RELEASE: Pittsburgh Budget & Policy Center Publishes New Analysis of Pittsburgh’s 2022 Proposed Budget

“Pivoting to a Moral Pittsburgh Economy: New Mayor, New Opportunities”

Pittsburgh, PA — The Pittsburgh Budget and Policy Center today released a new, in-depth analysis of Mayor Peduto’s proposed $770 million combined operating and capital budget for 2022 with no tax increases, slated for consideration by City Council this coming Monday. This report analyzes the mayor’s 2022 proposed budget, including recommendations for the incoming administration and City Council related to these areas: $335 million American Rescue Plan funds, the police budget, workforce development, and affordable housing.

View the virtual press conference here.

In opening the press conference, Stephen Herzenberg, executive director of the Keystone Research Center, said, “With a new mayor will come new opportunities to pivot to a moral Pittsburgh economy and budget that address the most pressing human needs in the pandemic and reduce longstanding inequities. On public safety, housing, and workforce training, we show how Pittsburgh can seize the historic opportunity to improve people’s lives in tangible and transformative ways.”

On the topic of police funding, report author and senior policy analyst for the Keystone Research Center, Diana Polson, said, “The budget is a moral document showcasing in dollars what, and who, we prioritize. The city spends $1 out of every $5 taxpayer dollars on the Bureau of Police, which has become the catch-all responder for many of our city’s crises. But not all problems are best solved by police. The more we invest in communities—affordable housing, food, public transportation, good jobs—the less reliance we will have on the police. With the establishment of the Office of Community Health and Safety, the nearing retirement of many uniformed police officers, and a new incoming mayoral administration, we have the opportunity to reimagine what public safety means to us as a city and plot a course forward so that all our residents can thrive and feel safe and secure.”

As it relates to housing, another issue analyzed in the report, co-author and Pittsburgh Budget and Policy Center policy analyst Nthando Thandiwe noted that “Pittsburgh was crowned the third most livable city in 2021 but unfortunately this does not capture the reality of all residents. Historical inequalities by race and income have persisted in a city where the Black median income is more than 30% lower than the Pittsburgh median income and more than half of the renters in the city pay more than 30% of their income towards rent. The receipt of the American Rescue Plan funds has given Pittsburgh the opportunity to help those most in need. To truly make Pittsburgh a livable city for all, we must make historic investments in affordable housing.”

Commenting on city workforce training initiatives, Herzenberg concluded, “Pittsburgh’s workforce board is a national leader, placing a growing number of diverse and low-income residents in good jobs in construction, banking, information technology, and now healthcare. The city is also poised to use federal resources, including for traditional and climate infrastructure to scale these programs and rebuild the city’s middle class.”

Recommendations from the analysis include:

How to make the best use of ARP funds:

Given the unprecedented opportunity ARP funds provide to the city, the new mayor should consider his mandate for change and re-examine ARP allocations. In particular, Mayor-Elect Gainey should

• reopen public comment/discussion about how the pandemic has most impacted the people of Pittsburgh and how ARP funds should best be used to address the impact.
• use the public input to create a spending plan that addresses these pressing needs, helping Pittsburgh to become a more equitable city.
• create more transparency by communicating with the public about how decisions were made, how public input was considered, and how funding will be used to address Pittsburgh’s most pressing pandemic-related challenges; it should also provide regular updates on the statuses of funding and projects.

How to address revenue shortfalls in 2025 after ARP funds run out:

The city should make sure UPMC and other large, nonprofit institutions pay their fair share. UPMC continues to pay few property taxes because of its status as a purely public charity, which means the city is missing out on an estimated $40 million in revenue every year.

The city should join others across Pennsylvania and advocate for the “Harrisburg handcuffs” to be removed, allowing Pittsburgh to tax income from wealth. Currently, income taxes in Pittsburgh only tax income on wages and salaries, not on “income from wealth,” such as dividends and capital gains, which are received primarily by the rich. As it stands now, preemption laws at the state level prohibit Pittsburgh from implementing such a tax, hindering the city’s ability to ensure those who can pay the most are paying their fair share in taxes.

On policing. The city should do the following:

• Identify and act on opportunities to redirect funds from the Police Bureau to other community priorities, including increased funding for the Office of Community Health and Safety and affordable housing.
• If the Police Bureau were funded at the same level it was in 2016—that is, 18% of the operating budget—Pittsburgh could redirect more than $10 million to other community priorities.
• With 248 of Pittsburgh’s police officers eligible for retirement this year, there is an opportunity for City Council and the incoming mayor to rethink how to best staff the city’s Bureau of Police, the Department of Public Safety, and the Office of Community Health and Safety in the effort to make all our communities safe and secure without layoffs.
• Continue to implement and update progress on the recommendations from the Community Task Force on Police Reform.
• Continue to build the Office of Community Health and Safety. Getting the Office of Community Health and Safety set up and working as smoothly as possible should be a major priority for early 2022 so the city can pilot, refine, and iterate the program. Expectations are that more resources will be needed for the Office to meet the kind of call volume it expects to have.
• Increase transparency on the budget regarding police expenditures.
• Strengthen civilian positions in the Police Bureau, including by raising wages and salaries, so the city can hire and retain civilian staff, and uniformed police officers no longer need to perform jobs that should be performed by trained civilians. The city should aim to, at least, rehire the 20% of civilian staff lost during Peduto’s tenure.

On housing. Safe, affordable housing is a basic need for every Pittsburgher, yet there are great barriers for all residents, especially Black residents, to access, afford, and be able to stay in safe housing. The new mayor should take these steps:

• Create a housing czar position that carries the authority of the mayor and is housed in the Mayor’s Office. This person would be responsible for ensuring that city departments and the authorities responsible for housing and community development work together to achieve a unified vision for increasing affordable housing in the city and supporting renters and homeowners in need.
• Leverage the Pittsburgh Land Bank (PLB) and increase funding. A well-funded PLB can help streamline the title process to move properties out of property reserve to eliminate blight.
• Establish a pre-filing eviction diversion program similar to Philadelphia’s. The City of Philadelphia’s Eviction Diversion Program is for landlords with tenants who have had difficulty paying rent due to COVID-19-related hardships. It enables landlords and tenants to arrive at agreements that work for both parties without having to go to court. The benefits of diversion and mediation help tenants avoid eviction and landlords avoid vacancies and unit turnover costs.
• Revisit American Rescue Plan fund allocations and use more for investments in affordable housing. Housing advocates asked the city to use 10% of Pittsburgh and Allegheny County ARP funds to preserve and produce 10% of the 20,000-unit affordable housing shortage. The new administration should consider this proposal as it calls for substantial community input around the use of ARP funds.
• Increase funding to the Housing Opportunity Fund. An increase to the HOF from the operational budget would ensure Pittsburgh could make meaningful advancements in housing for its low-income residents.
• Implement citywide inclusionary zoning. Adopting the Exploratory Committee’s full recommendation of a 10% inclusionary affordability requirement citywide, with a 15% requirement in strong market areas. This would help ensure citywide development includes affordable housing measures.

On workforce development.  In partnership with the county and Partner4Work (the city and county’s workforce development board), the city should do the following:

• Deepen and expand the sectoral workforce strategies overseen by Partner4Work so that more low-income and diverse populations can access family-sustaining jobs and be great workers with Pittsburgh businesses.
• Leverage federal infrastructure and climate dollars to grow more good union jobs for a diverse workforce, including in construction and manufacturing.
• Continue to develop and diffuse support for businesses eager to embrace better organizational practices and improve their job quality, including to attract and retain people with barriers who can nonetheless succeed with more understanding and support.