Calls for utilizing federal aid windfall ‘transparently and impactfully’
In releasing her annual financial reports on behalf of Allegheny County, County Controller Chelsa Wagner said that a decade of sound fiscal stewardship, specifically a commitment to increasing the County’s unassigned fund balance, had helped County finances weather the COVID-19 pandemic and economic downturn relatively unscathed.
In an introductory letter to her yearly Popular Annual Financial Report, the tenth produced during her tenure in office as Controller, Wagner pointed out that she had advocated for an increased fund balance since assuming office in January of 2012, “when the County’s rainy day fund was essentially empty.” The balance grew from only $6.2 million in 2011 to a high of $89.8 million in 2019, and stood at $88.9 million at the close of 2020.
“I thank and congratulate the administration and County Council for their own roles in a decade of fiscal stability and growth,” she wrote.
A decrease in County government expenditures in 2020 of $54 million more than compensated for a decrease in General Fund revenue of $38 million during the year, the report says. Significant reductions in expenditures included a decrease in debt service due to refinancing ($15.3 million), a decrease in Jail and alternative housing populations of approximately 750 residents ($7.6 million), and approximately 115 fewer residents in the Kane Regional Centers, a 10 percent decrease ($5.6 million).
The largest revenue decreases for the year were $21.9 million in decreased charges for services resulting primarily from decreased resident counts in the Kane Centers, and $11.9 million in State revenue due to fewer State-reimbursed human services being provided.
Beyond the General Fund, a dramatic decrease occurred in collections of the Drink and Vehicle Rental taxes, which fund the Port Authority and other public transit initiatives. Drink Tax collections fell to just $20.6 million from an all-time high of $45.7 million in 2019, while Vehicle Rental tax collections fell to $5 million from $7.8 million. The County’s largest obligation from these proceeds, the more than $30 million annual local match for the Port Authority to access State funding, was largely able to be replaced with emergency federal funds.
Fiscal challenges for the County remain even as the pandemic subsides, especially the continually underfunded Pension Fund, Wagner wrote. Despite increases in the contribution rate paid by County government and employees in five of the last nine years, the pension system’s funded status of assets to liabilities stood at just 36.1 percent, down from 42.8 percent in 2019. A pension fund is considered “healthy” when it has a funded status of at least 80 percent.
“While reforms to benefit calculations for which I advocated last decade will improve the outlook somewhat in coming years, we must pursue further remedial measures such as reducing reliance on overtime and on the outsourcing of jobs formerly done by government employees, bringing more contributing employees into the system,” Wagner wrote.
Despite the decrease in Jail spending during the pandemic, the County must work to slow and reverse the $23 million increase in that facility’s cost since 2011 by pursuing alternatives to incarceration, she said, writing that “Efforts to release medically vulnerable inmates during the pandemic had fiscal as well as humanitarian benefits, and should be continued.”
Of $382.7 million expected to be received by the County through the American Rescue Act of 2021, Wagner wrote, “An unprecedented infusion of federal pandemic aid can be transformational for our County, and we must ensure it is utilized transparently and impactfully. Our essential workers—far too many of whom continue to struggle with access to affordable housing, health care, and reliable transportation—must benefit.”
The Popular Annual Financial Report is largely based on the Comprehensive Annual Financial Report for 2020, which contains the full audited financial statements of the County. Interactive versions of charts and graphs appearing in the Popular Annual Financial Report are available at https://alleghenycontroller.com/2020pafr/.
MEDIA CONTACT: Lou Takacs