Colin McNickle: Challenging Pittsburgh’s ARP Spending

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The city of Pittsburgh has finalized how it will spend more than $ 335 million in US bailout money. But serious questions abound, says a researcher from the Allegheny Institute for Public Policy.

“With the resolutions approved and a reporting system established, there are still public policy questions that may not be answered until the money is spent,” says Eric Montarti, research director at the Pittsburgh think tank .

ARP’s state and local government budget recovery funds will send $ 350 billion to states and virtually every local government nationwide. The largest municipal allocation in Allegheny County is for the city of Pittsburgh at $ 335.1 million. Half have been received; the other half will be paid in 2022.

A trust fund to hold the money has been created. An external auditor has been hired to monitor expenses. And a four-year spending plan has been approved.

It designates $ 180.2 million (53.8%) for the City’s operating budget; $ 59.9 million (17.9%) for the capital budget; $ 17.5 million (5.2%) for the Pittsburgh Water and Sewer Authority (PWSA); $ 75 million (22.4%) for the Urban Redevelopment Authority (URA) and $ 2.5 million (0.7%) for OnePgh, a non-profit organization.

It is this latter appropriation that has sparked considerable debate. The group will administer a guaranteed income pilot project, making payments of $ 500 per month to 200 low-income households for two years. Among those targeted, 100 will be black women. Recipients would be limited to those earning 50% or less of the region’s median income to be eligible.

But questions persist. One is the effect that the pilot income program money will have on employment. According to July labor statistics, there are 8,000 fewer people in the labor force (employed or looking for a job) in Pittsburgh compared to July 2020.

“Will the payments deter job search activities for beneficiaries who do not have a job?” Montarti asks. “Will this cause those who are employed to leave their jobs?” Will the payments be subject to state and / or federal tax, and will they affect eligibility for other income-tested benefits? “

“What is the opportunity cost” – the potential loss of gain from other alternatives when an alternative is chosen – “of the $ 2.5 million in ARP dollars? ” he asks. “Will there be calls to continue the program after the pilot expires?” If so, what tax would be increased or what existing program would be reduced to find the money from city funds to do so?

And there are also questions about the other credits, as if the finances of the authorities who received the money are being examined.

“Watching ARP dollars… is an important endeavor,” Montarti stresses.

In addition to additional measures adopted by the city, local governments with populations over 250,000 are required to file annual stimulus performance reports for ARP dollars with the US Treasury.

“With $ 335 million for Pittsburgh, $ 383 million for Allegheny County and $ 130 million for other municipalities in the county, taxpayers deserve no less,” concludes Montarti.


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