Baltimore doing better than most cities More than half of U.S. cities may float in red ink this year, study says. pTC

July 09, 1992|By Dina El Boghdady | Dina El Boghdady,States News Service

WASHINGTON -- More than half of the nation's cities expect to end up in the red ink this year but Baltimore isn't one of them.

A study released by the National League of Cities yesterday found that 54 per cent of 620 cities, regardless of size, spent more money than they took in and 78 percent were less able to meet their financial needs this year than last.

The study analyzed the cities' general funds, which finance most government operations.

The league, an organization of mayors, council members and other municipal officials representing cities and towns of all sizes, announced the findings in its annual survey of city fiscal conditions.

In responding to the survey, the Baltimore Finance Department reported that it has maintained a positive general fund balance for the last three fiscal years despite Maryland's budget problems, which resulted in two rounds of cuts in state aid this year.

"But the fact that we have a positive fund balance doesn't mean that all is OK," said Doug Brown, a Baltimore budget official.

The cuts cost Baltimore's general fund $21 million and resulted in the abolishment of 283 positions, higher licensing fees and cuts in services, such as shorter library hours, Mr. Brown said.

However, he said that Baltimore may fare better than most cities because Mayor Kurt L. Schmoke implemented a freeze on hiring to reduce the size of government and began cutting costs about four years ago.

"I won't say we were ahead of the game," Mr. Brown said, "but it was fortuitous that we were moving in this direction already."

He also praised the city's strong mayoral form of government that allows the mayor to act quickly to implement cost containment measures.

"We don't have to go through elaborate measures to implement spending controls," he said.

In its response to the survey, Annapolis, Maryland's capital, saidthat it was better able to meet its financial needs in 1992 than it was in 1991.

"We're not as heavily dependent on some of the state aid like other Maryland cities," said John Nolan, deputy finance director of Annapolis.

"We saw this coming and reduced certain categories of the budget. We hope to maintain the same record we've had the past two years by continuing prudent management and watching our expenditures," Mr. Nolan said.

Ocean City told the league that it had a tougher time this year meeting its needs. Martha Bennett, finance administrator of the resort city, said that higher demands for services and lower local tax revenues have taken their toll.

"We had a lot of expense in the general fund including police, recreation, life guards and so on," Ms. Bennett said.

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