City budget cuts urged Mayor's hiring freeze raises fiscal issues

'Just the first step'

Spending reductions needed, critics argue

October 23, 1998|By Ivan Penn and Gerard Shields | Ivan Penn and Gerard Shields,SUN STAFF

While Mayor Kurt L. Schmoke looks to trim 250 Baltimore City government jobs over the next year to help offset a projected $24.4 million budget deficit, critics complain that the city should focus instead on cutting spending.

No layoffs are planned, but Schmoke said he does not intend to fill positions that become vacant during the remainder of the fiscal year, which ends June 30. That would save the city about $5 million, he said.

"This is just the first step," Schmoke said. "This doesn't solve the problem, it's just a step toward solving the problem."

Schmoke imposed a hiring freeze Wednesday and restricted travel and equipment purchases. The concern is that the city's revenue for fiscal year 2000, which begins July 1, 1999, will not cover the expected increase in expenses, such as a 3 percent to 4 percent pay raise for government workers.

But some City Council members criticized the mayor for the hiring freeze, suggesting that the administration has done little to curtail city spending. Nine administration bills are before the council's Budget Committee seeking additional spending above budgeted amounts for this year. Last year, the city spent $3 million more than budgeted.

"It's like putting a Band-Aid on a metastasized tumor," Northwest Baltimore Councilwoman Rochelle "Rikki" Spector said of the hiring freeze. "It's not good medicine."

William Brown, city finance director, said the budget for this year is on solid footing. Brown said the city is looking forward so officials won't be surprised next year.

"This year, hopefully, everything will be fine," Brown said. "In looking forward, our revenue projections don't look very optimistic."

Gov. Parris N. Glendening has promised that the state will take over the court system, which would save the city about $9 million, Brown said. He said the administration is seeking other ways to cover the anticipated $24.4 million deficit.

The mayor is seeking ways to stem the decline in city revenue that has resulted from a steady exodus of residents and businesses. The city loses an estimated 1,000 people a month -- the loss of 69,000 people in the past 10 years has reduced the population to 670,000 -- eroding Baltimore's tax base.

Douglas Munro, president of Calvert Institute of Policy Research, complains that while other cities have taken steps to reduce spending, Baltimore has relied on increasing federal and state aid.

In Indianapolis, the city privatized services, while Philadelphia officials restructured union contracts, he said.

"Baltimore really is the last major, major city in this country to do absolutely nothing to streamline city services," Munro said.

The federal and state governments pay about 40 percent of the city's $1.8 billion budget.

"It's allowed Baltimore to put off the inevitable," Munro said. "It's allowed us not to face the music."

Schmoke said yesterday that he is considering such measures as privatizing government services. But so far, he is leaning on government downsizing to help and has a key backer in his position.

"I support the mayor in the freeze," said City Council President Lawrence A. Bell III. "However, I do believe that we need to look at some other long-term solutions."

Bell is recommending that the mayor consider offering early retirement packages that would reduce the government's size and save tax dollars.

Schmoke has cut 3,355 jobs over the past decade through attrition and buyout programs, leaving the city with 26,055 employees.

But measures other than job cuts will likely be necessary. The mayor is protecting public safety jobs such as police and fire, and he cannot by law cut school funding. That guarantees that 15,000 jobs won't be affected by any downsizing actions.

Pub Date: 10/23/98

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