Baltimore budget analysts eye $20 million surplus in revenue

November 21, 1997|By Robert Guy Matthews | Robert Guy Matthews,SUN STAFF

The booming national economy and a rebounding local real estate market are expected to significantly increase Baltimore's tax collections and present an uncharacteristically rosy financial picture for the city this year, the chief budget analyst said yesterday.

But some of the predicted $20 million surplus in revenue is being offset by overspending in several city departments.

The Finance Department has ordered the Public Works, Recreation and Parks and Police departments to draft plans to curtail their spending.

By studying the first quarter of the budget year, which began July 1, city financial analysts are projecting considerably higher-than-expected income from property taxes, real estate transfers and recording fees. Parking tax and income tax revenues are projected to be slightly higher than was anticipated.

The projected $20 million surplus in revenues would represent an increase of almost 2.5 percent in the city's $823 million general fund. The general fund is the city's principal operating fund and makes up about a third of the $2.3 billion budget.

"The city is going to have a good year," said Edward J. Gallagher, Baltimore's chief budget analyst.

But later yesterday he tempered his upbeat prediction to the council's Budget and Appropriations Committee, which met to get financial updates from city agencies. The financial outlook "could change under different circumstances," Gallagher told the budget committee.

Last year, the city went through a wrenching budget process that pitted most of the council against Mayor Kurt L. Schmoke in an effort to balance the spending plan. The results were budget cuts for several departments and no new taxes, which had been pushed by the mayor.

After the budget was hammered out in June, city budget analysts said June income from property taxes and real estate transfer fees came in above projections. They reported that the city had a surplus of about $15 million.

That money was not used to restore cuts to such departments as Recreation and Parks, whose funding took a big hit in the budget fight. Instead, the surplus was used to bolster emergency reserves.

Budget committee Chairman Nicholas C. D'Adamo said he will hold quarterly budget hearings to avoid end-of-the-year surprises.

City financial analysts are predicting three possibilities for fiscal 1998, which ends June 30.

The most likely outcome, they say, is that the city would end the year with a $20 million surplus. The rosiest possibility is a continuing boom in the economy that would yield a $30 million surplus, and the leanest outcome would be a $10 million surplus.

Pub Date: 11/21/97

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