Allegheny County's finances weathered pandemic, Controller Wagner says

Allegheny County’s finances came through the covid-19 pandemic “relatively unscathed,” Controller Chelsa Wagner said Thursday as her office released its annual report on the county’s finances.

The county spent $54 million less in 2020 than it did in 2019, which compensated for a $38 million decrease in county revenue during the pandemic, Wagner wrote in the report.

There were steep decreases in drink and vehicle tax revenues in 2020, Wagner said.

The 7% drink tax on alcohol sales dipped from $45.7 million in 2019 to $20.6 million in 2020 because of the shutdowns associated with the pandemic.

Vehicle rental tax collections were also lower, with $5 million collected in 2020 compared to $7.8 million in 2019.

Emergency federal relief money was used to offset these losses, Wagner said.

The county’s financial reserves were $88.9 million at the end of 2020 and the county is set to receive $382.7 million in federal funding through the American Rescue Act, the latest legislation to provide relief because of the pandemic.

The “unprecedented infusion” of money can be “transformational” for the county, Wagner said.

But it’s important the money be used both transparently and impactfully, Wagner said.

The county has not detailed the process it will use to allocate the funds.

City officials have formed a task force to advise council of how it will spend the $355 million the city is set to receive. Pittsburgh Public Schools is forming a similar committee to advise the school board of how the $100 million the school district is set to receive will be spent.

The money can’t be used to tackle the issues facing the county, such as its pension fund. The federal law specifically prohibited its use for pensions.

Despite increased contributions to the pension fund by the county and employees, its funded status of assets to liabilities is 36%. A pension fund is considered “healthy” when it has a funded status of 80%, Wagner said.

“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 in the report.

The county also needs to rein in spending at the jail, she said, as spending there has increased $23 million since 2011. The county should “pursue alternatives to incarceration,” Wagner wrote.

“Efforts to release medically vulnerable inmates during the pandemic had fiscal as well as humanitarian benefits and should be continued,” Wagner wrote.

The report, known as the Popular Annual Financial Report, can be viewed by clicking here.