We will tackle this together.
That was the sentiment from Erie City Council members as they learned more about a looming $12 million budget deficit during a public study session May 14 at Erie City Hall.
Council heard from both Mayor Daria Devlin and Gordon Mann, director of Philadelphia-based Public Financial Management Inc. during the 70-minute session.
PFM has been hired by the city as its state-required consultant for the Pennsylvania Department of Community and Economic Development’s Strategic Management Planning Program.
The financial picture
Mann explained to City Council members that the city faces a general fund budget deficit exceeding $12 million in 2027 absent major financial changes.
Fiscal concern: The city of Erie is staring at a $12M budget deficit. What’s next?
The massive budget hole is due to a variety of factors, including pension costs; dwindling one-time revenues; rising employee-related costs; and stagnant revenues.
Gordon Mann, director of the Philadelphia-based consulting firm Public Financial Management, talks with city of Erie officials May 14 during a public study session on a $12 million budget deficit the city faces.
Mann told the Erie Times-News that city officials will likely need to consider various options, including but not limited to personnel cuts and/or a property tax increase, to close the budget gap.
City Council has final say over the city’s budget and will have to approve any expense cuts or new revenues.
“You will be part of this solution,” Mann told City Council members.
Mann said the city is not broke, and pointed out that Erie still has millions in cash reserves.
Erie Mayor Daria Devlin.
However, he said, expenses have significantly outpaced revenues over the last several years. And a 2026 budgeting error related to pension funding is responsible for about $8 million of the $12 million deficit, he said.
The 2026 budget was the last prepared by former Mayor Joe Schember’s administration.
Devlin told council members she is working with other city departments to identify roughly $3 million in cost savings immediately.
“Everyone is combing through budgets, everyone is looking to where we can save money,” Devlin said.
Additionally, Devlin said she will likely be bringing suggested “management and non-bargaining” personnel cuts to City Council soon. Police, firefighters and unionized blue- and white-collar workers will not be immediately affected, she said.
City Council reacts
Councilman Andre Horton was among the most vocal at the May 14 study session.
Horton suggested the city immediately approach county government officials, including County Executive Christina Vogel, about conducting a new countywide reassessment of properties.
That would set new taxable values for many properties countywide. Horton said that is important to a city like Erie that has a sizeable percentage of tax-exempt properties.
Pennsylvania is the only state that does not mandate regular countywide property reassessments.
The last county wide reassessment was conducted in 2013. Another was scheduled for 2023, but the COVID-19 pandemic interrupted county government’s plans.
Horton also said the city needs to look for ways to compel nonprofits and tax-exempt entities to contribute financially to the city, since so many do not pay property taxes but benefit from services such as police and fire protection.
“I think its time for them to pony up,” Horton said.
Erie City Councilman Andre Horton.
Devlin said she met the afternoon of May 14 with a number of tax-exempt and nonprofit organizations at the Warner Theatre, shortly after a press conference on the city budget deficit.
“We talked to them about how they can help us,” Devlin said, adding that there will be follow-up conversations soon about possible financial support from those entities.
Councilman Ed Brzezinski urged city officials to consider the impact on Erie’s citizens.
No matter what financial decisions are made, “We’ve got to remember all the people in the city on a fixed income,” Brzezinski said.
Council President Tyler Titus expressed frustration, saying that Council asked pointed questions during Schember’s tenure about the state of city finances.
“We do look like we let people down with our fiduciary oversight,” Titus said.
‘Getting to work’
Horton, however, had a different take.
“We can fix it. I’m not running from it, I’m not here to to point the finger or vilify,” Horton said. “I look forward to rolling up my sleeves and getting to work on it.”
Mann reminded City Council members that the Erie School District survived a financial crisis so severe that it involved state oversight of the district’s finances.
PFM also worked with the school district on its five-year financial recovery between 2016 and 2022, appointed by the state to help guide that process. Devlin and Titus were both members of the Erie School Board at the time.
“You, as a community, figured it out,” Mann said. “That’s what gives me encouragement here that you’ll do it again.”
Contact Kevin Flowers at kflowers@timesnews.com. Follow him on X at@ETNflowers.
This article originally appeared on Erie Times-News: Erie budget deficit solutions discussed at study session