Mayor Corey O’Connor presented his case for ending city budget allocations to funds dedicated to affordable housing and violence prevention, saying related work will continue and that the city must make “tough decisions” to navigate its fragile financial condition.
“The way the budget has been structured for the past several years is a big reason why we are facing these challenges,” O’Connor said during the annual budget address Monday, his first since taking office. “If we don’t change course that would mean cuts to our basic services, like no resources for kids, no park maintenance, no funding for playgrounds, and no weekly garbage pickup.”
The 2027 budget O’Connor submitted to City Council Monday hardly increases spending from this year, but It will still draw $28 million from the rainy day fund. O’Connor’s operating budget includes $727 million in spending.
O’Connor said he hopes to balance the city’s books and refill the reserve fund during his time in office, but the five-year forecast attached to the budget does not map out a path to stability. It shows the city operating at a loss each year and running out of savings by the end of 2031.
After Monday’s address, city Chief of Staff Dan Gilman said that the only way O’Connor’s vision will come to fruition is if the city’s population grows.
“We cannot continue to run the city with this size population,” Gilman said. “We have to have a growth strategy.” In the meantime, he said, “We have to control our spending.”
Trust funds on the chopping block
The proposal does not include a tax increase, a year after council approved a 20% hike in the property levy for 2026.
O’Connor’s plan would lower spending in three main ways:
- Cutting off funding to the Stop The Violence Trust Fund
- Cutting off funding to the Housing Opportunity Fund Trust Fund
- Decreasing the city’s contribution to its pension fund.
The city has in recent years transferred $10 million to each of the two trust funds annually. The budget proposal decreases pension contributions from $112 million to $105 million.
O’Connor said in September the trust funds were an accounting “gimmick” used by past mayors to avoid counting the expenses against the city’s revenues when balancing the budget. He said the funds’ present cash reserves “will allow us to continue to invest in the critical work paid through these trust funds without the transfers.”
The 179-page operating budget document shows the mayor is moving 60 of the 72 jobs that were previously part of the Stop The Violence fund into the Department of Public Safety, including in a new violence prevention unit.
O’Connor’s speech suggested a strategy shift to move violence prevention work in-house, away from the current model that gives grant funding to outside organizations.
Gilman said another factor in changing the funding structure for violence prevention is the ongoing criminal investigation into the administration of former Mayor Ed Gainey over its distribution of grant funds.
“I don’t think there’s a move away from working with community organizations,” Gilman said. “I will say there’s a move to making sure we’re doing things legally, ethically and according to the laws of Pennsylvania, to make sure that things are being competitively bid, to make sure that dollars are being spent in accordance with the law.”
He declined to comment on whether he thought the previous administration acted improperly, but said he wanted to make sure that under the O’Connor administration, “those things aren’t questioned.”
Jasiri X, cofounder of community advocacy group 1Hood, which has received some city Stop The Violence funds, credited the fund with a significant decline in the city’s homicide count during a press conference prior to the budget address. After peaking at 71 homicides in 2022, the city saw a decline each subsequent year and a total of 32 in 2025, a 55% drop from 2022.
“Why would we even think about taking funding away from something that worked so well?” he said.
Gilman said the Housing Opportunity Fund will continue to operate using money it has in reserve, and the administration is providing “millions of dollars” to the Urban Redevelopment Authority to promote housing.
Jala Rucker, a leader in Pittsburgh housing activism, said the Housing Opportunity Fund is key to assisting Pittsburghers facing housing insecurity.
“At a time when families are also drowning in the affordability crisis, the possibility of cutting these life-saving measures, of balancing the city’s budget on the backs of the city’s most vulnerable residents, is completely out of step with what people need to live securely in Pittsburgh,” Rucker said.
O’Connor also proposes to cut the city’s out-of-pocket spending on infrastructure and capital projects next year. While the total capital budget would increase next year, from $112 million to $145 million, the amount that comes from the city’s general fund would decrease from $21 million to $9 million. The rest comes from bond borrowing and federal and state sources.
Declining revenue
The proposed five-year plan, required by law to accompany the budget each year, shows annual revenue growth of barely more than 1% — a figure below typical increases in the cost of labor, fuel and other expenses. The plan foresees an overall decline in real estate tax revenue — still the city’s biggest source of income — over the five years.
Councilor Barb Warwick proposed a new tax last month that would collect revenue from so-called unearned income, including capital gains and rental income. It’s not clear whether there is broad support for the idea in City Hall.
Gilman declined to comment on the legislation, noting that it would not impact the 2027 budget in any case.
O’Connor said population growth will be the key to reversing the city’s financial woes, and said his administration’s focus on permitting and zoning reform will jumpstart the process.
He said the city won’t stop at a zoning reform package signed into law last week, promising “a complete rewrite” of the zoning code to encourage more housing construction.
The city’s population has grown about 2% since the 2020 census, mostly thanks to immigrants. Long-term, sustained population growth would go against a multi-generational decline spread across much of the Rust Belt, as well as projections that the metro area will continue to decline.
Charlie Wolfson is the local government reporter for Pittsburgh’s Public Source. He can be reached at charlie@publicsource.org
MOST READ STORIES
Republish our articles for free, online or in print, under a Creative Commons license.
