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Pittsburgh's finances are healthy 'given the circumstances,' city controller says

Ariel Worthy

Pittsburgh finished 2021 in a healthy financial position, a sign that it has been shaking off the effects of the coronavirus with a big dose of federal aid.

City Controller Michael Lamb released the city's Annual Comprehensive Financial Report for 2021 on Friday morning. And the report shows the city brought in $24.5 million than it spent last year. The city finished with a "rainy day fund" — money set aside for financial emergencies — of $106.8 million. That's just under 20 percent of what the city spent last year: Usually it's a good sign if a city can put away 10 percent of its annual spending.

Lamb called it a "very healthy position to be in for the city" — but he added it "wouldn't have happened without the ARPA funds" provided as COVID relief to local governments by President Joe Biden's American Rescue Plan Act.

Pittsburgh was designated to receive $335 million last year; it received the first half of that money in 2021, with the rest expected to arrive next month.

But the city also showed signs that it was shaking off the virus on its own.

Revenue from the city's earned-income tax grew by 1.25 percent, to $114 million. "It's not only up from last year, but also up from pre-pandemic," Lamb said.

But he cautioned, "It's not that we're adding a lot of jobs: It's that the people who are working are making more money, working longer hours." And he noted that a payroll preparation tax — which for-profit employers pay at a rate of slightly more than half a cent on each dollar they pay in wages — had decreased by $4 million.

"Our businesses aren't paying as much as they were," he said. "That's one of the things we're going to question."

Meanwhile, as COVID vaccinations increased, revenue from the city's amusement tax bounced back, bringing in $7.5 million, up from the previous year's total of $2.5 million.

But those revenues are still down by over half from 2019, when the tax brought in over $16 million.

Pittsburgh's parking tax revenue increased by over $5 million last year, but its $36.7 million total in 2021 is only a little more than half from the $60 million it generated before the pandemic.

Parking tax revenue "is not coming back as quickly as they anticipated," said Lamb of the administration of former Mayor Bill Peduto. He said new habits like working remotely were a big factor. "If you had a job where you worked five days a week and drove to town every day, and now you're coming in three days a week, that's going to have an impact."

He also suggested that people may have traded driving for public transportation, which could impact parking revenue.

Overall, Lamb said the city "is doing well, given the circumstances." But he worried that even seemingly good news — like a growth in median income — could have a grim side. One reason median income was rising, he said, was that lower-income families are moving out of the city.

"That's a problem," Lamb said. "I know that is one of the things the Gainey administration is working on to bring affordable housing to the city, so we can work on retaining" families.