The voices of Tax Policy Center's researchers and staff
I called Pittsburgh, Pennsylvania, my home for six years and my sister and her husband have lived there since 1997. I love that town and still feel like a “yinzer” even though I’m not a native.
Like many cities, Pittsburgh may be experiencing a pandemic-caused fundamental shift in its finances. Prior to the outbreak, Pittsburgh was on track to meet its target 2020 balanced budget with $608 million in revenue. But now its Office of Management and Budget projects a revenue shortfall of $98 million.
By law, the city must balance its budget plus maintain a reserve fund. But that $98 million revenue shortfall means it won’t be able to meet its rainy day fund target. Absent federal aid, the city will have to tap that reserve. And it’s still unclear whether Congress will provide any additional coronavirus relief to state and local governments this year.
The city faces a choice confronted by hundreds of other cities and counties as it works to set its operating budget for 2021: Cut spending on services or raise taxes. Last month, Mayor Bill Peduto invited residents to weigh in, starting with an online forum. Peduto must present his 2021 budget to the city council in November and his office says “input from residents is more important than ever before to ensure that the city can continue to provide critical services in an equitable manner.”
Yet, just five days after the Mayor’s invitation, a Pittsburgh Post-Gazette editorial criticized the mayor’s attempt at democratic government. “Placing the onus on city residents — who are justifiably self-interested and cannot be as fully informed as a mayor — to determine what is ‘equitable’ is absurd… [the mayor] knows city residents are not required to know the ins and outs and tradeoffs of budgetary policy and city management.”
Is the paper’s editorial board right? Are yinzers ill-equipped to provide input? They may not know each and every line item, but will they know enough to provide useful information about their views on fiscal tradeoffs?
Maybe the mayor read some of the latest research on views on taxes. My colleague Howard Gleckman reported last month that those views may be affected in large part by perceptions of how government spends money. Pittsburgh residents might be more receptive to tax hikes if they understand the budget and the necessary trade-offs.
I watched Peduto’s forum, an hour-long meeting hosted by Office of Management and Budget director Kevin Pawlos and senior budget analyst Patrick Cornell. They provided an overview of how the city raises revenue, how it spends it, and how the pandemic has created that $98 million revenue shortfall. They described the revenue sources that have taken the biggest hit: the city’s amusement tax, facility usage fees, parking tax, income tax, payroll preparation tax, parking tickets, and traffic court.
They were able to field a half-dozen questions during the meeting, including two about — perhaps surprisingly — potential sources of new tax revenue:
- Can the city press the state to take away a large nonprofit hospital system’s tax-exempt status and effectively increase property tax revenues? (Efforts continue.)
- Why can’t the city consider a commuter or soda tax like Philadelphia? (State law only allows a city the size of Philadelphia to levy taxes like those.)
Before concluding the meeting, Pawlos and Cornell encouraged residents to learn even more by reading the city’s budget guide. They also can see how their tax dollars are spent using an online tax receipt tool and present their own balanced budget proposal to the city using an online budget simulator (I tried both—they’re pretty cool).
And most important, they can complete an operating budget survey, the results from which will be published and shared with city officials before the Mayor presents his fiscal plan in November.
I took a peek at the 20-question survey. It gives residents a chance to weigh in on whether to raise city property taxes, user fees, or permit fees to support community priorities. Residents also can share whether they would change funding levels for a large number of city departments or services, and whether they’d like the city to establish new programs, expand existing programs, or cut programs. The survey closes on October 16.
How many of Pittsburgh’s 300,000 residents will make use of the city’s budget engagement tools? How many will respond to the survey? Will the residents prove the Post-Gazette’s editorial board wrong?
Typically, elected officials hear from just a handful of predictable special interests when preparing a budget. Local businesses oppose tax hikes, school teachers want more money for K-12 education, homeless advocates want more funding for shelters, etc. Mayor Peduto wants to hear from everybody, and a local newspaper thinks that is a bad idea.
I’m a little biased because of my Steeltown ties, and I’m an optimist: I’m willing to bet that a good number of residents are well-equipped and willing to learn about the city’s operating budget and will tell city officials what they think. I’m also willing to bet that Pittsburgh’s budget transparency and community engagement are good faith efforts, not made in vain.
We’ll see if this yinzer’s right in November. I can hardly wait.
Posts and comments are solely the opinion of the author and not that of the Tax Policy Center, Urban Institute, or Brookings Institution.
Andrew Harnik/AP Photo