Budget plan would avert tax increase Schmoke, Bell reach tentative accord in several meetings

Rainy-day fund could be used

But council efforts to restore cuts leave picture unclear

June 02, 1996|By Robert Guy Matthews | Robert Guy Matthews,SUN STAFF

After a series of quiet meetings, the mayor and the City Council president tentatively have hammered out a plan that calls for no new taxes to cover Baltimore's expected $4.9 million budget shortfall.

But a new tax for city residents remains a possibility. The council's budget committee and President Lawrence A. Bell III are looking to restore some cuts that the mayor wants, specifically in funding for the Department of Recreation and Parks.

Bell is keeping details of the tentative plan under wraps until he has talked to all 18 council members. He briefed several members Friday.

Mayor Kurt L. Schmoke is out of town and had no immediate comment.

Sources said Schmoke and Bell agreed to take $3.2 million that the mayor's preliminary budget allocated to the city's rainy-day fund and use it to cover most of the expected shortfall. Bell said the plan includes other reductions in increases in the mayor's budget.

The plan likely will be presented at a special council meeting Thursday. The council will meet tomorrow on nonbudget business.

The rainy-day fund -- a surplus reserved for emergencies -- was set to get $4.8 million in the next fiscal year. Most of the $4.8 million resulted from a police and fire retirement fund surplus. Because of the surplus, the city won't have to contribute as much to the retirement fund as expected.

But the Bell-Schmoke tentative agreement would reduce this year's rainy-day fund appropriation to $1.6 million, still the largest allotment to the fund in four years. The remainder -- $3.2 million -- would go to cover the expected shortfall. That would leave $7.1 million in the fund.

Though not specifically mentioning the plan, Schmoke said last week that he and Bell were working together so that there would be no "surprises" when the council submits the budget to the mayor on June 10.

The mayor was reluctantly accepting the plan, Bell said Friday. "He said, 'I'm not going to veto it,' " Bell said, referring to his conversation with Schmoke.

The two men have had several meetings about the budget. The most recent was Thursday.

At issue were a number of tax proposals. The mayor has said one of them is needed to balance the budget.

Schmoke lobbied community groups and council members to pass a 10 percent income tax increase. But the piggyback tax proposal was met with a lukewarm-to-hostile reaction. That increase is effectively dead, according to council members.

The mayor was all but forced to come up with other options, which included an energy tax on nonprofit groups and a parking tax. He even offered to scale back the proposed piggyback tax increase from 10 percent to 5 percent.

Council members came up with tax proposals, including reviving the beverage container tax. That idea was voted down by the Taxation and Finance Committee.

City residents may end up with some kind of tax to pay for next year's spending when the council submits the budget.

Budget and Appropriations Committee Chairwoman Joan Carter Conway, with Bell, wants to restore some of the mayor's cuts. The mayor's preliminary budget would cut the parks department and the Baltimore Museum of Art.

The council is only permitted to reduce the budget. Other action requires the mayor's approval.

"The final push is for [the mayor and the council] to work together to restore priority areas," Bell said.

The city's $2.3 billion budget is expected to go into effect July 1.

Pub Date: 6/02/96

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