Flat Budget for Baltimore

April 21, 1993

Over the years, Baltimore City's budget analysts have established a solid record for the accuracy of their projections. While some other jurisdictions may have occasionally used overly optimistic assumptions, city analysts have been cautious in their predictions. And for a good reason: even in fat years, Baltimore's municipal government is a beggar that relies heavily on the generosity of the state and federal governments, which together bankroll close to 35 percent of the city's expenses.

The budget year that starts in July will be a good one, according to the city's analysts. Even though the $2.072 billion budget proposal they have prepared for the Schmoke administration is essentially flat, it conveys an optimistic message. No property tax increase beyond the current $5.90 per $100 of assessed value. No major cuts in service. No massive layoffs.

For the first time in three years, the budget even proposes a pay increase for the municipal work force. And all this without even taking into account revenues that might be collected from a modest piggyback tax increase proposed by Mayor Kurt L. Schmoke or from a stimulus package President Clinton is fighting for in Washington.

No wonder City Council President Mary Pat Clarke exclaimed that "although we still are hanging in fire, the worst of this recession is over."

Yes and no. While the Maryland and the nation may be coming out of a recession, the city's fiscal woes persist. It is a constant dilemma.

"The [property tax] assessment base has flattened out; we don't expect much growth whatever," the city's Budget Chief Edward J. Gallagher told the Board of Estimates. Equally sobering are figures that show only minor improvement in income tax receipts, which actually declined in Baltimore City in calendar year 1991.

In this light, largess from Annapolis and Washington may ease the city's long-term pain but does not remove it.

The fact that Baltimore has again managed to avoid a debilitating fiscal crunch only underscores the importance of further orderly down-scaling of municipal government. The city must continue to find alternative ways of doing things that are not cost-effective or needed. Bureaucracies must be merged or rejuggled, personnel trimmed.

The absence of a budget emergency gives the Schmoke administration -- and the City Council -- another opportunity to improve the city's long-term health.

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