City budget reopened due to $30M-$40M deficit
Add Axios as your preferred source to
see more of our stories on Google.
Photo illustration: Axios Visuals; Photo: Photo: Library of Congress
Mayor Corey O'Connor said Pittsburgh's budget will be reopened to address a looming $30 million to $40 million deficit.
Why it matters: The city raised its property taxes late last year to address budget shortfalls, but that additional revenue isn't close to covering costs.
The big picture: O'Connor told reporters at a press conference Thursday that he's not considering raising taxes, laying off city workers, or cutting critical services to cover the deficit.
- He said the city is looking at a series of financial maneuvers — like expiring bonds and not filling vacant positions — to close the shortfall.
Reality check: The projected budget deficit is larger than the $27 million in extra revenue the city brought in after approving a 20% increase in property taxes.
What they're saying: The budget passed last year under former Mayor Ed Gainey had a lot of "false assumptions" about revenue projections, O'Connor said.
- "We knew taking this job that we were going to walk into a situation where we would have to tighten our belts. But the reality is much worse than we thought," he said.
By the numbers: The city ended 2025 with an $8.6 million operating deficit, O'Connor said.
- Last year, Gainey predicted the city would end the year with a $3.2 million surplus.
- The city is draining its rainy-day fund to cover the budget deficit, but O'Connor said the path is unsustainable. His office projects the fund will shrink from $160 million to $84 million within five years.
Between the lines: The city has a series of underfunded items this year, driven by rising costs in health care, fuel and inflation, O'Connor said.
- Health care costs are $9 million higher this year than initially budgeted. In 2027, they will be $4 million higher.
- Fuel costs for the city fleet will cost $500,000 extra this year.
- The city's retiree health care trust fund will cost an additional $6 million this year.
State of play: Overtime pay for EMS, police and other city employees is ballooning — $21 million over last year — Councilman Anthony Coghill (D-Beechview) told TribLive last month.
- With the city hosting several large events this year, overtime pay will become an even bigger concern, especially around the Fourth of July, O'Connor said.
- Yes, but: Pittsburgh will get an estimated $2 million in state funds to cover overtime for the NFL draft, O'Connor's chief of staff, Dan Gilman, said.
What's next: The budget will be reopened in the coming weeks, but O'Connor did not specify how long it might take to balance it.
- "We cannot solve this financial crisis without being honest and transparent with the public," he said. "We didn't get here in a year. The solution isn't going to happen overnight."