Pittsburgh Mayor Corey O’Connor’s team is preparing a series of budget amendments to close what he says is a yawning budget deficit, fund critical expenses and allow the city to scrape through a challenging year.
Among the ways O’Connor hopes to balance an out-of-whack budget: using about $6.5 million from the city’s reserves to cover operating costs; slashing empty job positions; and tapping into specialized funds that are meant for emergencies.
The O’Connor administration on Tuesday intends to introduce the proposed amendments to City Council, which must approve them.
Earlier this month, the new mayor raised alarms about Pittsburgh’s $693 million budget, arguing it fell $30 million to $40 million short of what was needed and would be unable to adequately fund a wide range of expenses including fuel, water bills, health care costs and bridge maintenance.
Assessing the city’s reserves from a position of desperation concerned Controller Rachael Heisler, an independent fiscal watchdog.
Heisler, who has issued public warnings for the past two years about the precarious nature of Pittsburgh’s finances, said it’s “preferable” to acknowledge up front that the city will tap into that fund — as opposed to simply overspending the budget and being forced to draw from it anyway — but urged council and the mayor’s office not to depend on the fund balance in the years ahead.
“The unreserved fund balance should not be a revenue substitute,” she said in a written statement Monday.
Dan Gilman, O’Connor’s chief of staff, said the administration did not intend to use the reserves to make ends meet in future years.
“Think about it like your personal finances,” Gilman said. “You build up a savings account, so when you need a major home repair or a family milestone hits that you don’t anticipate and isn’t a continual part of your budget process, you have a savings account to draw on. That is what the city does as well.
“Given the finances that we inherited in January, as well as some national and international trends, we have an emergency home repair. That’s why you have a rainy day fund. That’s what it’s there for.”
The budget, Gilman pointed out, will be a little more flexible next year when the city’s debt payments drop by about $30 million.
The expense side
The O’Connor administration is also expecting $8 million more than initially budgeted in payroll preparation tax revenue. Gilman said there has been a “bump in increased collections” so far this year.
Acting Office of Management and Budget Director Rea Price said the city also is raking in some payroll preparation tax this year that should have been collected last year but was delayed.
Price said the administration will ask council’s budget office and the controller’s office to recertify an updated revenue projection.
Other budget amendments cut vacant jobs and aim to fill budgetary gaps the O’Connor administration identified.
On the expense side, the amendments will include $3.8 million more for bridge maintenance, $3.7 million more for roof and boiler replacements, $2 million more for vehicle repairs, $7 million to partially restore a fund for voluntary employee benefits that had been depleted in recent years and an additional $6 million for retiree health care.
Another $2.2 million would be sought to cover costs associated with a massive January snowstorm that forced crews to work overtime and the mayor to call in outside contractors to help.
The O’Connor administration also wants $8 million for legal judgments regarding the facility usage fee, a controversial tax on out-of-town professional athletes and performers that the Pennsylvania Supreme Court struck down last year.
An additional $5.75 million would be earmarked for other legal judgments after a legal settlement from 2025 was left unpaid until this year, eating up a large chunk of the 2026 allocation.
And yet another budget amendment would add over $650,000 to pay for staff at Oliver Bath House, a newly reopened indoor swimming pool in the city’s South Side neighborhood. Gilman said the budget had not initially included money to staff the pool, which had been closed for years.
More changes would add a new job position — head of wellness — for the police bureau. Chief Jason Lando has called for hiring a staffer who would be dedicated to supporting officers’ mental health.
The amendments also reduce spending and revenues tied to an automated red light enforcement system, reflecting the fact that such a program won’t be in place until about halfway through the year.
Council in December made sweeping revisions to then-Mayor Ed Gainey’s budget proposal, tacking on a 20% property tax increase in an effort to cover public safety overtime and vehicles.
Now the O’Connor administration finds itself in the position of having to revise council’s revisions.
