End of incinerator pact brings call for tax cut

April 26, 1994|By Eric Siegel | Eric Siegel,Sun Staff Writer Sun staff writer JoAnna Daemmrich contributed to this article.

Baltimore City Council President Mary Pat Clarke said yesterday that savings from the cancellation of the city's contract with the Pulaski Highway incinerator should be used to reduce the property tax rate.

"We want to have the people who have suffered through this contract to realize the benefits," Mrs. Clarke said at a budget hearing before the Board of Estimates.

"I think we're on our way to some sort of tax reduction."

Mayor Kurt L. Schmoke's 1994-1995 budget proposal says first-year savings from the February cancellation of the incinerator contract -- criticized by many as a sweetheart deal for the owner, politically influential developer Willard Hackerman -- would be about $750,000.

But George C. Balog, director of the city's Department of Public Works, said yesterday under questioning by Mrs. Clarke that the savings could be "close to $2 million."

The reason for the additional savings, Mr. Balog said, is that the company operating the East Baltimore incinerator is claiming several million dollars in engineering improvements that haven't been substantiated. Under the terms of its contract, the city must pay a substantial portion of such costs.

"We need $2 million out of this," Mrs. Clarke said of the canceled contract.

Savings of $2 million in operating costs would translate into a cut of about 2 1/2 cents in the city property tax rate. The rate of $5.90 per $100 of assessed value is by far the highest in the state.

Later, an upbeat Mrs. Clarke told colleagues on the council, "It's a good healthy start."

She said the tax rate could be cut by a full 5 cents if the city stopped subsidizing its parking enterprise fund, which covers the debt service and operating costs of seven city parking lots.

Her optimism, though, contrasted with the mayor's noncommittal reaction to her tax-cut proposal.

"I'm continuing to explore a number of different options. We've not finished our review," Mayor Schmoke said after the Board of Estimates meeting.

"If we can provide a tax rate cut, I'd like to do it."

Last year, Mr. Schmoke, who plans to seek a third term as mayor in 1995, and Mrs. Clarke, who plans to challenge him, clashed sharply over the budget.

This month, as the mayor presented his $2.2 billion budget proposal, he said a decline in tax revenues from downtown office buildings left little room for a property tax cut.

Meanwhile, the Pulaski Co., which operates the incinerator, is circulating to city officials and community groups a report urging that a 2-year-old moratorium on the construction of trash-burning facilities in Baltimore be lifted.

The company commissioned the report from a consultant.

The company wants to replace the 38-year-old incinerator with a $200 million trash-to-energy facility.

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