City School Board Rejects Proposed Tax Increase, Approves $670M Budget

Dec 17, 2020

The Pittsburgh Public Schools Board of Directors on Wednesday approved a $673.8 million 2021 budget. But the board declined to raise taxes on district residents in an effort to fill a widening budget deficit.

The board greenlit the spending plan after a lengthy discussion about how the district will cut costs in the coming year.

PPS is now operating with a $39.5 million deficit which will have to be covered with its dwindling fund balance.  Superintendent Anthony Hamlet said his administration will propose cuts in January and February.

Hamlet’s request for a tax increase was rejected. Board members Pam Harbin, Devon Taliaferro and Sylvia Wilson voted for the increase. Terry Kennedy abstained while Kevin Carter, Cindy Falls, Sala Udin, Bill Gallagher and Veronica Edwards voted against the increase.

Those who voted against the increase attributed their decision to their constituents’ financial instability caused by the pandemic. Gallagher said the board and administration should have made cuts throughout the year to make up for the deficit.

“And we wonder why people want to leave the city,” Gallagher said. “This is not the year to increase taxes on the people of Pittsburgh.”

Pam Harbin, who voted for the tax hike, said the board's failure to approve the increase was a missed opportunity.

“These are not easy decisions. I get it,” she said. “I also know that charter school costs are out of control. Nobody is brave enough in our legislature to say we should do a moratorium on charter school expansion or new charter schools.”

Charter school payments did grow this year according to Joseph. The payments to schools that educate Pittsburgh students have grown for several years along with special education costs and retirement benefits.

The administration proposed a 2.6 percent millage rate increase this year, the most the district could ask of property owners without state permission. The proposed increase would have amounted to an additional $26 per year to residents' tax bills. Property owners in the city now pay $995 for every $100,000 of assessed property value. That will remain the same next year. 

The administration first publicly spoke of the tax increase two weeks ago during the board’s agenda review meeting. Board member Terry Kennedy said she has had to defend the district's need for a tax increase, as well as explain where the dollars would go.

“I honestly do not know,” she said. “We have not had a plan we can follow. A plan has not been presented until now.”  

Ahead of the board vote, Hamlet presented a timeline of when reductions would be proposed to the board. The administration, according to the presentation, will propose workforce and resource reductions in either January or February. The presentation also included details on a proposed attempt to “recapture” revenue that was diverted to the city of Pittsburgh when it was struggling financially.

Both the City of Pittsburgh and PPS charge an earned income tax on city residents. Fifteen years ago, when the city was on the verge of financial collapse, state legislators began diverting some of the district’s revenue to the city. Last year the district sparked controversy when it first suggested approaching the City for what the district estimates to be about $20.5 million.

Hamlet and other administrators have said that it will take a combination of cost-saving measures and increased revenues to address its deficit.