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Politics & Government

Peduto to Gov. Corbett: Pittsburgh Should Remain Under Act 47 Oversight

Updated 3:53pm 1/8/2014

The City of Pittsburgh has been under Act 47 state oversight since 2003. Back then, Pittsburgh was operating with a debt burden of more than 20% of its operating budget, pools and recreation centers had to close and hundreds of city employees, including police officers, were laid off. In late 2007, former Mayor Luke Ravenstahl along with Act 47 coordinators said the city was ready to be released. Even at that time, then Councilman Bill Peduto said the city wasn’t ready.

Now, Mayor Peduto is asking Governor Tom Corbett to keep Pittsburgh under Act 47 oversight, to allow his new administration to work with Act 47 coordinators and the Intergovernmental Cooperation Authority (ICA) on a final recovery plan. That plan, said Peduto in a letter to the Governor, would be an exit plan from Act 47 that would leave the city truly fiscally sound and ready to move forward. He said it’s not ready to move forward now, but things can change by 2018.

“But really these next four years and the next four budgets, between 2014 and 2018, will determine whether the city is once and for all in the position of having a sustainable financial outlook for the next 10 to 20 years or if we simply exist with our head barely above the water.”

In the letter Peduto said, “The fiscal sustainability of Pittsburgh is too important to rush out of state oversight at this critical juncture. We must be deliberate and careful as we chart a path to fully emerge from oversight and begin to rebuild city government from the ground up.”

Peduto said there are several items that must be addressed in the final recovery plan including pensions, debt, and items from the 2004 recovery plan that have not been implemented. He also recommends establishing a long term pilot program with Pittsburgh’s nonprofits that would create a payment in lieu of taxes structure.

“Each of these different parts are like pieces of a puzzle that each have to fit in together,” said Peduto. “And we’re only able to get to all of them through the powers that are given to us through Act 47.”

Peduto said he is meeting with Act 47 coordinators on Friday and City Council has until June 30th to approve a plan that would be the final exit strategy.

The ultimate decision on whether to release Pittsburgh from Act 47 status is be up to the state Secretary of Community and Economic Development. When the city is released, it will still have to answer to a second panel, the ICA, which was created by the state legislature to help Pittsburgh manage its finances.