Pittsburgh Mayor Bill Peduto on Tuesday called for state takeover of Pittsburgh Public School District finances, saying the district should be able to balance its annual budget within current revenue levels.

The mayor was responding to a question about the district’s proposed 2.3% tax increase that Superintendent Anthony Hamlet has said is needed to maintain a reserve fund.

The district’s Chief Financial Officer Ronald Joseph has proposed a take-back of wage tax revenue that was diverted to the city in 2005.

City residents pay a 3% wage tax. Originally, 2% went to the schools and 1% to the city.

To address Pittsburgh’s fiscal distress when the city was under Act 47 oversight, a reform changed the formula to 1.75% for the schools and 1.25% for the city. The city left Act 47 in 2018 but the wage tax distribution has remained the same.

District spokeswoman Ebony Pugh said the district is audited annually.

“There have been no significant issues raised related to how the district conducts its finances,” she said.

Pugh did not comment further on what Peduto said. School board President Lynda Wrenn said she was not surprised by the mayor’s comments. Wrenn, who will leave the board next month, opposes the tax increase.

“I can see where he’s coming from,” she said. “He’s just unveiled a budget that is $608 million with no tax increase and a week ago we unveiled a budget of $665 million with a tax increase. It does raise the question of: Is there belt-tightening we could do?”

Peduto said the district should be under state fiscal oversight.

“I think the best thing that could happen for Pittsburgh Public Schools is a state oversight like Act 47 to get the financial picture in order,” Peduto said.

Addressing reporters after delivering an annual budget address to City Council, Peduto said Hamlet’s office has called him for a meeting, and he plans to attend.

“If the school is open to that — Act 47 for the school district — where the state will come in, open up all of the books, let the people of Pittsburgh see where the spending is happening, look at the revenues and then come up with a better way for the schools’ revenues, I’m going to work with them,” he said.

“If they simply say, ‘We’re going to take your revenue to fix our hole,’ and not be the leaders that they were elected to be in making tough decisions like raising taxes, then I have no time for that, absolutely none, and I will fight them in Harrisburg.”

He noted that the city has increased spending by about $120 million since he took office in 2014 and that the money has come from the same revenue sources as the district — real estate and earned income tax.

Peduto is proposing a balanced $608 million budget for 2020 with no tax increase.

The district is proposing a $665.6 million spending plan.

“Why in the heck can’t the school board balance their budget when they have those exact same taxes and they’re seeing that windfall?” Peduto said.

“Where is all this money going? If they are looking to have part of the city’s wage tax, then they should be willing to open the books and let the state come in and do exactly what we had to do through Act 47, which was difficult restructuring for the future. If we didn’t have that, the city would be bankrupt.”

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