Schmoke calls on council to find money for tax cut

April 14, 1994|By JoAnna Daemmrich | JoAnna Daemmrich,Sun Staff Writer

Seeking to forestall a last-minute budget battle, Mayor Kurt L. Schmoke is challenging the City Council to come up with the savings or cuts in services needed to reduce Baltimore's property tax rate.

The mayor, who says a decline in tax revenues from downtown office buildings and utilities has left little room for property tax relief, made clear yesterday that he's determined to avoid a reprise of last year's clash over the budget.

"At this point, it appears that if we have a property tax cut, it will mean a loss of services," Mr. Schmoke said, after his $2.2 billion budget plan was presented to the Board of Estimates. "Show me where you're going to cut or where the other sources of savings are."

The Schmoke administration's austere budget, which stresses education and public safety, would offer no tax break and no cost-of-living pay raises for city workers. Yesterday's briefing was the first formal step in the two-month process for adopting the budget.

Mayor Schmoke's latest warning about cutting the property tax rate -- which at $5.90 per $100 of assessed value is the highest in Maryland -- promptly drew criticism. A number of council members, as well as a grass-roots coalition fighting to reduce property taxes, argued again that the mayor is backing down on a tax-break pledge he made last year.

"I was told a year ago that we would definitely have a significant cut this year," said Councilman Carl Stokes, a 2nd District Democrat. "I think it's unfair to ask us to do this after the budget has been set up. It's a setup. The administration is the one that knows where they can cut."

Councilwoman Sheila Dixon, a 4th District Democrat, recalled that the mayor said he was "committed" to reducing taxes last June after his veto of a council budget that included a 5-cent cut in the tax rate. Mr. Schmoke said that that council budget did not provide enough money to hire the additional police officers the city needed.

"I thought the administration made clear they would cut the budget this year," Ms. Dixon said, adding that she would push for cuts in spending on the school administration and the Baltimore Development Corp., a quasi-public economic development agency.

The mayor and city budget officials say lower-than-expected property tax revenues and a large number of commercial assessment appeals make impossible even modest pay raises or a minor tax cut.

Last year, city workers got cost-of-living increases averaging about 2 percent, the first in three years.

Edward J. Gallagher, Baltimore's budget director, reminded the Board of Estimates yesterday that the fiscal news is fairly bleak because of declining property values. "It has been a difficult budget, trying to maintain the level of services and trying to deal with the revenue problem."

Mayor Schmoke said he's not ruling out a tax cut -- as long as the council can show him how to afford one.

"I don't want to be in a situation of having to veto a budget," he said.

Council President Mary Pat Clarke, who skirmished with the mayor over the budget last year, appeared annoyed by the move to get the council to make the unpopular decisions.

'Almost no power'

"It's his commitment," she said. "The ball's in the mayor's court. The savings are within his power."

Councilman John L. Cain, a 1st District Democrat, complained that the council can't propose cuts because it doesn't see the full budget until after all the agency hearings.

"The mayor is bouncing it into our court, and the council has almost no power over the budget," he said. "It's almost ludicrous to make the council the scapegoat. The only thing we can do is rubber-stamp it, make cuts or disapprove it."

Although there's no tax cut, the mayor's budget plan calls for the city to maintain its cap on annual assessment growth of residential homes at 4 percent. Mr. Gallagher said the cap provides $7.7 million in tax relief, the equivalent of a 10-cent cut in the tax rate.

Daniel J. Loden, president of the Baltimore City Homeowners' Coalition for Fair Property Taxes, says that's not enough. A tax break is needed to halt the flight of middle-class homeowners to the suburbs, he said.

"We're very disappointed in the mayor's failure to keep his promise," he said after the Board of Estimates meeting.

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