May 11, 1996
IT LOOKS DOUBTFUL that Mayor Kurt L. Schmoke can generate enough support to get his proposed piggyback income tax increase approved by the City Council. Council members know voters have long memories when it comes to raising taxes. Besides, the mayor has tried hard but been unable to convince council members or the public that the only alternative is to raise taxes.
Council President Lawrence A. Bell III believes a tax increase may not be necessary if an early retirement plan he is proposing significantly trims the city work force. But that is a big "if." Mr. Schmoke has already factored into his proposed $803 million general fund budget the impact of an early retirement program. Mr. Bell's plan would speed up those retirements to increase the impact in the first two years. But no one knows what will actually happen.
The important thing, though, is that elected officials are considering plausible alternatives to a tax increase. The mayor plans to shut down five of the 14 satellite offices he has around the city, thus saving $202,000. Funding the remaining hubs may be accomplished through federal community development grants. He will also end a scholarship program, budgeted at $386,000 a year, in which he and each council member had access to funds to provide grants directly to students or colleges.
Two new revenue-raising ideas will stir more controversy. The mayor wants to collect the tax on parking fees on a gross receipts basis, rather than per transaction, which could bring in an additional $2.5 million. And he would end the exemption to the 8 percent energy-fuels sales tax now enjoyed by non-profits such as hospitals and churches. That would bring in another $2.4 million.
The last two actions alone would provide the additional $4.9 million needed to fund the mayor's proposed 1997 general fund budget without raising the piggyback tax. But even if the council can resist lobbying by the non-profits and parking-lot operators, those ideas aren't enough to solve the city's money problems that go far beyond next fiscal year.
The mayor admits there is a lack of confidence in city government. Many citizens who are against a tax increase are willing to spend extra money to create special benefits districts because they believe they are more likely to get what they pay for that way. Restoring that confidence requires a comprehensive plan to streamline government and make it more cost-effective for Baltimoreans of the future.
