Pittsburgh controller says coronavirus losses are significant, but manageable

Pittsburgh Controller Michael Lamb predicted the coronavirus pandemic would cost the city $60 million in revenue losses this year, but said the financial outlook isn’t as bleak as it originally seemed.

Lamb on Thursday released his Popular Annual Financial Report for 2019, a summary version of the Comprehensive Annual Financial Report, which provides a complete rundown of Pittsburgh fiscal operations.

Lamb released the 2019 CAFR in April, reporting the city ended the year with a $133 million surplus. He also said the city in lieu of federal subsidies might have to lay off employees in 2021 because of coronavirus losses.

He said Pittsburgh is experiencing significant drops in three tax categories, but matters aren’t as dire as they seemed in April when Mayor Bill Peduto predicted a $127 million deficit for 2020.

“At the time that he made that estimate, I agreed with it, and I think we all did,” Lamb said. “I think the fact that the city made some pretty good mitigation efforts to hold down costs have helped maybe bring that number down a little bit, as well as the fact that we are performing better in some of our tax categories than I think we would have. I think we’re probably in a little better shape than we originally thought.”

Peduto has enacted a hiring freeze and is seeking federal subsidies to help offset losses. Lamb suggested the administration should continue the hiring freeze in 2020.

Peduto plans to continue the freeze, according to spokesman Tim McNulty.

“Mayor Peduto thanks Controller Lamb for this study, and agrees that the citywide hiring freeze must continue,” McNulty said. “In the meantime we will continue to call for federal aid to compensate the cities on the front lines of this fight, and will be conservative in our budget estimates as we work with the controller and (City) Council on the 2021 budget.”

Lamb said revenue is down by $20 million to $30 million in parking taxes compared to last June, $10 million to $12 million in amusement taxes and $3 million to $4 million in facility usage fees charged to professional athletes and entertainers who perform in Pittsburgh.

But property tax revenue is “very close” to last year’s level and earned income tax has increased, Lamb said.

“We’re looking at some significant revenue that we’re going to miss out on in 2020, and the city’s going to have to deal with that,” he said. “Fortunately we have a fund balance that can help us in the interim, but I still fully support what the mayor has said as far as mitigating our costs. I fully support what the mayor has said with respect to federal programs to at least help us in replacing this lost revenue that’s not recoverable.”