Irresponsible Flip-Flop

May 20, 1994

The bad news for Baltimore's day-to-day governance is that Mayor Kurt L. Schmoke is running so scared of his challenger, City Council President Mary Pat Clarke, that he is allowing fears to affect his decision-making. Nothing else explains his peculiar flip-flop on the budget.

More than a month ago, when Mr. Schmoke unveiled his initial budget proposal, he said Baltimore's fiscal situation was too tough to permit a tax cut. After Ms. Clarke and several council members made it clear they would engineer a cut anyway, the mayor decided he could not afford to let someone else claim credit for lowering the tax rate. He ordered his minions to slash enough allocations to give city employees a 2 percent raise and property owners a cosmetic 5-cent cut. The owner of a $100,000 house will save $20 in taxes.

Politically, all of this may make sense. Fiscally, Mr. Schmoke is guilty of gross irresponsibility.

Not only has a $6.4 million capital budget account been reduced by a third, thus cutting preventive maintenance, but a $4.2 million rainy day fund for emergencies has been decimated.

As a result of the latter action, Baltimore may have its all-important bond rating lowered because it no longer has the emergency reserves Wall Street agencies so dearly love. In fact, those agencies recommend that a city with a budget as large as Baltimore's should always carry a surplus balance somewhere between $24 million and $40 million.

Mr. Schmoke's flip-flop is particularly worrisome because his past fiscal management has been responsible. As a result, the city was able to navigate through the deep recession without budget scares. As the economy now slowly recovers, Baltimore's budget picture is getting gloomier, however. Instead growing, the city's tax base is shrinking. Because the value of many choice residential and commercial properties has declined drastically, that trend is likely to accelerate.

Times like these require political and economic skills as well as strong leadership from the mayor. The truth is so bitter it should not be sugar-coated.

A high tax rate is only one reason cited by those residents who move out of the city. A feeling of insecurity and a person's inability to get such irritants resolved as trash and noise are others. Instead of skimping on basic services, the city ought to improve them if it hopes to stem the flight.

The Schmoke administration also should step up economic development. That is a key long-term solution to Baltimore's problems.

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