A Need for Self-Reliance

January 24, 1991

The following excerpts are from the Greater Baltimore Committee's report, ''The Strength of Maryland Depends on the State of Baltimore''.

The Greater Baltimore Committee believes that Baltimore cannot reach its vision as a fully contributing partner in the region's inter-dependent economy unless it achieves a degree of fiscal ,, self-reliance that it currently lacks. We believe present taxing structures work against the city's efforts to attain fiscal independence. If unremedied, the city government's financial deterioration will accelerate, leaving the city more dependent on others for its survival.

Existing structures for financing essential governmental services are inadequate and often counter-productive. The GBC believes:

* Baltimore's present $5.95 property tax levy imposes unacceptable burdens on city taxpayers and should be reduced to rates more comparable to those of the region as a whole. This does not necessarily mean absolute parity with the statewide or regional average rate.

* The local piggyback income-tax surcharge, as presently distributed, fails to provide Baltimore (as well as a number of rural subdivisions) with an adequate, reliable and growing source of revenues comparable to other jurisdictions.

* While economic development is key to the city's quest for self-sufficiency, that growth alone will not achieve the goal. The tremendous public and private investment over the past two decades which has made downtown Baltimore an economically vibrant place has not translated into fiscal vibrancy for the city as a whole.

This impressive growth has increased demands on the city to provide additional public safety, public works and transportation-related services. Yet, the financial benefits resulting from this growth have not contributed proportionately as significantly to the city's local tax base. In fact, the state itself has been the biggest beneficiary of the benefits from development of the Inner Harbor as a convention and tourist mecca and a flourishing center for downtown offices -- in terms of higher sales, amusement and income tax receipts.

The counties surrounding the city also have reaped the financial rewards of economic expansion and industrial growth deriving, at least in part, from downtown Baltimore's rebirth. To a large extent, it is the positive image projected by the ''Baltimore Renaissance'' that has attracted the economic development that fuels the suburban counties' growth. Yet, with few exceptions, the counties have not contributed significantly to services and attractions located in the city which serve as a catalyst for their growth.

* The GBC believes there should be joint city-county investments in those opportunities which strengthen Greater Baltimore's economy, including developing and marketing new attractions and supporting existing cultural amenities that provide direct and indirect benefit to the region as a whole.

New mechanisms should be developed under which all of Greater Baltimore's jurisdictions can more effectively reap the financial benefits from their investments. New investment-sharing agreements and revenue-sharing mechanisms should be developed that bring into greater balance both the costs and the benefits of Greater Baltimore's inter-dependent economy.

It is significant that the most pressing issue in the suburban counties in the Baltimore-Washington corridor is the battle to control and manage future growth. At the same time that the counties desperately are seeking to limit population and business expansion, the city just as desperately seeks to add to its population and business base. The counties should view a fiscally independent city as a key part of their own strategies for managing growth. This is another example of the inter-dependent nature of the city's and region's economy.

* Any commitment by the region and state to respond to the city's chronic and worsening financial situation must be balanced by dramatic changes in the delivery of essential services by the city. Just as Baltimore's businesses have had to redefine how they operate to remain competitive in the Nineties, so too must city government.

The challenge to city government goes beyond the classic responses of downsizing and implementing cost-saving efficiencies. Like private businesses, the city must be open to new ways to do old jobs and even reconsider what services it should be and should not be providing. Policy-makers in the city, but also at the regional and state levels, should be open to new ideas, ranging from new technology to merging and consolidating certain services. In some cases, state assumption of selected services would ensure more uniform and efficient delivery of services. In others, more novel approaches may be required, including contracting out and creating multi-government authorities to deliver services.

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