OMB: Reappropriations, revenue shortfalls leave the city facing a $24'$26 million operating gap for 2026

The Office of Management and Budget and Finance presented Pittsburgh City Council with the city's first-quarter 2026 financial outlook on June 24, telling members that early estimates show an operating shortfall in the range of $24 million to $26 million for 2026.

Acting OMB director Ria Price told Council that reappropriations from 2025 increased 2026 spending authority by about $36 million and that, combined with lower-than-expected revenues and several departmental overages, the city is projecting the year-end operating deficit. "Right now, at the end of the 1st quarter, and looking at our projections for the remaining quarters, we're looking at over a $24,000,000 deficit at the end of the year," Price said.

Revenue pressures: OMB singled out five revenue categories projected to fall short of the adopted budget: licenses and permits (notably commercial and residential building permits), charges for services (EMS billing collections), fines and forfeitures, intergovernmental revenue and interest earnings. Finance director Jen Gula explained that some shortfalls, such as EMS, were timing and processing issues with a third-party billing processor and staffing shortages that slow recording and posting of receipts.

Expenditure pressures and rollovers: Price outlined departments she expects will exceed their adopted budgets, citing reappropriations, retroactive wage payments, utilities and storm-related overtime among the causes. OMB said reappropriations allow departments to "overspend" their adopted operating budgets because funds budgeted for prior years were rolled into 2026 as committed/encumbered obligations. Price proposed changes to reporting to make multi-year capital and reappropriated obligations more transparent in quarterly reports.

Capital and ARPA: OMB reported low Q1 capital activity in the 2026 CIP reports (construction season and multi-year timing depress Q1 spending on CIP pages) and about $4.2 million in Q1 ARPA spending in 2026. Capital staff said a more inclusive capital reporting approach will better reflect actual multi-year spending going forward.

Council reaction and next steps: council members asked for greater clarity on rollovers, how much is contract versus operating payroll, and whether transfers labeled as "transfers out" (for example Stop the Violence and the Housing Opportunity Fund) should be counted as expenditures so the public sees the full impact on the unassigned fund balance. OMB said it will provide quarterly updates and work with council offices to make carryovers and obligations more legible ahead of 2027 budget work.