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Early 2024 financial forecasts show good signs for Pittsburgh schools, though much can change

A doormat reading Pittsburgh Public Schools.
Katie Blackley
90.5 WESA

Changes to Allegheny County’s property assessment appeals process could make school district budgets more predictable, according to officials with Pittsburgh Public Schools.

County council members voted last week to move up the date by which property owners can appeal their 2025 tax values. Pittsburgh Public Schools solicitor Ira Weiss told board members Monday that the new date, October 1, will allow the district to better prepare for potential tax refunds and reductions in revenue.

“It won't solve the problem of what the results are going to be, but we'll know what the volume is,” Weiss said.

The district owes nearly $7 million in property tax refunds for the 2022 and 2023 tax years, according to Monday night’s budget workshop.

The county’s Board of Property Assessments and Appeals Review is still working through appeals for tax year 2024. Close to 1,200 assessment appeals were filed, representing more than $15.6 million in annual tax revenue for the school district.

Pittsburgh Public Schools is pursuing a court-mandated countywide reassessment, though Weiss says that process could take years to complete.

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Early projections for 2024 show the district’s financials are faring better than expected, in part due to federal pandemic aid and state grants. The initial budget school board members passed last year included a nearly $30 million operating deficit; that figure has since shrunk to roughly $2.2 million.

But even with better-than-expected financials this year, early forecasts show a deficit of $16 to $18 million in 2025 and 2026, when the district’s fund balance could also drop below the level allowed under board policy.

District chief financial officer Ron Joseph said Pittsburgh Public Schools must now examine how to reduce spending to protect its reserves. He said that could include changes to overtime pay, contracted services and software allocations.

While Joseph reiterated several times that administrators are not yet recommending a tax increase, budget projections factoring in the maximum 5.3% millage increase show a somewhat sounder future for the district.

But “even raising taxes by the maximum amount allowed this year is still not going to help us balance the budget this year or in 2025 or 2026,” board director Emma Yourd pointed out.

Joseph also noted that the district’s financials could change as lawmakers in Harrisburg hammer out the state’s 2024-25 budget.

Funding for public education is a focal point of the ongoing budget negotiations. Joseph said that if the process results in another months-long budget impasse, school districts could again face revenue delays.

“Last year, we were pretty much on high alert starting in August and starting to do cash-flow scenarios to see where we would be projecting a budget crunch,” he added.

Without state funding on hand, Joseph said Pittsburgh Public Schools could face difficulty in making regularly scheduled payments, such as its debt service principal and tuition payments due to charter schools come September.

“We're still very early in the year,” Joseph said. “A lot of things can improve and a lot of things can get worse.”

Jillian Forstadt is an education reporter at 90.5 WESA. Before moving to Pittsburgh, she covered affordable housing, homelessness and rural health care at WSKG Public Radio in Binghamton, New York. Her reporting has appeared on NPR’s Morning Edition.