County controller says spending changes needed

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Allegheny County has been acting like a homeowner who sells family heirlooms to pay the gas bill, Controller Chelsa Wagner said on Wednesday.

She compared the one-time sources of revenue county officials have been using to balance budgets to gold jewelry. "But pretty soon you run out of jewelry to sell, and you still have to pay utility bills," she warned.

Ms. Wagner, who was sworn in as controller in January, made the comparison as she released the comprehensive annual financial report prepared by her office.

Financial fixes over the past five years have totaled $199 million, she said. They have ranged from $11.4 million from the 2009 sale of a county-owned office building on Smithfield Street to $1.3 million from a 2011 state grant for county police.

Reliance on one-time revenue sources was one of three black clouds darkening the county's financial picture, she said.

A second major concern is a fund balance that has become dangerously low, she said. That account totaled a little more than $6 million at the end of 2011, well below the $35 million to $40 million bond-rating agencies favor setting aside for emergencies. The fund balance should be equal to about 5 percent of the county's $784 million operating budget, financial experts say.

And cuts in state and federal funding are creating big problems in paying for human services, Port Authority mass transit and Community College of Allegheny County, she warned. Ms. Wagner, a Democrat, laid much of the responsibility for those shortfalls on Republican Gov. Tom Corbett and the GOP-controlled state Legislature.

The county's financial woes have continued despite action by County Council late last year to approve a 21 percent increase in the property tax rate for this year.

Almost all of the additional $54 million expected from the tax hike would go to "plug holes" in the budget, mostly replacing lost state and federal revenues for existing programs, Ms. Wagner said. County spending overall is scheduled to rise only about $16 million for 2012.

County Executive Rich Fitzgerald, who also took office in January, said he generally agreed with Ms. Wagner's analysis and had taken steps to respond to the problems she outlined. He has informed department heads to maintain a hiring freeze on nonessential employees and to stay within or below the amounts budgeted for their departments.

The controller's annual report on county finances contained some positive news as well.

Both property tax and sales tax revenues rose last year, indicating an uptick in local economic activity. Drink and car-rental taxes rose even more dramatically.


Len Barcousky: or 412-263-1159.


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