Re-Engineer the City and Tap Its Assets

July 23, 1995|By RICHARD E. HUG

Your recent editorial, ''A Tax Cut That Makes Sense,'' is very disturbing. It condones the present Baltimore property tax rate of $5.85 and sends the message that not much else can be done. Wrong!

Baltimore is at a crossroads. Either it continues to take the slippery path toward self-destruction as its population base erodes below 700,000 or it takes the high road to renewed growth and vigor as businesses and future leaders begin to see the city as an attractive place to work and live.

One key to the high road is a competitive property-tax rate in the neighborhood of $3.85. Such a rate is not only psychologically important in attracting new residents, but would undoubtedly help stem the flight from the city to the suburbs.

Impossible to do? Absolutely not! Such a rate would require a reduction of some $160 million in the $2.3 billion city budget -- a mere 7 percent -- which could be spread over four years (the first term of the next mayor).

Many functions within the city could be privatized: Trash pickup and street maintenance would make a good start. Some cities are even privatizing police and fire departments and their wastewater treatment facilities.

And of course, the privatization of city schools has a potential of vastly improving public eduction, but it will occur only if the privatizer can do the job without constant interference.

To see how beneficial privatization can be, one need look no further than to West Baltimore. When the University of Maryland Hospital was privatized in 1984, it quickly changed from a costly public burden to a profitable, efficient and high-quality growing state-wide resource.

Another source of savings could be Baltimore's tremendous real-estate asset base -- some $3.2 billion at fair market value, with none of it paying property taxes.

The city owns and occupies some 24 million square feet of space, which costs some $140 million a year to operate. Not only would privatizing the operation of this space reap significant savings, but the sale or lease-back of much of the space might yield a ''double banger,'' -- generating enormous capital for the City coffers while the property will return to city tax rolls.

Baltimore has a tremendous ''bag of assets.'' With businesses' creativity and expertise, these can be managed much more effectively. The city should not plan its business around political cycles, but rather develop a management plan that transcends politics and extends beyond the life of elected officials. Perhaps a city-manager form of government could realize better value from Baltimore's rich asset base.

In summary, an all-out assault on the system from the powers, public and private, is needed if the city is to return to the high road. I challenge the city's leadership -- the mayor, the Greater Baltimore Committee, the Baltimore Chamber of Commerce, and the Downtown Partnership -- to come together in order to re-engineer the city and return it to its former All-American status.

Richard E. Hug is a Baltimore businessman and former chair of the Maryland Chamber of Commerce.

The Sun welcomes challenges to its editorial positions, to be published either in this space or as Letters to the Editor.

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