Mayor's risky tax tactic Worst-case scenario: Schmoke gambles public will prefer new levy to fewer services.

April 17, 1997

BALTIMORE'S dire fiscal situation is real. The city has lost 60,000 residents in the last seven years -- 14,000 in 1996 alone -- and too many of them were middle-income taxpayers whose departure has left the city a revenue beggar.

Mayor Kurt L. Schmoke last year threatened a severe cut in services unless the city's piggyback income tax was raised to offset an $8 million shortfall in the general fund budget. The tax hike was avoided largely through an early-retirement program that shrank the city work force. But now the mayor predicts a whopping $18 million budget shortage for next fiscal year.

Again, Mr. Schmoke says higher taxes are the answer. He couldn't get the politically timid City Council to increase the piggyback income tax last year. It was Council President Lawrence A. Bell's idea to offer incentives instead to 1,000 city workers to retire early. But now the mayor wants the council to expand the city tax on gas and electricity. Commercial properties currently pay an 8 percent levy. Mr. Schmoke wants ** to collect a smaller percentage from other businesses and residences.

Like last year, the mayor hopes to convince people that Draconian cuts would occur without a tax increase. He revealed a proposal to reduce parks and recreation's $26.8 million budget by a third, guaranteeing the shutdown of rec centers, then withdrew the idea amid expected criticism. Those protests, however, don't mean the public is ready to accept a tax hike.

The mayor made that miscalculation last year with his proposed income tax increase. In rebuffing him, the City Council simply reflected public opinion that Mr. Schmoke shouldn't put his hand out for more money until he does a better job of managing the money he already has. Even some of the most vehement supporters of programs threatened under the mayor's worst-case scenario believe the city can live within its means.

Baltimore's population is down to 675,000 and continues to drop. In his nine years as mayor, Mr. Schmoke has cut the number of municipal employees from about 30,000 to 25,000. That's still too many. Three cities with populations exceeding 1 million -- Detroit, Dallas and San Diego -- all have 18,000 or fewer workers.

Mr. Schmoke is not doing taxpayers a favor by trying to avoid the pain and controversy that would come with bringing Baltimore's work force down to an appropriate size. Only after a true downsizing should city residents be subjected to higher taxes.

Pub Date: 4/17/97

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