Financial Leadership to Grow Pittsburgh

Financial Leadership to Grow Pittsburgh:

Under Mayor Luke Ravenstahl’s leadership, Pittsburgh has moved from the brink of bankruptcy to a City that is being spotlighted for its fiscal sobriety.  By adopting common-sense fiscal policies while aggressively addressing long-term challenges, Luke has positioned the City for more growth and development.  Objective third-party experts have applauded Luke’s responsible budgetary policies.

Development without new debt. Since taking office the Mayor adopted a “pay-as-you-go” capital improvement plan that builds a better Pittsburgh without mortgaging our City’s future. This means that important neighborhood needs are being met now without the issuance of debt. 21st Century pools, called spray parks, are being built Citywide, and the Mayor made the largest public safety fleet investment of its kind, purchasing nearly 100 police vehicles without issuing debt. Though this seems like the obvious and right thing to do, putting away the credit card is a new policy adopted by Luke.

Balanced Budgets. Luke has created three structurally balanced budgets that ensure quality City services are provided to Pittsburgh residents. His budgets have allowed Pittsburgh to live within its means and have been lauded for their honest accounting.

Healthy Savings. Luke has brought healthy fiscal policies back to City government. In so doing, not only has the debt been reduced, but the Mayor has generated nearly $100 million in savings. The City has received four bond rating upgrades, which, according to Moody’s, was driven by “two years of fiscal surpluses and a projected third in 2008” and a reflection that the City has grown its saving account “by more than six times” since 2004.

Luke recognizes that he must vigorously protect our future. He has taken great strides in addressing our legacy costs of pension, debt and healthcare.

Pension. Luke is leading the charge for statewide pension reform and doing everything he can now to solve a problem he inherited: an underfunded pension. For the first time in Pittsburgh’s history, the City is putting more money into its pension fund than is required and is offering new, non-union employees the choice of entering into a defined-contribution fund. Both of these moves will improve the fund overtime.

However, Luke recognizes that because this problem was not created overnight, it won’t be solved overnight. Changes need to be made statewide to ensure that Pittsburgh and other cities are solvent and remain solvent for years to come. To that end, Luke called together leaders throughout the state for the first-ever “Mayor’s Pension Summit.” Input and discussion from the summit led to the Mayor’s Four Point Plan for Pension Reform which was recently adopted by the Pennsylvania League of Cities and Municipalities.

While the Mayor and his coalition work with Harrisburg to implement pension reform, he is seeking bold, new ways to stabilize the fund. Understanding that the fund needs a one-time, large cash infusion to be solvent, the Mayor is looking into the possibility of leasing the Pittsburgh Parking Authority’s garages. The proceeds that could be generated would be used solely for the pension fund.

Reducing the debt and improving healthcare. Luke has been aggressive in paying down the City’s debt. He has used the City’s savings account to pay down $50 million in outstanding general debt. This decision will allow the city to retire 40% of its debt by the year 2013.

In 2006 the Mayor negotiated a contract which consolidated the City’s healthcare providers from three to one, saving taxpayers an estimated $17 million. This healthcare plan calls for wellness programs which provide employees incentives for health maintenance.

Back to Issues