Pittsburgh SD projects widening deficits; CFO warns reserves may be exhausted by 2029

CFO Ron Joseph told the Pittsburgh Public Schools Business and Finance Committee on April 13 that the district closed fiscal 2025 with a $26 million deficit and is currently out of compliance with the board's fund-balance policy.

"We ended 2025 with a $26 million deficit," Joseph said, noting the adopted budget had forecast a $28.1 million shortfall. He told the committee the district's unassigned reserves are projected to fall sharply: "At the end of 2028 we will have an ending fund balance of $9.8 million approximately," Joseph said, and that level would not be sufficient to bridge a projected 2029 budget gap.

Why it matters: Joseph's multi-year forecast shows deficits rising again in 2027 to roughly $15.3'15.4 million and staying in the tens of millions thereafter unless the district increases revenue, reduces spending, or both. He said the district would need about a $15.4 million improvement in the 2027 forecast to reach a balanced budget under current assumptions.

Drivers and constraints: Joseph told board members both revenues and expenditures came in about $15 million below budget in 2025; lower-than-expected revenues weakened the fiscal picture even though expenditures were also down. Local earned-income-tax collections grew (Joseph cited an earned-income figure of about $167.6 million for the year), while current-year real-estate collections dipped because of falling property assessments and a larger state property-tax relief allocation. State revenue was up by $4.2 million, but that increase did not offset expenditure growth.

Personnel and program costs were a major factor. Joseph attributed higher salary costs to the end of certain federal ESSER funding, a 2024 bargaining settlement with retroactive pay and payroll timing shifts, and rising special-education and special-education transportation costs. He also said charter-school expenditures were unusually flat because of recent state-level changes that reduced cyber-charter tuition rates, and that debt-service relief from earlier refinancing helped in the near term.

Limits on revenue options: Joseph warned the district's ability to raise local taxes is constrained by the state's Act 1 index, limiting how much the district could rely on tax increases to close the gap.

Board questions and clarifications: In response to board members, Joseph said his office could not find a fully balanced budget in the documents he reviewed going back to 1992. He reiterated that the larger-than-expected 2025 variance reflected lower transportation reimbursement, higher salary and benefit costs including retroactive pay, and timing differences in payroll accounting. When asked whether the forecast was tied to the district's "Future Ready" plan, Joseph said it is not.

What happens next: The committee scheduled two further workshops to refine goals and possible priority investments: a rescheduled session on June 8 and a September 8 workshop to preview the preliminary 2027 budget. Joseph urged the board to set a clear target for deficit reduction and said meeting that target will likely require both revenue and expenditure actions.

The committee thanked Joseph for the presentation and adjourned the meeting.