Pittsburgh sheds distressed city status as fiscal health improves

Kayakers paddle past downtown Pittsburgh on the Allegheny River in this September 4, 2015 photo. (AP File Photo/Gene J. Puskar)

Kayakers paddle past downtown Pittsburgh on the Allegheny River in this September 4, 2015 photo. (AP File Photo/Gene J. Puskar)

On Monday, Pittsburgh became the second city to exit Act 47, the state’s oversight program for financially distressed cities.

For a city known for the catastrophic collapse of its steel industry in the 1980s, this clean bill of financial health was lauded by state and local officials as nothing short of a comeback.

Governor Tom Wolf congratulated the city’s administration and its residents for their fight to establish firm financial footing. Since losing its manufacturing base, Pittsburgh has developed robust job sectors in education, medicine and technology.

“We’ve transformed a rust belt city—you’ve done this—that was a symbol of economic decline into one of the most dynamic examples of innovation in the new economy, in the world,” he said. “And this turnaround hasn’t been easy.

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When Pittsburgh sought state oversight in 2004, the city was broke: it was drowning in debt; it couldn’t pay its bills. The state-prescribed solution included cutting staff, limiting pay raises to police and fire unions and shifting a portion of the annual budget to pay off debt.

The point of Act 47 is to ensure residents have access to essential services, such as fire or police, while helping a municipality regain its financial footing.

Officials say Pittsburgh demonstrated the ability to balance its budget in the long term, as well as to address more immediate needs such as infrastructure investments and pension funding.

When a city works well, it’s almost invisible, said Gordon Mann, director of Public Financial Management, one of two firms that helped Pittsburgh plan its way out of oversight.

“Having a government that’s stable financially and able to provide those services when you need them, so that the rest of the economy, so that the community, so that the private economy, can grow and flourish,” he said. “That’s what we hope will be the case here.

Mayor Bill Peduto feels confident that is the case.

“Pittsburgh is back,” he said.  

Peduto added he hopes Pittsburgh’s departure from state oversight sends a message to businesses around the world.

“If there were any questions about the financial strength and stability of the city of Pittsburgh, in making a decision on locating here, those questions should be at rest,” he said.  

Pittsburgh is one of 20 cities vying to become home to Amazon’s second headquarters; Philadelphia is also a finalist.

Pittsburgh will begin to invest more in streets, parks and the city’s many bridges, said Peduto, even as his administration continues to establish rules for responsible money management. Local officials say managing the pension fund will continue to be one of the city’s most pressing concerns.

Pension funds are not just a problem in Pittsburgh, said Peduto, but in municipalities across the state. He said he and his administration will continue to push for state-level reform.

Eighteen municipalities across Pennsylvania remain in the financial oversight program, including Chester, Harrisburg and Reading. Altoona successfully exited Act 47 in September 2017.

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