When the city finance department presented its proposal for a $1.86 billion operating budget last week without any unexpected disastrous consequences, a relieved City Council President Mary Pat Clarke shouted with joy. "I consider us to have turned the corner," she whooped.
Not so fast, Mary Pat.
The city emerged in pretty good shape from an unpredictable legislative session in Annapolis. But that does not mean the city's basic circumstances have changed.
The middle class still continues to move out, bleeding property tax revenues. In fact, the property tax base yield, which experienced impressive growth between 1986 and 1991, has begun to flatten out. This, of course, reflects the overall condition of the economy. Unless the trend can be changed, it spells long-term trouble for the city, which desperately needs more revenues.
There are short-term worries, too.
The budget proposal recommends no pay increases for municipal employees for the second year in a row. Whether this line holds depends on the outcome of a court case in which the firefighters' union claims its arbitrated settlement with the city entitles it to a pay hike regardless of what other employees get. Stay tuned. Mayor Kurt L. Schmoke was right when he cautioned: "Folks, we are not out of the woods yet."
Over the past four years, the Schmoke administration has begun a systematic downsizing of the bloated municipal government. The mayor says further trimming is inevitable. Also in the cards is a reorganization of the bureaucracy, starting with the privatization of the Baltimore City Museums and the merger of the public works and transportation departments next year. Wall Street seems to approve this belt-tightening. Despite many problems, leading bond agencies recently renewed the city's top credit rating.
Continued austerity is in the cards. But if a crisis can be avoided -- as it apparently has been for this year -- the city can do the necessary rearranging of priorities and expenditures in an atmosphere of calm. Citizens also can draw reassurance from such important symbolic moves as the hiring of 163 new police officers and funds that will enable the Enoch Pratt Free Library to keep five threatened branches open.
During its recently concluded session, the General Assembly gave local jurisdictions the right to increase piggyback income taxes. This could create some badly needed additional revenue for the city. But unless neighboring counties also decide to increase the piggyback tax, that option, because of competitive reasons, may be closed to the city. The Board of Estimates and the City Council will have important political decisions to make.