New Pittsburgh Mayor Corey O’Connor must hit the ground running by spearheading five action items that represent the first steps to improve the city’s financial, economic and business climate situation to promote private-sector growth and healthy finances, says the research director of the Allegheny Institute for Public Policy.
“In order to address those concerns, much of 2026 should be spent on cost- saving measures that were placed in front of City Council,” says Eric Montarti.
“The new mayor must review these proposals and work to make them a reality,” he says, adding a tax-raising new budget allowed to become law by departing Mayor Ed Gainey without his signature can be amended per the Home Rule Charter.
The O’Connor administration bows with a property tax increase that raises the city’s millage by 20%, from 8.06 to 9.67 mills. As a result of City Council amendments, Montarti notes the 2026 operating and capital budgets are larger than what was proposed in November.
“The most recent property tax increase passed by city officials was in 2015 (an increase of 0.5 mill, or 7%),” he reminds. “In 2017, city officials approved an increase to the deed transfer tax (an increase of 1 percentage point). Voters approved a 2019 ballot question creating the parks trust fund, which included a 0.5-mill property tax levy.”
Now to those five action items the Allegheny Institute first proposed last April:
• Institute a hiring freeze — Realizing that excessively high numbers of employees per resident lead to very high comparative expenditures per resident (as noted in Policy Briefs comparing Pittsburgh to the Benchmark City) and higher tax burdens for residents and businesses, the think tank recommends a hiring freeze to allow retirements and normal attrition to begin the process of dramatically slowing the rise in employee costs.
• Examine all departments and offices for increased efficiencies — The Allegheny Institute recommends a major independent study of how more efficient (and less costly) cities operate across all departments with the goal of finding ways to improve workflow and productivity. This should include, and be incentivized by, a bonus program for employees who suggest implementable cost savings and/or productivity enhancements. An executive order, signed last week, designed to streamline the permitting process for projects large and small is a great start.
• Outsource non-core functions — The institute recommends the city explore outsourcing non-core functions to the private sector or perhaps the county or an authority. Given the problems with snow and waste removal services and condition of the fleet, that should be a priority.
• Push for the inclusion of a Taxpayer Bill of Rights in the Home Rule Charter — A good addition to the charter would be an article requiring that general fund expenditures shall increase no more than the rate of inflation, that any surplus tax collection above and beyond the amount necessary to meet general fund expenditures shall be returned to the taxpayers of the City of Pittsburgh and that each city department, agency, authority and function is subject to periodic sunset review to determine the necessity of continuing said department, agency, authority or function.
Additionally, there should be no tax rate increases without a three-fourths vote of City Council or by referendum, preferably the latter. Having that in the charter could have made the millage hike more difficult to achieve and encourage spending cuts.
• Don’t support anti- business measures or subsidies for specific businesses — The think tank recommends the mayor oppose any measure that seeks to impose a stricter regulatory environment on businesses, oppose using city-based incentives for favored businesses and to look closely at zoning, planning and permitting processes to see if those are streamlined and friendly to business and, if not, initiate changes to make the processes friendlier and less costly.
“The recommendations … provide practical steps to move Pittsburgh from a path of stagnation to sustainable economic growth,” Montarti concludes. “An expansive public sector, burdensome regulatory climate and oppressive tax environment are all antithetical to a successful future for Pittsburgh.”
