Pittsburgh City Council takes a preliminary vote Tuesday on Mayor Luke Ravenstahl's revised budget plan. The new budget is $7.3 million less than the original $453.8 million plan that was rejected by the Intergovernmental Cooperation Authority. The state oversight panel turned down the first budget because it relied on a 1% tuition tax that was not in place,
The new budget includes $400,000 in savings by not filling vacant jobs; $500,000 in revenue from selling an abandoned firehouse in Point Breeze, several closed recreation and senior centers, and the old Hazelwood Library; and intensifying collection efforts to bring in $2 million in unpaid property taxes. The mayor's budget director Scott Kunka says the new plan also uses $4.1 million from the city's debt escrow funds.
Council's Finance Chair Bill Peduto opposes the use of the 4.1 million because it is intended to be used to reduce the city's debt. Peduto says one simple way to avoid using the debt reduction funds is to invest the money. "We have $45 million in an account, earning no interest. If we simply put that into municipal bonds, we would be able to earn a couple of million dollars. We could use that at the end of the year, the interest...not the money, to pay down expenses."
Peduto says the revenue projections in the original budget was too conservative..."After working with the consultant the city hires from the Pennsylvania Economy League, we found that the revenue the city will be generating is higher, and it will be higher for years to come."
The ICA is reviewing the revised budget and has till December 18th to approve or reject it.
Council has until December 31st to pass a balanced budget.