeowners in Wilkinsburg would have a lower net tax bill, though renters in the community would be worse off. But it notes the impact would vary widely depending on each taxpayer's earnings and home value.
As for the fiscal impact on the district, the report's figures do not include one-time costs, like the unemployment insurance for Wilkinsburg employees who are not hired by PPS, and the cost of repairing Wilkinsburg school buildings. It also doesn’t include one-time cash infusions, like the city schools absorbing the Wilkinsburg' district's fund balance and unspent amounts of federal pandemic relief money. Public Financial Management estimates those transfers could total as much as $17 million. The analysis estimates that PPS would net about $11 million.
In December, representatives from both school districts said that they had largely been left out of the conversation and that there were many unanswered questions. The Wilkinsburg School Board approved a resolution to begin talks with PPS, saying “the school board does not wish to be a passive element of annexation discussions, but rather wishes to engage any and all appropriate parties to assess the best path forward.”
Pittsburgh City Council has until April 5 to decide if it will allow the annexation process to proceed. But there appears to be little appetite for doing so: Last week, Council President Theresa Kail-Smith introduced a bill that if passed would end the effort.