Gainey proposes $657M budget for 2025 with spending cuts, no tax hikes

The City of Pittsburgh’s preliminary 2025 budget released Monday by Mayor Ed Gainey would hold the line on taxes, cut spending and scale back plans to pump up the police force.

The proposed operating budget of just under $657 million slices about $29 million, or 4.2%, from this year’s projected expenditures — the first reduction since 2021.

There are no major cuts to essential city services, officials said in a news release.

The spending decrease comes as the city braces for difficult financial years. Revenues are projected to decline, federal covid-19 relief money and some federal grants are drying up and a tax on out-of-town athletes and performers is in jeopardy amid legal disputes.

In a press release, the mayor said the next two budgets would occur during “lean fiscal years.”

“This budget demonstrates my administration’s responsible stewardship of this city’s finances,” Gainey said in a statement. “We remain truthful and transparent about our financial trajectory while we continue to make Pittsburgh a place where everyone who wants to call this great city home is able to.”

Policing needs

That recognition of a need for austerity appears to be reflected in Gainey’s plan to cut the budgeted size of the city’s police force.

In recent years, the goal had been 900 officers. This year, Gainey dropped that to 850, bowing to the reality that the city could not hire so many officers.

While the mayor vowed to return to the 900-officer level, his 2025 proposal actually goes in the opposite direction, rolling back the budgeted number of uniformed officers to 800.

That would still be an increase over the 763 officers on the job now. The city hopes to hire 35 to 40 officers that are part of its recruit class which is scheduled to start in November, Cara Cruz, a police spokeswoman said.

Jake Pawlak, director of the Office of Management and Budget, said the city is still looking to recruit new officers. But the administration also is focused on “striking that right balance” between uniformed officers and civilians who can fill administrative roles in the bureau.

He did not say whether the administration is still committed to returning to 900 uniformed officers.

Bob Swartzwelder, the police union president, said he believed the administration has no plan in place that would improve recruitment and bolster the police bureau’s numbers.

“As long as the city of Pittsburgh remains noncompetitive with other law enforcement services, they’ll never reach that number again,” Swartzwelder said, referencing the lesser pay and benefits city officers receive compared to some suburban counterparts.

Swartzwelder said the union and the city agree that it’s difficult to recruit and hire officers.

”However, they don’t have a plan to deal with the problem,” Swartzwelder said.

He criticized officials for forcing officers to work additional overtime and for denying paid time-off requests because of staffing issues.

Swartzwelder also questioned how the city will handle major events — like the 2026 NFL Draft — with a staffing level lower than it had long targeted.

“You’re going to have to put cardboard cutouts in cars to make it seem like you have police,” Swartzwelder said.

Paving, bridges, staffing

Gainey’s preliminary spending plan — which will likely be modified before it’s approved by City Council before the end of the year — includes a $3.3 million increase in the city’s road paving budget, bringing the total to $20.3 million.

A $1.2 million allocation aims to cover the costs of installing a new automated red light enforcement program, as well as a new staff person to oversee the initiative. The city should be able to recoup operating costs from the program through ticket revenue, Pawlak said, though excess cash will go to the Pennsylvania Department of Transportation to help fund a grant program it runs to provide municipalities with money for street safety projects.

The budget also includes a $1.8 million increase in the city’s demolition budget, continued investments in bridge maintenance and traffic calming efforts and money to support the second year of an in-house EMT training academy.

Eight additional anti-litter inspectors could be hired next year under the proposal, as well as a new plumbing maintenance foreman.

The plan includes 16 additional civilian employees for the police bureau, plus 10 new social workers for the Office of Community Health and Safety, also housed within the Department of Public Safety.

The budget pares staffing in the mayor’s office to 39 positions, down from the 43 budgeted this year.

The mayor’s office next year is projected to spend just over $4.8 million, down about $158,000 from 2024, but still more than the nearly $3.5 million the office had spent in 2023.

The operating budget includes expenses associated with basic city functions, like employee salaries, garbage collection, parks programming, utility bills and other costs associated with keeping the city running on a daily basis

Capital budget drops

The capital budget consists of larger, longer-term projects, like major bridge renovations or building new city facilities. Capital projects have a value of at least $50,000 and a useful lifespan of at least five years.

The mayor’s proposal cuts capital expenditures to $117 million from almost $159 million this year.

“What you’ll see is a very sparing approach to adding new projects,” Pawlak said, explaining new projects were tacked on only if they were “really critical needs.”

One such need identified in Gainey’s proposal is fixing a retaining wall at McKinley Park in the city’s Beltzhoover neighborhood for $500,000.

Councilman Bob Charland, D-South Side, who represents the area where the park is located, said he was pleased to see that line item during an initial review of the mayor’s plan.

He said he was “pleasantly surprised with this on an initial read” and happy to see the city reducing spending plans as it braces for tight financial times.

Charland also lauded the proposal to hire new positions to help curb litter.

Revenue projections

Next year will mark the first year since the pandemic that federal American Rescue Plan Act dollars, meant to help the nation during the pandemic, will not help buoy the city’s operating budget.

The city last year brought in about $710 million in revenue, including taxes and fees.

But officials have warned that figure is likely to decrease this year and next. Property tax revenue has tanked as the city’s Downtown tax base continues losing value since the covid-19 pandemic spurred a widespread shift to remote work.

Gainey last month predicted revenue this year will dip to about $699 million. Projections for 2025 estimate revenue around $660 million, a decline of about 5.5%.

City Controller Rachael Heisler confirmed that her office certified the revenue projections as required by city code.

Revenue projections shifted slightly from the initial estimates Gainey’s office provided last month.

Chief Financial Officer Patrick Cornell said the changes came in response to concerns from the controller’s office and more recent data the city was able to collect.

In August, for example, the city had predicted earned income tax revenue for next year would be over $145.9 million. That amount dropped slightly in the preliminary budget but still 3.8% more than what’s expected this year.

“While the earned income tax is projected to continue to grow at an average rate of 3.8% based on significant wage increases and the continuing impact of high inflation rates, my office remains concerned about how our city’s decreasing population may impact these figures over time,” Heisler said in a letter to City Council Finance Chair Erika Strassburger last week.

Heisler also voiced concerns about the impact property reassessments could have on the city’s real estate tax.

Property tax revenue is estimated to drop to about $144 million next year from $152 million projected for this year.

Cutting costs

The controller reiterated concerns about counting on the city’s facility usage fee, a tax on out-of-town entertainers and professional athletes, which is currently the subject of a legal challenge. The 2025 budget projects that the city could bring in just over $6 million from that tax.

“However, with thoughtful budgeting to account for potential challenges, I believe we can navigate the coming years successfully,” Heisler wrote. “Overall, the revenue assumptions for 2025 through 2029 are reasonable given current economic conditions, but I urge the city to remain prepared and adaptable as we move forward.”

Pawlak said the city has found ways to operate more efficiently to help cut down on costs, which will reduce the impact of the projected revenue drops.

“We’re confident that the budget as proposed won’t result in a reduction in service levels,” he said.

Cost savings came from cutting some vacant positions that haven’t been filled, he said, and analyzing each departmental budget.

City code requires the mayor’s office to present a preliminary version of the upcoming year’s budgets by Sept. 30.

The mayor is scheduled to deliver his annual budget address before City Council on November 12. That will launch a weekslong budget process that includes hearings with each city department and other entities that receive city funds, like the Urban Redevelopment Authority and the Pittsburgh Land Bank.

Council will have an opportunity to make changes to the mayor’s proposed budgets before taking a final vote by the end of the year.