Pittsburgh Mayor Corey O’Connor says the city is in more financial trouble than he previously thought — but while he’s not yet ready to reveal his specific ideas for remedies, he told reporters Thursday he doesn’t plan to make staff cuts or tax increases.
O’Connor said at an afternoon press conference that he plans to reopen the 2026 budget, which was finalized in the waning days of former Mayor Ed Gaiey’s tenure, to address a deficit he estimates amounts to between $30 to $40 million.
“ We knew taking this job that we were going to walk into a situation where we would have to tighten our belts, but the reality is much worse than we thought,” he said. “It’s going to take prudent and responsible leadership over the next several years to get us back on track.”
Asked whether the situation amounts to a five-alarm fire, City Council finance chair Erika Strassburger said it did not — but she told reporters she does see “ smoke.”
“The fire has not yet turned into a two-alarm fire, but we’re anticipating that without action, urgent action, it could turn into that in the next two to three years,” Strassburger said.
While O’Connor said the concerns he described were “serious,” he said his administration was not yet actively considering layoffs, tax increases, or cuts to city services. He instead said the city needs to adopt a “mindset of growth” and focus on increasing its tax base. He also expressed hope that the city could be helped by a potential future payment-in-lieu-of-taxes deals with tax-exempt employers, which include local universities and hospitals.
“ We cannot tax our way out of a decline. So our mode, along with council, it’s gotta be about pro-growth and opportunities for our residents.” O’Connor said. “ We just cannot go on an internal spending spree, but we also have to make sure that we are investing capital so that we can grow this city fast.”
O’Connor also said he’d take another look at eliminating vacant positions in the budget, and examining whether money could be saved on some city contracts.
O’Connor’s budget deficit estimate includes areas where the city has been spending beyond projections, as with overtime costs. It also factors in areas where the administration may incur costs that are likely but difficult to gauge, like the price of settling lawsuits or covering increased fuel costs due to the Trump administration’s war in Iran. And it includes money taken from restricted funds — like “parks tax” proceeds which are earmarked for spending on park facilities — that O’Connor said were spent on other expenses instead.
O’Connor said such concerns were especially pressing this year, when scheduled debt repayments spike before easing in 2027. But finding the solution to the city’s overall money woes, he said, is likely to take awhile.
“We didn’t get here in a year. A solution isn’t going to happen overnight or over one year,” he said. “ You’re gonna see some changes right now, but again, this is a long term situation.”
Challenges old and new
Financial challenges are not new for Pittsburgh: Mounting debt service payments and decreasing property values in the wake of the COVID-19 pandemic have vexed the city for some time. Those concerns have been compounded by headaches such as the loss of revenue from the so-called “jock tax,” struck down by the state Supreme Court last year. And there have been debates about whether Gainey and council were wise to devote money to trust funds for affordable housing and violence prevention, or whether the development of a comprehensive plan was too pricey.
Those questions were a key issue in O’Connor’s challenge to Gainey in the 2025 mayoral election. At his Election Night victory party this past November, O’Connor said he planned to “guide and reshape the budget” once he took office. (Budgets can be reworked throughout the course of the year.)
Shortly after, City Council raised Pittsburgh’s property tax rate by 20%, to make up for funding shortfalls and to cover some of the cost of restoring the city’s dilapidated vehicle fleet. Gainey had originally proposed a “tight” budget with no tax increases; the revised version passed last year without his signature.
O’Connor said Thursday that he was not considering cuts to either the affordable housing or violence prevention trust funds. But said he wants to ensure sure those dollars are “ actually being spent where they should be.”
Earlier this week, O’Connor said the city is “looking at some partners” to help fund work on the comprehensive plan, which is still underway and which is expected to cost some $6 million. But he did not specify where the money would come from.
“ We want to continue that, but taxpayers shouldn’t have to pay for it,” he said Thursday. “So we are already looking at other sources to help fund projects like that.”
O’Connor’s press conference followed on a warning issued in February by city controller Rachael Heisler — one of several her office has released in recent years. According to an unaudited end-of-year financial report, the city ended 2025 with a $8.6 million operating deficit rather than the $3.2 million surplus Gainey’s administration initially projected for the year.
On Thursday, Heisler said she was glad O’Connor was taking the issue seriously.
“ Acknowledging and addressing the situation we’re in, I think, is a prudent choice to make,” she said.