Mayor's budget calls for layoffs

In preliminary plan, O'Malley pits taxes against 500 job cuts

`I know it's ugly'

March 28, 2001|By Gady A. Epstein | Gady A. Epstein,SUN STAFF

Mayor Martin O'Malley's preliminary budget for next year calls for deep spending cuts and potentially more than 500 layoffs, though the mayor said he is still considering tax increases that could significantly soften the blow of what he called yesterday the "toughest budget" he's seen in a decade of public office.

"It's an ugly budget. I know it's ugly," a subdued O'Malley told City Council President Sheila Dixon, Comptroller Joan M. Pratt and other top city officials at a budget briefing yesterday. "We're not at a point where we're cutting fat. We're looking at essential things."

The proposed $1.6 billion operating budget - described by officials as a "worst-case scenario" - is projected to be 4.2 percent larger than this year's, but because of the mayor's decision to invest millions in fighting crime, nearly every city department besides the police is having to make cuts totaling tens of millions of dollars.

FOR THE RECORD - An article on Page 1A yesterday about Baltimore Mayor Martin O'Malley's budget proposal misidentified the agency within the Department of Public Works that could lose as many as 300 workers to layoffs. The Bureau of Solid Waste and Bureau of General Services would bear the brunt of layoffs, not the Bureau of Transportation. The Sun regrets the error.

The hardest-hit would be the Department of Public Works, which may have to lay off more than 300 workers, mostly in the Bureau of Transportation, due to recommended general fund cuts of $13.8 million. By contrast, the Police Department is slated for an increase of $15.7 million, two-thirds of which is to pay for an 8 percent salary increase O'Malley agreed to last year.

"Obviously, the challenge that we face in years ahead is paying for these investments in quality of life," O'Malley said yesterday, reasserting his belief that reducing crime now will pay off in increased revenues in future years. "The good news is we are heading in the right direction."

But the city could raise taxes to avoid laying off workers, and the O'Malley administration's gloom-and-doom budget figures - to be formally presented to the Board of Estimates this morning - could build political support to do just that.

The threat of layoffs also might give O'Malley leverage in contract negotiations with the city's labor unions.

The administration wants concessions on health benefits that could save the city millions of dollars.

O'Malley said yesterday he is still looking at two tax options: increasing the income tax, which would generate $10 million, and imposing a 4 percent tax on energy bills for residents, nonprofits and manufacturers, which would raise as much as $22 million.

The energy tax alone could eliminate, or at least almost eliminate, the need for layoffs.

The mayor has promised he would never raise the city's property tax rate, which is now $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.

"No one wants to see a tax increase. We already have the highest property tax" in the state, said Dixon, the council president.

Dixon worried that an energy tax, for instance, would hurt consumers who already are paying higher energy bills, but she said she is open to suggestions on taxes. "I just think that we have got to look at some other revenue enhancements," she said. "But I think they've got to come from the administration."

Without a tax increase, the potential layoffs would affect nearly every area of city government, from the mayor's office on down.

The Department of Recreation and Parks would lose up to 70 workers; the Department of Housing and Community Development would lose up to 42 workers, in addition to 23 positions it is already planning to eliminate; the Department of Finance could lose dozens of workers; and the mayor's office - which had expanded in O'Malley's first year - would lose up to 16 positions.

The departments haven't figured out exactly how they would accommodate these cuts, since they were told only in recent weeks to come up with $21 million in reductions - the equivalent of 530 jobs - on top of nearly $20 million in cuts they'd already planned for next year.

The following are some of the cuts the departments have already recommended for next fiscal year, which begins July 1:

The Enoch Pratt Free Library plans to close five branches and cut back on buying books and materials by $112,000.

The Department of Public Works plans to eliminate the curbside collection of so-called blue bags of recyclable bottles, cans and other glass, plastic and metal products.

The Health Department plans to stop responding to oil, water and sewage spills and complaints of contaminated facilities, leaving that service to the state's Department of the Environment. The department also plans to privatize its hearing- and vision-testing program, eliminating nine city jobs - though it's unclear how many are now filled.

The budget plan does find room for some new initiatives, including:

$3.5 million to provide grants for one-time-only projects that "address the mayor's citywide core priorities," according to budget officials. Those priorities are not specified in the budget document.

$1.5 million - $1 million of it in the capital budget - to create a One Call Center and Customer Service Request System. That system would provide a coordinated center for handling citizen requests for services and information, officials said.

$595,000 for a new mayor's Office of Neighborhoods, which is envisioned as a one-stop trouble-shooting agency for community organizations. A new director has already been hired for the office, which would have six neighborhood liaisons, each responsible for a geographic area of the city.

City departments will present their budget plans, including recommended lay-off totals, to the Board of Estimates in a series of hearings scheduled from April 4 through April 12, followed by a "Taxpayers Night" public hearing on April 17.

The Board of Estimates will make changes to the budget as necessary and submit it in May to the City Council.

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