Controller warns of nearly $60 million in net losses for Allegheny County

By Steve Bohnel / Pittsburgh Post-Gazette

County Controller Corey O’Connor has released findings that project about a $1 million drop in revenue and a $57 million or $58 million increase in expenses for the current fiscal year if current conditions continue. The controller’s findings pose a challenge for county Executive Sara Innamorato, who is set to release her first budget as the county’s top elected official next week.

The interim report, released Tuesday, shows a snapshot of unaudited expenditures and budgets for the county’s various departments through June 30 of this year. Various departments are projected to be hundreds of thousands — if not millions — of dollars over their original budgets by the time the current year’s budget is completed. 

“Our tax base is eroding and reassessment alone won’t solve the problem,” Mr. O’Connor said in a prepared statement. “We need to be singularly focused — across levels of government, municipal and public-private lines — on encouraging development and returning vacant and disused properties to the tax rolls, which can also help to address the critical issues of housing costs and homelessness.”

A source familiar with the controller’s analysis said it’s the first time in at least about three decades that revenues in sales tax and liquor tax went down — not by much compared to other revenue decreases, but still a concerning sign. And county officials are also waiting to see whether a countywide property reassessment happens by court order, which would further impact fiscal conditions.

The source said broader questions about the economy and job creation — and its impact on the budget — are not being discussed sufficiently by county officials.

“You can’t just sit and not grow … we have a lot of vacant space, you have got to talk about jobs and creating a new environment,” the source said.

County Council President Patrick Catena wrote in a text message that he and colleagues have some difficult decisions ahead once Ms. Innamorato unveils her budget.

“Obviously I’m very concerned. We are facing financial headwinds just like many other municipal governments,” the council president wrote. “Over the next few weeks as we review the proposed 2025 budget we will have a greater opportunity to understand these figures and carefully craft a plan that is both fiscally responsible and sets up Allegheny County for the future.”

Ms. Innamorato is scheduled to give her budget address on Oct. 8; a county spokesperson declined to comment further on what that might entail and declined to comment on whether Ms. Innamorato would consider a tax increase or dipping into the county’s reserves, known as the rainy day fund.

Council has until December to deliberate, during which time it can make line item adjustments. The county’s fiscal year aligns with the calendar year, unlike the state’s budget.

Last year’s final budget approved by County Council was over $3 billion, including a $1.05 billion operating budget — and included expenses above those originally proposed by former county Executive Rich Fitzgerald, although it did not include a tax increase.

Council, led by Councilwoman Bethany Hallam, added items related to the jail oversight board and jail itself. Debate over those additions and others were often spirited during the council’s committee on budget and finance, but Ms. Hallam got a majority of her committee members to agree, and the overall council voted 10-5 on the budget last December. Mr. Fitzgerald signed off on the budget as one of his last official acts.