An independent financial review has found that the City of Erie is facing a major budget crisis, with projected deficits growing sharply over the next five years. The city recently hired Public Financial Management (PFM) to conduct a five-year financial outlook review. According to the report, Erie could face a $12.3 million deficit in 2027 if no corrective action is taken, with that shortfall projected to grow to $24.4 million by 2031. PFM found the city has relied heavily on temporary funding sources over the past several years, including federal stimulus money from the American Rescue Plan Act and prepayments from Erie Water Works, both of which are no longer sustainable sources of revenue.
The review also identified what officials described as a hidden shortfall in the city’s 2026 budget related to pension funding.
Daria Devlin said her administration’s immediate priority is cutting $3 million from the budget while trying to avoid a tax increase in 2027. Since 2020, the city has also added approximately 50 full-time employees, including 20 police officers initially funded through ARPA money.
During a presentation Thursday night, Mayor Devlin and consultants from PFM outlined the causes behind the city’s growing fiscal concerns and discussed possible solutions moving forward. Devlin said the administration’s focus will be on transparency, accountability, and protecting essential city services. PFM is expected to conduct a deeper management audit over the next several months to evaluate staffing levels and departmental operations.
Erie City Council member Tyler Titus, who served on council during the most recent budget approval process, reacted to the findings presented Thursday. Community member Gordan Man also said recognizing the deficit is an important first step and emphasized the need for realistic long-term solutions to stabilize the city’s finances. Mayor Devlin said PFM is expected to return with a more detailed financial outlook and recommendations by August.