There are several reasons for the losses in Pittsburgh. These lessons can be applied to several other large cities as well.
First and foremost is the burden of city and city school taxes. Not surprisingly, the four cities where city and school taxes represented the largest share of both total non-federal taxes and income saw significant decreases in population over the decade of the 1990s and so far in this decade. These cities were Pittsburgh, Cleveland, Cincinnati, and St. Louis.
The second problem is a tendency for the public sector to underwrite questionable development in the name of growth. Pittsburgh and other cities that engaged in economic development strategies that focused on subsidizing glitzy entertainment venues, such as sports stadiums, tended to be on the net loss side more often than not. Pittsburgh, Cleveland, Baltimore, and Cincinnati are joined by Detroit, Philadelphia, and Milwaukee as cities that hitched their hopes to stadium-driven economic development that has not panned out as promised.
Lastly, the continuing drop in education quality is a key element in explaining the decline of many of these cities. Emphasis on outcomes, accountability, and cost control will be required if the city school district is to play a role in reversing Pittsburgh's population decline.
Clearly, city and school policymakers have missed or ignored the signals sent by recent population changes. There is no indication that officials are interested in real reform or, even worse, don't think it is necessary. Amazingly, city officials are lobbying for additional taxes. In addition, there has been no effort to tie expenditure growth to population change. It is important to note that if city expenditures had been held to the rate of population growth (decline in Pittsburgh's case) plus inflation over the last 20 years, the current debate would be over what to do with the surpluses rather than how to close the city's budget deficit.