City Controller Says Pittsburgh Already Hurt By Drop In Parking, Other Taxes

Apr 27, 2020

In a mid-April address to the city of Pittsburgh, Mayor Bill Peduto said the coronavirus pandemic would mean “dark days” for the city’s finances. But even as there are signs that Allegheny County has limited the spread of the virus, and that reopening of some sectors of the economy may happen as early as next month, City Controller Michael Lamb agrees the city will feel the impact for some time to come.

During a recent speech to the city, Peduto said the city will have a shortfall of “tens of millions of dollars this year,” and that impacts could last for five years into the future.

The city’s 2020 operating budget is $608 million. But last week, Peduto sent a letter to the White House asking for Pittsburgh to be included with other cities for $250 billion in emergency funding as the pandemic continues. In the letter, Peduto said the city would likely cut 7.5 percent of its budget from 2020-2024, and expected nearly $100 million a year just from drops in payroll, parking, earned income and property tax receipts.
 

Lamb, meanwhile, added that the city will also likely not benefit from the amusement tax for a while either. The city began shutting down in mid-March. By the end of that month, parking and amusement taxes had only brought in 36 percent and 29 percent respectively, compared to the same time last year.

And Lamb said it’s unclear exactly how long the city will take to recover from the pandemic, even if restrictions on movement eased.

“We could lift stay-at-home orders and we could have people going back to work. But when is it going to be that people are actually comfortable going to a Penguins game?” he said. “I think people are going to be very leery about congregating in large crowds. Some of these large events that the city relies on, and that really do drive a lot of revenue to the city, I think it's going to take us a long time before we start to realize that revenue again. … I don't think that's going to happen this summer, frankly. And maybe even into the football season next fall,”

In the meantime, Lamb said cuts in staffing may be the city’s only option.

“The city’s budget is primarily payroll,” Lamb said. “And if you're trying to make cuts, you're typically talking about positions being cut. … Whether that means in our uniformed services or in our parks, our laborers, our street maintenance, you know, our environmental service folks.”

Lamb said the city hasn’t made any decisions on that yet, and officials in Philadelphia, for one, are trying to avoid large staffing cuts. But Lamb says there are few good options.

“Clearly moving forward, we're not going to be able to rely on the growth that we've seen,” Lamb said. “It is going to take us to take a hard look at the expenditure side and figure out where we can realize some savings…. The truth is the city budget right now is relatively lean. So whatever cut we make is going to be felt.”