City tax collections way up No more crisis: With revenue at record levels, doom and gloom predictions are suspect.

September 19, 1997

IT MAY BE September, but June is busting out all over. The city has counted the taxes collected for the last month of the past fiscal year and discovered several records were broken. Property tax collections for June reached $9.6 million, compared to $2.3 million for June 1996. Personal property tax revenue was $3.3 million, compared to $527,000 for June 1996. Penalties and interest reached $2.6 million, compared to $580,000 in June 1996.

But it doesn't stop there. Income tax revenue was $19.3 million, compared to $15.6 million in June 1996. Transfer tax revenue this past June was $2.2 million, compared to $1.1 million in June 1996. Recordation tax revenue was $2.3 million, compared to $1.4 million. Plus, Convention Center receipts, building inspection fees and landfill tipping fees all set new records for the month of June.

In all, the city collected nearly $17 million in revenue this past June that it never saw in June 1996. The question raised by the windfall, of course, is why didn't city budget officials predict it would happen. Baltimore was talking about closing recreation centers and library branches at the same time state economic forecasters were predicting much higher than normal tax collections. Couldn't the city's numbers crunchers see the same thing?

In July, Mayor Kurt L. Schmoke announced a modest increase in tax revenue had provided $3 million to reduce budget cuts to city-supported museums and the Recreation and Parks Department. News that revenues were actually much higher came out at Wednesday's Board of Estimates meeting when that panel agreed to spend more than $10 million to offset last year's deficits for the Baltimore City Public Schools and the Department of Public Works.

The mayor contends he took the right course in being skeptical of revenue projections that have now come true. He points out the city still had to use interest on pension fund investments to balance the budget. Baltimore's economic condition, though much improved, is not as healthy as it should be.

But some of the pain of the last budget process might have been avoided had Mr. Schmoke placed just a little more credence in state tax analysts' predictions when he offered his own projections. Maybe there wouldn't have been a court fight over the closing of a library branch.

Pub Date: 9/19/97

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