Budget plan: no pay raise, no tax rate cut

April 06, 1994|By Eric Siegel | Eric Siegel,Sun Staff Writer

Baltimore would offer no cost-of-living raises to city workers and no cut in the property tax rate to homeowners under the preliminary budget plan for the fiscal year that begins July 1.

Mayor Kurt L. Schmoke's $2.2 billion proposal stresses public safety and education. The city would hire 80 more police officers and 81 more teachers, although the overall number of city workers would grow by just 54.

The austere budget plan, which officials said is made necessary by a decline in property tax revenues, will be presented next week before the Board of Estimates, the first public step in the two-month process for adopting a budget. The presentation, originally scheduled for today's meeting, was delayed because of the death of Mayor Kurt L. Schmoke's half-brother.

The budget proposal, which includes $2 billion in operating expenses and $200 million for construction projects, drew quick criticism yesterday.

"The budget's a slap in the face," said Linda D. Prudente, spokeswoman for the Baltimore Teachers Union, which represents 8,300 teachers and aides.

And, despite the bleak fiscal news underlying the proposal -- which would mean an increase of just 1 percent -- several City Council members vowed to push for a cut in the property tax rate.

City Council President Mary Pat Clarke, who clashed with Mr. Schmoke over the appropriateness of a property tax cut last year, said she would seek a cut again this year. Ms. Clarke, who plans to challenge Mr. Schmoke's bid for a third term in 1995, said a cut was needed as part of a broader program to economically revitalize the city.

Tax base problems

"We have some problems with the assessable [tax] base. We need to take aggressive action to get that base healthy again," she said.

Under the preliminary budget plan for fiscal year 1995, the property tax rate would remain at $5.90 per $100 of assessed value.

But the plan also calls for Baltimore to maintain its cap on assessment growth of owner-occupied residential property at 4 percent -- less than half the 10 percent annual growth allowed under state law.

Budget officials say the cap would provide $7.7 million in property tax relief to city homeowners, or the equivalent of about a 10-cent cut in the tax rate.

Last year, city workers got cost-of-living increases averaging about 2 percent, the first such raises in three years. The proposed fiscal 1995 budget provides no money for even such modest increases, officials said.

Edward J. Gallagher, Baltimore's budget director, said yesterday that the city's inability to cut the property tax rate or provide raises for workers was a direct result of declining property values.

"It's been a very difficult budget because of the lack of revenue jTC growth. The impact of the recession on our property tax base has really been felt," he said.

The city expects to get $470 million from the property tax in the next fiscal year, a decline of about $6 million from the estimate for the current fiscal year, Mr. Gallagher said. He said the decline was the result of a slowdown in the real estate market, particularly in commercial properties downtown, and in corporate investment in equipment.

Tax cut sought

Mr. Schmoke, who said last June that he was "committed" to cutting the property tax rate, said as recently as three weeks ago that because of declining property tax revenue the city would not be able to maintain services and cut the tax rate.

Daniel J. Loden, president of the Baltimore City Homeowners' Coalition for Fair Property Taxes, said a tax cut was needed to reverse the exodus of middle-class homeowners to the suburbs. He said the city could trim fat in the budget.

"We're not really confrontational, but we're ready to get tough," he said.

Mr. Gallagher said the proposed budget did not include money for all existing city positions, but he declined to say how many jobs were unfunded. Resignations and retirements should allow the city to avoid layoffs, he said.

City unions, meanwhile, are looking for raises at least equal to those received last year. Firefighters, the first of the city unions to negotiate, have gone to arbitration over this year's contract, Mr. Gallagher said.

More teachers, officers

The budget does include money to hire 80 more police officers, part of a previously announced four-year plan to boost the Police Department's strength by 240 officers. Funds for the positions would come from savings in retirement expenses and a $600,000 federal grant.

The budget also calls for hiring 81 more teachers to handle an expected increase of 2,600 students.

These hirings would be partly offset by cutting 40 health workers and 33 recreation and parks employees.

State and city contributions to Baltimore's public schools would be up $21 million over the current year's but would be partly offset by a $4.5 million decline in federal funds.

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