Bailed out by the General Assembly, Mayor Kurt L. Schmoke yesterday unveiled a budget for next year that would increase the number of police officers, significantly raise education spending and reduce Baltimore's work force -- all without a property tax increase or layoffs.
The budget proposal, however, would close 10 of the city's approximately 80 recreation centers and would require Baltimore's 26,311 city workers to endure a second straight year without salary increases. "We're not in such fiscal shape that we can go back to giving annual pay raises," Mr. Schmoke said. "Not yet."
That position is likely to provoke a confrontation with employee unions.
City firefighters are set to go to arbitration to try to force a pay raise in their next contract, Mr. Schmoke said. Don W. Helms, president of the city Fraternal Order of Police Lodge 3, said police officers would "most likely end up in court" to protect their negotiated 4 percent raise. And Linda Prudente, spokeswoman for the Baltimore Teachers Union, said the union was reviewing the city's fiscal situation to determine its position on pay.
There is one sweetener for city employees: Mr. Schmoke has rescinded 2 1/2 furlough days for city employees because the state restored some $9 million in cuts in aid to the city. The five furlough days, which were to have come out of the employees' pay at the rate of one-half day's pay for 10 pay periods, began in mid-February and will be discontinued in city employees' next pay check, Mr. Schmoke said.
The budget proposal assumes that the city would retain its piggyback income tax rate at 50 percent of the state income tax rate -- a fact that may change during Board of Estimates budget deliberations.
The General Assembly recently passed legislation allowing local governments to raise their income tax rates or "piggyback tax" to as much as 60 percent of the state tax rate --which the state estimates would provide the city with $25 million annually plus a one-time $11 million windfall, the latter because the tax could be retroactive to Jan. 1.
Despite the lure of desperately needed new money, Mr. Schmoke said the city would likely follow Baltimore County's lead in setting its income tax rate.
"I don't think that we can stand alone in this piggyback-tax matter," Mr. Schmoke said. He said he doesn't want to increase the already-stark taxing disparity between the city and its suburban neighbors.
all, the proposed budget appropriation for the fiscal year beginning in July totals $2.067 billion, just a 1 percent increase over last year.
The operating portion of the budget appropriation is $1.86 billion, a 4.2 percent increase over last year. The remaining capital budget of $203 million pays for construction work such as street repairs and city construction projects.
The actual proposed spending within the operating budget, however, is $176 million lower, because of a technical requirement that that figure appear in two appropriation categories, according to city budget officials.
As a result, explained budget chief Edward J. Gallagher and one of his assistants, Monte Mordecai, the city's actual total proposed spending would be $1.891 billion, of which $1.687 would be in the operating budget.
Much of the new spending outlined in the budget comes as a result of desperately needed state aid to the city. Without significant state help, Mr. Schmoke had predicted drastically scaled-back services including shuttered library branches, many more recreation-center closings, and no increases in police protection.
The General Assembly came through with help on several fronts, among them:
* A $3 million grant to control violent crime that the city will use to hire 72 new police officers. Combined with other recent expansions of the 3,000-officer force, there should be 163 more officers on the force this fall than a year ago, Mr. Gallagher said.
* A $33.4 million increase in state aid to city education. That increase more than offsets a $5.8 reduction in direct city support for education.
* A $24 million "disparity" grant from the state that softened the impact of cuts in other state programs. In all, the city next year will likely have $6.5 million less in non-targeted state aid than it did at the beginning of the current fiscal year -- which still gives the city more than it had expected.
"We are not out of the woods yet," Mr. Schmoke said, while expressing thanks for the increased state aid. "They have simply given us a reprieve, a little breathing room for a year. That overall, long-range, structural problem is still there."
Indeed, the budget illustrates the city's problems in raising revenues on its own. The city expects its property tax base to grow by only 2.5 percent next year, a condition budget officials attribute to the general economic recession.
As a result, the city's property tax -- already by far the highest rate in the region -- has relatively little revenue-generating muscle.