The city's $2.07 billion budget proposal holds the line on services, avoids layoffs and maintains the current property tax rate.
The proposed operating budget of $1.787 billion shows a spending increase of $34.4 million, or 1.8 percent, over the current fiscal year, one of the lowest increases in nearly 10 years.
The proposed $266.4 million capital budget increases spending by 6 percent over the current fiscal year.
Overall, the combined budget, recommended to Mayor Kurt L. Schmoke by the city finance department, increases spending by only 2.3 percent over the current budget. If would take effect July 1.
Budget Director Edward J. Gallagher, who unveiled the spending plan yesterday, said that a wage freeze, which saves the city $38.1 million, the elimination of 238 mostly vacant JTC positions and a special state grant of $9.9 million were the keys to closing a projected $54.1 million revenue shortfall and balancing the proposed budget that would fund both operating expenses and capital projects.
The city's property tax rate would stay at the current $5.95 for each $100 of assessed value.
Released by the budget office late yesterday, the proposed spending plan went to the Board of Estimates today. The board will hear agency appeals the rest of this month before it makes any revisions and approves the budget. A taxpayers night is planned for April 30.
The mayor will then present his budget to the council in early May and has until June 30 to adopt it. Under the city charter, the council can only cut the budget; it can not transfer or add funds.
The preliminary budget held little in the way of surprises. Agency budgets were either increased or decreased only slightly under Finance Department recommendations.
Under the proposed budget:
* The number of police and fire personnel would remain virtually unchanged.
* Present school class sizes would be maintained.
* The rat eradication program would be reduced because of the loss of state aid.
* There would be no new closings of recreation centers or library branches.
But the proposed budget does paint a bleak picture. The anticipated growth of general fund revenue for 1992 is 1.3 percent, or $10.1 million, the lowest increase since 1983, Gallagher said.
And, the amount of money generated by the property tax is expected to be around $471.9 million, or an increase of 3.3 percent, over last year. The normal rate of increase from one year to the next has averaged around 5 percent, said Gallagher.
Income tax revenues would increase an anemic 1.5 percent because a sluggish economy has resulted in layoffs in the private sector and business failures, according to Gallagher.
Projected real estate recordation and transfer taxes of $16 million would amount to a decrease of 18.7 percent from last year, reflecting a downturn in the housing market, he said.
Gallagher said the only relief from declining revenues is for the state legislature to take some action next year on the changes in Maryland's tax system recommended by the Linowes Commission.
The commission recommendations would generate $800 million in new taxes, much of it going to Baltimore and the poorer counties.
"We've pared city personnel down to an exceedingly thin level over the last three years," Gallagher said. "If the revenue picture isn't changed next year, we are looking at reduction or elimination of some services."
Through a hiring freeze that has been in place since December 1989, the city has eliminated more than 1,500 positions, Gallagher said.
A big help, Gallagher said, was the state takeover of the jail, which saved the city about $38.5 million. But the city had to give up $37.7 in police aid as part of the deal.
"Although for this year, the saving is a wash, the jail's budget was growing by about 12 percent a year so the saving down the road will be substantial," Gallagher said.
If the current property tax rate is maintained, Schmoke will not realize his hopes for a 10-cent reduction.
Two years ago, the council embarked on a three-year plan to reduce the tax rate -- at that time $6 -- by 15 cents. Five cents was shaved off the rate for fiscal 1990 but last year, the mayor asked to the council not to make another 5-cent reduction. In return, Schmoke said he would try to find a way to reduce the rate by 10 cents this year.
Gallagher pointed out that there is tax relief for residential property owners that equals a 3-cent reduction in the rate.
Last year, Schmoke approved a reduction in the increases in assessments -- the taxable portion of a home's value -- from 15 percent to 4 percent a year. That would be a saving to property owners but cost the city about $2.5 million this coming fiscal year.
Councilman John A. Schaefer, D-1st, who authored the 15-cent reduction plan, said he wasn't surprised by the mayor's decision to maintain the current rate.
"If there were additional revenues out there, he would almost have to restore the wage increases he froze before using the money to reduce the tax rate," Schaefer said.
But Council President Mary Pat Clarke said that through cuts that could be made when the City Council takes up the proposed budget, the opportunity still remains to cut the tax rate 5 cents this year.
One factor that could alter the proposed budget and raise the possibility of layoffs or reductions in municipal services, Gallagher said, is the repeal of the container tax. The Finance Department has included $6.9 million from the tax in the proposed budget.
The council gave preliminary approval Monday night to the repeal of the controversial tax by May 31. To replace that revenue, it is considering legislation that would impose a $10-a-ton surcharge on top of the tipping fees paid by haulers of commercial waste at municipal landfills and incinerators.
But Gallagher said the surcharge may bring in only around $4.8 million annually.