Peduto: Cities like Pittsburgh at risk if federal aid falls short

Joining mayors from across the country to call on the federal government to provide immediate and substantial aid to localities, Pittsburgh Mayor Bill Peduto said the Rust Belt will never make a comeback if cities like his can’t fund the “basic operations of local government.”

That’s in danger of becoming a reality in many cities, their mayors said Tuesday, as they face what Mr. Peduto called a “critical juncture” in the conversation surrounding America’s economic recovery from COVID19.

There won’t be an economic recovery, Mr. Peduto said, “if our cities are left to die.”

On a conference call assembled by the National League of Cities and U.S. Conference of Mayors, mayors from seven cities — including Pittsburgh — criticized Senate Republicans for leaving localities behind in their newly proposed COVID-19 relief package, which the two groups say provides no direct aid for local governments.

Direct aid is needed, they said, because without a robust financial package they can use to their own liking, cities will have to cut critical services and jobs — putting economic recovery on hold and potentially having long-lasting consequences.

Mr. Peduto said 17-20% of the revenue Pittsburgh brought in last year will not be there this year — $100 million less. Parking tax is down to almost zero, he said. So are amusement taxes and state taxes.

Operational surpluses the past six years, Mr. Peduto said, will be spent this year — entirely — just to make payroll and not have to furlough workers.

“What does that mean for the years out? Cuts,” Mr. Peduto said, insisting the city won’t be able to address the shortfalls by raising taxes, especially on people “who are already hurting” from the pandemic.

Mr. Peduto noted the city funds police, fire and EMS and said if the Senate is serious about funding the police, “then they have to be serious about being able to fund the cities that pay their salaries.”

The city has already begun 10% “across the board” non-personnel cuts, Mr. Peduto said, and is looking at additional cuts for the next year’s budget, which will be submitted in the next few months.

“In order to be able to balance the budget, which we are obligated to do — unlike Congress, we have to have a balanced budget — we will need to make significant cuts throughout the budget,” Mr. Peduto said.

Mr. Peduto cast doubt on the feasibility of borrowing and said the mistake Pittsburgh made in the 1990s was trying to “borrow our way into prosperity,” which ended up destroying the city’s bond rating.

“We now have a bond rating that’s the highest it’s been since the collapse of steel, and we don’t intend to make that same mistake twice,” he said.

“We’ve refinanced bonds where we’ve been able to with the favorable market, but without an ability — almost a bridge — to get us to where we’ll need to be over these next couple of years, what you’re going to see in cities is more cuts to essential services and to critical projects than cities rushing to borrow money in order to try to make up this lost revenue,” Mr. Peduto said.