On an unusually balmy February afternoon last week, Allegheny County Chief Executive Dan Onorato, flanked by Pittsburgh Mayor Luke Ravenstahl, stood in a stuffy room at the City-County Building, watching Gov. Ed Rendell promote his budget.

In these times, Mr. Rendell said, with the ever-looming prospect of a national economic downturn, Pennsylvania, unlike many other states, is doing well.

But in his introduction of the governor, whom he praised for yet another "budget that is good for southwestern Pennsylvania," Mr. Onorato referred to a reality in Allegheny County that he called "the budgetary crisis the city and the county are under."

"We have very tight resources," he said.

As the state prospers under Mr. Rendell's surplus projections and the city recovers from financial despair, the economic forecast and health of the county's finances is an increasingly debatable issue among politicians and local government experts.

Some say the county with its ongoing deficits is steadily sliding into a major financial crisis, much like Pittsburgh did a few years ago, because its costs of operation are either going up or remain unchanged, and yet it continues with little or no new revenue.

Others say the problems are linked to Mr. Onorato's decision to essentially freeze property assessments and refusal to raise property taxes, policy choices that could be changed by him or his successor.

This year, the county began levying two new taxes -- a 10 percent drink tax and a $2-a-day tax on car rentals -- to plug a $30 million shortfall in its $727.6 million budget. That money is dedicated as the county's share of costs for Port Authority of Allegheny County.

In its 2007 budget, the county also sold off about $14 million in tax liens and used a last-minute $19.9 million payment from state gambling revenue to cover a deficit.

At this rate, Mr. Onorato's critics like former county Chief Executive Jim Roddey and Carnegie Mellon University economist Bob Strauss, argue that short of raising property taxes, the county and its "onetime fix" approach to budgetary deficits places it on the brink of financial disaster.

"These are all temporary fixes to a long-term fiscal problem. In the end, revenue is not a certainty unless you raise property taxes, and Dan Onorato is obsessed by freezing them because he wants to run for governor," said Mr. Roddey, a Republican who served immediately before Mr. Onorato as the county's first chief executive.

"That's nonsense," said Mr. Onorato a Democrat who has been courting support for a statewide run in 2010. "We freed up $25 million to $30 million in the budget when we shifted funding for mass transit to the [drink and car rental taxes]. And that is real revenue we're going to have every year."

Mr. Onorato has consistently said that the current county millage at 4.69 mills or $4.69 in tax on every $1,000 in value on property, based on 2002 property assessments, will remain unchanged as long as he is the chief executive.

And by 2010, he added, the county may see up to $40 million of new revenue annually from a combination of sources, including host fees from the North Shore casino, expected to open in May 2009, and a $12 million to $17 million payment from state gambling revenues, combined with savings from an even more streamlined government.

Mr. Onorato cut 200 jobs to balance the 2008 budget, the second time in five years that he has eliminated jobs to cut costs.

"We are not taking off the table the fact that you may see further downsizing in county government. We are going to live within our means, but the one thing we will not do is run to property taxes to fix this [deficit] problem," Mr. Onorato said.

In years past, county leaders have relied on annual or periodic updates in property assessments to provide additional revenue without increasing tax millage. Mr. Onorato calls that a "back-door tax increase" and refuses to follow that path. After trying several other methods of assessing property values, he decided to hold assessments at 2002 figures, a move that is being challenged in state court.

Those choices have limited the amount of additional revenue the county has available year after year.

In challenging his critics to embrace a new era when the county does not rely solely on property tax increases for new revenue, Mr. Onorato continues to weather a political firestorm over his push for the two new taxes and the $19.9 million payment the county received from state gambling revenues. The gambling money was supposed to be for airport debts and Mr. Onorato used it for the first payment on $42 million the county spent to help build the passenger terminal at Pittsburgh International Airport.

"[Mr. Onorato] is starting to enter an abyss. He has got the makings of a financial nightmare because he keeps borrowing and spending and yet he has stagnant revenue from a stagnant tax base," said Mr. Strauss, a professor of economics and public policy at the Heinz School of Public Policy and Management.

Citing last year's contentious budget debate, Mr. Strauss charged that county officials did not fully explain the breadth of the county's deficit and the fact that a $19.9 million payment would be needed to close out the 2007 budget.

"I'm in favor of transparency and consolidated annual reporting, and yet there continues to be a couple of things that are not visible in the county's finances," Mr. Strauss said.

Last month, Mr. Onorato told Allegheny County Council members that if the county had not fortuitously received the first installment from a slots-financed state economic development fund on Dec. 31, he would have used all of the county's fund balance of about $17 million to plug the 2007 budget deficit.

Republicans on County Council say they didn't know the extent of last year's shortfall until after the last-minute payment from the state was used to fill the gap.

In light of that, Mr. Roddey -- whom Mr. Onorato has consistently criticized for draining the county's fund balance to the tune of $31 million for budget deficits -- contends Mr. Onorato is boldly steering the county towards financial distress, a path much like Pittsburgh's. The state has placed the city in its program for municipalities in financial distress and has appointed two oversight boards to help with its finances

But Chris Briem, a regional economist with the University of Pittsburgh's Center for Social and Urban Research and a city budget policy analyst, contends that it borders on ridiculous to equate the city and county's budget trajectories.

"The analogy does a disservice to the county," Mr. Briem said. "What got the city into big trouble was its huge unfunded pension liability, and that is not a problem for the county."

A perceived lack of new revenue alone, Mr. Briem said, does not necessarily spell fiscal doom for the county because the decision to freeze property taxes is a political calculation.

"In the long run, county residents might worry if the issue came down to property taxes being completely off the table. But that's a decision of the current county chief executive," Mr. Briem said.

County Council President Rich Fitzgerald, D-Squirrel Hill, agreed. "If there's not a new source of revenue in the next few years, raising the [property tax rate] may be something we need to look at," he said.

Citing surrounding counties, which have raised their millage rates, Mr. Fitzgerald added that the county faces a fundamental question: "Are there new revenue sources that will come about in the next few years?" "Maybe," he said. "It's hard to say."

But Mr. Fitzgerald and Mr. Briem agree that the county has not yet taken desperate measures like Pittsburgh did when it sold off its water department to fund its operating budget.

"Whatever the county is doing now is much better than what the city was doing 10 years ago. The question is whether the county has some big future liability," Mr. Briem said.

Asked whether he gave Mr. Onorato any credit for sustaining the county through all its budgetary upheavals so far, Mr. Roddey said: "I think he started off with the right kind of fiscal discipline. But his obsessions with becoming governor and so his obsession of not touching property taxes is at the root of all the county's financial problems today."

For his part, Mr. Onorato ceded no ground to his critics: "[The county's finances] are tight right now," he said, "but we will not allow to happen in the county what happened to the city."

ANALYSIS