On December 19, 2022, Pittsburgh City Council passed the 2023 final budget for the city. This enacted budget is similar to Mayor Gainey’s first proposed budget presented to the Council in mid-November. Recognizing that the actual budget is a large and dense document, this brief provides a short and, we hope, more accessible overview of the final budget. In particular, we highlight some changes made between the proposed and final budget, focusing on City efforts to address the affordable housing crisis, public safety, and workforce development. Elements of the Mayor’s budget that were enacted in December include a $2.5 million allocation for an affordable housing bond, a reduction in Bureau of Police spending, a shift of the Office of Community Health and Safety (OCHS) from the Mayor’s Office to the Department of Public Safety, an increase in staff for the OCHS, and a funding increase for internships within the city for Pittsburgh Public School students.
The approved 2023 combined operating and capital budgets total $825 million, a .3% ($2.7 million) increase from the Mayor’s proposed budget. The change was largely driven by an increase in the capital budget of $4.2 million for Facility Improvements to the Oliver Bath House public swimming pool in the South Side neighborhood plus $800,000 towards the Pittsburgh Parks Conservancy. The operating budget decreased slightly by .25% ($1.6 million) due in large part to an almost $1 million decrease in Department of Finance funding.[1]
As we highlighted in our December budget analysis, Pittsburgh continues to combat economic and housing inequities while also trying to address gun violence and public safety. The passage of the 2023 budget marks Mayor Gainey’s first budget and attempt to address these long-standing challenges.
Affordable Housing. Affordable housing remains scarce in the city as indicated by the return of eviction filings to 2019 levels as eviction moratoriums have ended and emergency rental relief funds declined. The driving forces behind the shortage of affordable housing include persistent poverty and stagnant incomes, especially for communities of color and female-led households, and a decline in rental units that cost less than $1,000 per month. The decline in demand for commercial office space faced by many cities in our post-pandemic landscape presents Pittsburgh with an opportunity to close the housing affordability gap by converting office space into residential units.
Black households and female-headed households with children have the slowest median income growth in the city, highlighting continual racial and gender disparities in Pittsburgh. Investments in affordable housing can assist Pittsburgh’s low-income, Black, and female-led households which are also disproportionately impacted by eviction filings.
While the majority of affordable housing spending occurs via the capital budget, some spending on housing is allocated through the operating budget to the Department of City Planning and of Permits, Licenses, and Inspection (PLI), within which housing-related neighborhood strategic plans and code enforcement occur. The enacted Department of City Planning budget decreased by 1.75% or $116,000 compared to the proposed budget due to the elimination of two proposed positions in city planning and the PLI budget decreased by 1.3% ($124,000)[1]. Department of City Planning funding for a city-wide comprehensive plan, however, remains unchanged, which we support. This plan aims to move the city toward being a more just Pittsburgh by developing visions and plans for each neighborhood that support social change and equitable development and that incorporate solutions for climate change to ensure everyone can participate in and benefit from the region’s economic progress.
The percent of affordable housing spending in the capital budget is 7.6%, the same as the Mayor’s proposed budget. Capital budget funding for Housing Development, a program that offers grants and financing to homeowners, developers, and community development corporations managed by the Urban Redevelopment Authority (URA), increased by n. It is not clear how much of or where the affordable housing bond proceeds will be directed, but Jake Pawlak, deputy mayor and director of the Office of Management and Budget, indicated the bond could likely return “tens of millions of dollars” and recognized the bond’s potential to preserve and increase affordable housing.[3]
Reimagining Public Safety. To re-envision public safety is to shift the way police departments operate, moving away from an armed police response to every crisis and towards a system that relies on strengthening the social safety net, creating good jobs, and building strong communities. Mayor Gainey is making strides towards the implementation of a community policing model, building a more diverse police force, and strengthening an alternative crisis response team to help address issues related to homelessness, addiction, mental illness, and poverty. Mayor Gainey is also addressing gun violence in Pittsburgh. In June 2022, he announced a new, holistic plan aimed at ending gun violence in Pittsburgh called the “Plan for Peace,” which addresses public safety issues, including changes in policing, while at the same time addressing root causes of gun violence.
The Mayor, after participating in ongoing conversations with the Bureau of Police, has flagged future staffing as a concern. With 240 of the city’s police officers eligible for retirement whenever they choose, the city finds itself in a precarious position. Already, despite 900 police officers being included in the 2023 budget proposal, the headcount is down to 836 as reported during the Public Safety budget hearings on December 1, 2022. For that reason, Mayor Gainey has announced two classes of new recruits in the coming year after two years of no new recruiting classes under Mayor Peduto. In part, the Mayor is using this police recruitment effort as a way to bring more diversity to the police force. The City has hired an outside consultant to conduct a staffing study of the Pittsburgh police, including an examination of the way officers are currently utilized and distributed throughout the city and recommendations moving forward.
As we noted in our December report, the Bureau of Police budget has decreased as a share of the operating budget, down to 18% from 19.7% last year. The final police budget remained largely unchanged from the Mayor’s proposed budget with an increase of $33,000. The final budget maintains funding for the same 900 officers and 53 civilian positions as in the Mayor’s proposed budget.
The Office of Community Health and Safety (OCHS) remains in the Department of Public Safety OCHS aims to better address long-term community needs by connecting individuals in crisis with social services, public health care, and social work experts. OCHS staffing is funded via the Stop the Violence Trust Fund—funding for staffing is increasing to support an increase from 12 full-time equivalent staff positions in 2022 to 19 in 2023.
Workforce Development. a strong workforce development plan in the city is critical to addressing historic inequities and helping communities. The City’s workforce development programs cannot solve all structural inequalities, but they can ameliorate them and help clarify when other policies with greater force must be enacted in the city, county/region, state, multi-state region, or nationally. Pittsburgh should work in partnership with the city/county workforce development board, Partner4work, and Allegheny County to address the need for more living wage jobs and the expansion of workforce efforts.
The City’s approved operating budget maintains positions in the Office of Workforce Development that were proposed in the November budget at $149,870. The City’s proposed capital budget also keeps the same allocation of $210,000 in Community Development Block Grant funding (a one-year increase of $60,000) for six neighborhood employment centers operated by community-based organizations that deliver skills training, offer job development assistance (identification of job openings at neighborhood businesses), and help place city residents. Funding for Pittsburgh Public Schools (PPS) internships with the City of Pittsburgh remains the same as in the proposed budget at $86,400.
American Rescue Plan (ARP) funds. The enacted 2023 budget reallocates $1 million earmarked in the proposed budget for streetlight upgrades to medical debt relief. The final budget also allocates $3 million for a food justice initiative that will address food insecurity, proposed by the Mayor in the November budget after strong advocacy from Pittsburgh’s food justice community. Funds for the food justice initiative were reallocated from a $3 million decrease in Land Bank funding.
Looking toward the future. In his budget address, Mayor Gainey acknowledged his desire to create a “Pittsburgh for all.” He has taken steps towards this aim by forming a transition team that gathered experts and community leaders to provide recommendations to the city; holding more community meetings concerning the budget; releasing a plan for peace to address public safety; increasing investments in affordable housing; and promoting workforce collaborations with Pittsburgh Public Schools. We acknowledge these actions as critical steps towards a Pittsburgh for all. We also recognize more must be done to ensure that our shared values—access to affordable housing, living wages, and safe neighborhoods—are fully realized in budget decisions that make Pittsburgh a livable city for all.
The City should produce, promote, and preserve affordable housing as eviction filings rise, and the city continues to suffer from economic inequities. This can be done through:
- Increased investment in the Housing Opportunity Fund using the full 1% of the Realty Transfer Tax increase that was passed in 2017. The HOF allocation remains unchanged at $10 million per year (despite increasing Realty Transfer Tax revenue). City Council passed a $2.5 million allocation for an affordable housing bond issuance that can be used to make substantial investments in affordable housing. But HOF funding remained unchanged from the Mayor’s proposed 2023 budget to the budget’s final passage. By using the full 1% of the Realty Transfer Tax, $12.8 million in additional funds could be allocated to the HOF and be used to increase funding for legal assistance and down payment assistance. HOF programs such as these would be ineligible uses for the affordable housing bond.
- Increased funding and support for office-to-residential conversions. The City has reallocated $2.1 million in ARP funds to convert commercial space to residential affordable housing. Continuing these efforts in conjunction with enacting community benefits agreements on new developments (e.g., so that community members gain access to construction jobs on these projects and then entry into careers in the high-paid unionized construction trades) can help to grow the affordable housing stock while fostering job growth in the city.
- Increased support and funding for Community Land Trusts (CLTs). There are $5 million in 2021 ARP funds dedicated to CLTs in the 2021-2024 spending plan. Increasing funding to CLTs can increase staff capacity and create an acquisition fund to enable CLTs to acquire properties.
In this year’s budget, we see some movement on Mayor Gainey’s stated priorities as they relate to police reform and gun violence. The City should continue public safety changes through:
- Continued investment in and building of the Office of Community Health and Safety so that those in crisis get the support they need and we place less reliance on police officers to respond and deal with every crisis.
- Increased transparency on the budget regarding police expenditures.
- Sharing the results from the staffing study, which were planned to be released at the end of this year, and engage the public in discussion of the results.
- Continuing to pursue the implementation of a disciplinary matrix for police violations to create a consistent, fair, and transparent disciplinary process.
- Continuing to invest in housing, food, public transportation, job training, and other social services that will increase support for Pittsburgh’s most vulnerable populations.
On workforce development and economic opportunity, Mayor Gainey should continue to deepen and expand sectoral workforce strategies, including the following:
- Continue to implement the Prepare to Prosper Initiative, a program that provides employment in the city, anchor institutions, and other Pittsburgh companies to career and technical education (CTE) students. The City should explore the potential to build on this initiative over time to increase recruitment and placement of more city residents into good jobs.
- The City—in partnership with the County, state, and four-state Ohio River Valley region—should double down on opportunities to leverage federal funding for workforce development, infrastructure, and sustainable manufacturing from the trifecta of landmark federal legislation that passed in 2021 and (bipartisan infrastructure bill, Inflation Reduction Act, and CHIPS+ bill).
- As part of the effort to reduce inequality and create more living wage jobs in Pittsburgh, the City should also implement the transition team report recommendation to work with City Council to enable the creation of “industry standards boards.” These boards would be able to elevate understanding of job quality in any particular industry and ideas for improving job quality, including sector-specific wage standards and facilitating union organizing.
The investments in affordable housing, public safety, and workforce development under Mayor Gainey’s new leadership are moving Pittsburgh in a good direction as it begins to address some of the city’s long-standing inequities. As Pittsburgh continues its efforts toward becoming a more just and equitable city, we should be actively pursuing new, long-term sources of revenue that ensures everyone is paying their fair share. UPMC and other large Pittsburgh non-profits should pay their fair share, and the City should establish a “Fair Share Tax,” which could broaden the tax base and generate revenue coming from the top 1% and richest one-fifth of residents.
[1] The Department of Finance budget decrease was due to Other Postemployment Benefits (OPEB) trust fund contributions, which decreased by $1 million. Other changes in the operating budget moved city communications services — including the city print shop and cable bureau — back to Innovation and Performance from its proposed move to the Mayor’s office.
[2] The PLI budget decrease was driven by a $141,000 decrease in the Employee Benefits budget for Health Insurance.
[3] Margaret J. Krauss, “Gainey administration plans a massive investment in Pittsburgh’s affordable housing,” 90.5 WESA, January 10, 2023, https://www.wesa.fm/development-transportation/2023-01-10/gainey-administration-plans-a-massive-investment-in-affordable-housing.