A Crash Course in Pittsburgh Finances

It’s been a busy couple of weeks for Mayor Luke Ravenstahl and the City of Pittsburgh in regard to its finances. Pittsburgh is currently being considered by the state to have its Act 47 designation revoked. Act 47 is a 25-year-old law that grants the state the right to institute certain review boards to provide oversight over a city. The two notable authorities are the Act 47 Coordinators, who provide oversight of the city’s finances in compliance with the law, and the additional Intergovernmental Cooperation Authority, created by the Pennsylvania state government in 2004, specifically to provide oversight of Pittsburgh’s finances.

Last week, the Post-Gazette reported that the Act 47 Coordinators, believing that substantial progress has been made, wrote to their superiors that Pittsburgh has made enough progress towards solving its financial goals to be released from Act 47. This move would provide the City with more independence, and was met with enthusiasm by the Mayor and some members of Council, while other Council members and administers worry that Pittsburgh still has long-term financial liabilities.

Even if the City were released from Act 47, it would still be regulated by the Intergovernmental Cooperation Authority, which plays a role in the other big development in the City’s financial story this week.

The Post-Gazette reported today that, as part of its duties, the state-instituted Intergovernmental Cooperation Authority gets to approve the City’s budget, proposed by Mayor Ravenstahl. At their meeting this morning, the ICA approved the proposed budget, but only on the condition that the City create a task force to research the relationship between other city governments and their own non-profits, to provide a more sustainable and transparent model for Pittsburgh.

This is something that we frequently discuss; the relationship between the City and local non-profits, including UPMC and the University of Pittsburgh. UPMC pays the City through a system called “payments in lieu of property taxes.” These agreements are currently kept confidential, but the ICA board ordered the City to release these agreements, and to provide more transparency.

Basically, this just brings up the question plaguing the City for months: how much money can they reasonably expect to get from local non-profits, including Pitt, and how can they make it more sustainable. It looks like they now have a timeline to find the answer, and whatever it is, it is likely to have an impact on Pitt students.

So that’s the crash course; the City may soon find itself independent of one regulatory board, but still under the thumb of another. They now have a budget the is projected to collect more than it spends, but it now may have to be a little more transparent, and a lot more deliberate, in its relationship with local non-profits.