O'Malley floats property tax hike

Mayor says job cuts might also be needed to balance budget

$10 million over this year

March 03, 2001|By Gady A. Epstein | Gady A. Epstein,SUN STAFF

After approving a significant raise for firefighters, Mayor Martin O'Malley said yesterday that the city might have to eliminate 600 jobs next year and possibly raise property taxes, which are already the highest in the state.

"We are either going to have to make some deep, deep cuts in jobs or find some other way to bring in revenue," O'Malley said. "It's going to be a very difficult year."

The settlement with the city's two firefighter unions -- a two-year agreement reached Thursday -- will cost an additional $3.2 million in the budget year that begins July 1. The pact, which must be ratified by the unions, would give firefighters parity with police officers next year, with smaller raises the year after.

FOR THE RECORD - Because of an editing error, an article in yesterday's editions incorrectly reported that Baltimore Mayor Martin O'Malley was considering a property tax increase. While O'Malley said he was weighing the possibility of a tax increase, he did not specify which tax.
The Sun regrets the error.

The agreement will make what was shaping up to be a tough financial year even tougher.

All city agencies, except for the revamped Police Department, have been asked to cut spending by a total of $20.8 million for next year's budget, and likely will have to come up with more cuts -- up to $21.7 million more, including money for firefighter salaries.

Worse, the city needs to cut spending by up to $10 million to balance this year's budget, as required by law, a shortfall due in part to a looming obligation to pay millions in overtime to police sergeants and lieutenants.

"If this were a business, I'd be looking for some gap financing because I've got a big gap," O'Malley said. "It's going to be a much tougher budget season than we had last year."

That apparently prompted the mayor to float the possibility yesterday of increasing the city property tax rate, which is $2.328 per $100 of assessed value, a figure that has been adjusted from $5.82 under a state law that changed how property taxes are calculated.

"It's a scary thing to think about a tax increase at a time when you are just starting a rebound," he said.

The mayor and his finance officials don't like to talk about specific cuts being planned, partly from fear of upsetting the constituencies that would be affected.

But it appears little will be spared when the administration delivers its budget recommendations to the city Board of Estimates by the end of this month: arts funding is on the chopping block; the library system may need to stop buying books or close branches; and the mayor has mused about privatizing minor city services.

It's unclear how extensive the cuts would have to be to balance next year's estimated $925 million general fund budget, though sometimes the bark ends up being worse than the bite. At this point, the gloomier the threat of deep cuts -- and especially layoffs -- the more political leverage the city wields in Annapolis and with labor unions.

O'Malley can make the case in the State House that the city needs every penny it can get, and he can make the case with labor unions that it's in their long-term interests to make concessions as they negotiate labor contracts for the next budget year.

"Whenever we're in negotiations we always hear about deficits," said Sheila Jordan, president of the City Union of Baltimore, which represents 5,000 employees. O'Malley's aides have made it clear they would like to win concessions from city unions on health benefits, one of the fastest-growing city expenses.

"Whenever the mayor mentions a deficit or he's questioned about a deficit, right behind that, he says we'll have to do some layoffs," Jordan said. "I really can't say whether that's the mayor posturing or if it's reality or what."

But nearly everyone is bracing for funding cuts, from giant city departments to smaller public institutions that many take for granted. The Enoch Pratt Free Library's board, for example, meets Wednesday to grapple with a 10 to 15 percent cut from its $13 million budget. The library system reduced hours last year, putting branches on one shift.

"There are a number of options, [closing branches] is one of them," said Judy Cooper, chief of public information for the library. "One of the things is whether we'd stop buying books for a year."

The Baltimore Museum of Art also faces a $750,000 cut in its $3 million of city funding.

"We're just trying to be more cost-conscious, or streamlined, in what we're doing for the next year, and focusing more on exhibitions that are ... exciting so that we get more attendance, and watching our pennies," said Anne Mannix, spokeswoman for the museum, which has an overall budget of roughly $11 million.

The Department of Public Works is grappling with cost overruns this year and has to cut spending by millions this year and next -- while meeting a key O'Malley goal of keeping the streets clean.

To enforce the strict belt-tightening regimen, city Finance Director Peggy J. Watson and her staff have repeatedly emphasized to agency heads that the city has no dollars to spare.

"I'm looking for soldiers. I'm not looking for anybody to tell me, `This is hard,'" said Watson.

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