Clarke lashes out at plan to increase piggyback tax

April 21, 1993|By Eric Siegel | Eric Siegel,Staff Writer

A visibly angry City Council President Mary Pat Clarke said yesterday that the proposed piggyback income tax increase was not needed because savings next year of $4 million in Police Department health, pension and retirement costs could be used to put more officers on the streets.

"Give back to the police what they generate, and let's stop playing games with this piggyback tax," Ms. Clarke said heatedly.

Her comments, made during a hearing before the Board of Estimates on the preliminary budget for fiscal 1994 that begins July 1, represent the latest escalation in the war of words over the proposed piggyback increase.

Mayor Kurt L. Schmoke has proposed increasing the tax -- calculated as a percentage of the state income tax -- from 50 percent to 52 percent. He says it would generate $4 million a year, enough to hire 120 officers to combat a recent crime wave and speed up community policing. Opponents of the plan don't deny more officers are needed but say other funds should be used.

Ms. Clarke's comments drew a sharp retort from city Budget Director Edward J. Gallagher during the hearing, which also included sharp questions about a projected $2 million surplus in the current fiscal year that ends June 30, and a more measured response from the mayor later.

Mr. Gallagher told Ms. Clarke that the police had "nothing to do with the savings" in health and pension costs.

He explained they represented a one-time adjustment because a prior payment turned out to be too large and would likely have to be increased in fiscal 1995.

After the hearing, Mr. Schmoke continued to insist that the tax increase was needed to ensure permanent funding for new officers.

"We need to get a predictable and recurring source of money if we're going to hire more police. The best way to do that is to increase the piggyback," he said. "Relying on a surplus is a very unpredictable way of doing business."

Meanwhile, City Comptroller Jacqueline F. McLean said she has a plan to change the management of the city's real estate investments that could generate $10 million in savings.

"If I can get the mayor to buy into what I'm suggesting, I think the piggyback [proposal] will die," said Ms. McLean, who refused to be more specific until she has a chance to brief Mr. Schmoke.

It was the second day in a row that talk of the piggyback tax and police surpluses dominated City Hall. Monday night, the council, back from a two-week spring recess, set a hearing for next Wednesday on this year's projected $2 million surplus in response to a resolution by Councilman Martin O'Malley, D-3rd. The council must approve any increase in the piggyback tax. Ms. Clarke, who opposes the plan, said late yesterday that she rated its chances for passage a "tossup."

Disclosure of the savings in health and retirement costs for fiscal 1994 came in documents submitted by city budget officials. They showed the items known as "other personnel costs" declining from $47 million this year to $43 million next year. But the overall police budget showed a decline of $232,000 because the money was not reflected in the budget.

The total police budget is about $174 million.

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