Mayor calls for tax rise in state Layoff "tragedy" must be avoided, Schmoke says.

October 03, 1991|By Michael A. Fletcher | Michael A. Fletcher,Evening Sun Staff

Warning that proposed state budget cuts could force 800 city layoffs and gut vital programs, Mayor Kurt L. Schmoke has called on state legislators to summon the political courage to raise taxes and avert an impending "tragedy."

"What too many people think they're hearing is that the public is saying they don't want any new taxes, no way, nohow," Schmoke said at a news conference yesterday.

But Schmoke said politicians who believe that are engaging in "ostrich politics. This is where you take your head and put it firmly in the sand while everything is crumbling all around you."

Schmoke repeated his call for a special legislative session to raise taxes that would allow Gov. William Donald Schaefer to restore the cuts. Without a special session, the city would be plunged into a deep crisis when the state cuts take effect Nov. 1, the mayor said.

Overall, Schmoke says, the city stands to lose $21 million as a result of Schaefer's action to trim the budget to eliminate a $450 million state budget gap.

That money is spread throughout the city budget, paying salaries for police officers and firefighters, preschool teachers, visiting nurses, recreation workers and librarians.

Schmoke said city budget officials are still trying to assess the full impact of the state cuts. But initial assessments indicate they will cause libraries and recreation centers to close or reduce hours; cause reductions in preschool programs for 1,200 children at 62 locations in the city; and prompt cuts of at least $3 million in the police, fire and education departments.

If the city dealt with the cuts strictly through layoffs, Schmoke said, 700 to 800 city employees would lose their jobs. Overall, the city has more than 26,000 employees. Schmoke said a detailed impact statement will be given to the City Council during a briefing by budget officials Monday night.

Schmoke said the state cuts also would reduce funding for "third-party" recipients -- typically non-profit groups that run social programs on contract with the city. Among them are programs at the House of Ruth, the Waxter Center and the American Indian Center.

"To call the effects of these cuts devastating is an understatement," Schmoke said. "This is a tragedy."

Making matters worse, Schmoke said, is that many of the cuts proposed by the state do not affect the city budget but still hurt the city.

Among them is the elimination of general public assistance, which provides subsistence grants to 24,000 indigent people -- 75 percent of whom live in Baltimore.

"This is going to dramatically change the quality of life here in the city," he said. "There will be more people living on the streets at a time when we don't have the resources to deal with it."

Schmoke said that elimination of prison education and religious programs could lead to inmate riots. He added that there would be an increase in crime and possibly "riots in the street" if the state budget cuts are carried out.

Schmoke said that the city, unlike many of its more wealthy suburban neighbors, cannot raise taxes.

Already, Baltimore's $5.90 property tax rate per $100 of assessed value is more than double that of any other jurisdiction. Also, city taxpayers pay a series of nuisance taxes, including a tax on beverage containers, which most Marylanders do not face.

As a result, the only hope the city has for escaping a deep crisis is for the state to call a special legislative session and raise taxes by Nov. 1, Schmoke said.

Among the tax options are an increase in the sales tax, raising the gasoline tax or changing the "piggyback" income tax so the revenue flows to the place where income is earned, rather than the jurisdiction where the taxpayer lives.

He also said the crisis should spur the legislature to look at making "significant corrections" in the state tax system soon.

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