City's Narrowing Budget Options

December 09, 1992

Now that the City Council has killed the piggyback income tax increase proposal, it is interesting to see whether Baltimore City politicians will seriously begin lobbying for a commuter tax.

The specter of such a tax has often been raised in the past. Just last year the Greater Baltimore Committee reported that nearly 200,000 people commute into the city every day, taking with them $112.5 million a year in income tax revenues when they return to the suburbs. If those people could be taxed according to their work place jurisdiction rather than domicile, what a difference that would make in the city's fortunes, goes the refrain.

A commuter tax is a measure the city would have to seek from the General Assembly. And chances for its passage are slim to nil. Which does not prevent posturing, however.

As City Council President Mary Pat Clarke, who rallied the council against Mayor Kurt L. Schmoke's piggyback proposal, counts the city's options in Annapolis, she sees few left.

"Either give us a commuter tax or honor the compromise" with a predictable aid package that compensates for Baltimore's poverty, she said yesterday, asking also for a genuine equalization of school funding. Referring to this year's major cuts in the state budget even after it had been already adopted, Ms. Clarke added, "We can manage the city, but we cannot do that until we are assured that the state can manage the state."

Mayor Schmoke does not like the commuter tax. But now that the City Council has shot down his piggyback tax increase -- which the state authorized specifically to help local jurisdictions to cope with the recessionary cuts in Annapolis -- Baltimore is left with little room to maneuver. "I think we are really at the end. We don't have much to go," laments a city budget specialist. (Higher property tax rate does not seem to be a realistic choice, as the city already subjects its property owners to a rate that is more than double of that paid in any other jurisdiction).

The city can clearly survive without seeking any new tax revenue. But that would mean drastic austerity measures affecting the police and fire departments as well as education. Up to now those bureaucracies have been left untouched. After four years of gradual downsizing, they account for more than 60 percent of the city expenditures. If any fat is still left in the municipal budget, they presumably have it.

The Schmoke piggyback proposal failed for a number of reasons. The mayor just dropped it on the council, for example. But the council also seemed to feel that while the stepped-up police and fire protection are needed in the city, those services can be funded from the existing budgets through shifted priorities and reorganization.

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