City woes evident in budget

O'Malley plan raises fears of higher taxes and slashed services

Layoffs seem likely

`There's going to be a lot of pain,' councilman says

March 29, 2001|By Gady A. Epstein | Gady A. Epstein,SUN STAFF

With the release of Mayor Martin O'Malley's bare-bones budget plan, City Council members, neighborhood activists and others said yesterday they worry about a future with fewer services and more taxes as the city struggles to stabilize its neighborhoods and attract new residents.

"There's going to be some tough decisions made. There's going to be a lot of pain," said Councilman Nicholas C. D'Adamo Jr., chairman of the council's budget committee.

"We'll ask citizens to stick with us until better days, when times will be better," he said.

It's unclear how far citizens or council members will go in backing O'Malley's preliminary budget proposal and tax increases.

Some council members are skeptical about one of the major tax proposals the mayor is considering.

And some neighborhood activists are opposed to both tax increases and reductions in services, indicating the mayor may have heavy lifting to do in crafting and pitching his final budget.

"We need the city backing us. It scares me they're going to cut back on employees and services," said Linda Bardo, president of the Community of Curtis Bay Association, who also doesn't want a tax increase.

"For those of us who stayed it's been a struggle. I don't like taxes raised at all for anybody."

O'Malley's preliminary $1.6 billion operating budget plan, which was to be formally presented to the Board of Estimates yesterday, calls for deep spending cuts that could lead to more than 500 layoffs, the majority of them in the Department of Public Works.

If the mayor's plan is adopted, a wide range of city services will be affected in the next fiscal year, which begins July 1. Five library branches are planned for closing, parks and recreation employees would be laid off, recycling services would be cut back, and museum funding would be cut.

"These next two years are going to be the toughest two years we're going to have to face," O'Malley said yesterday at the board meeting.

To offset many of the cuts, the mayor is considering raising the city's income tax and imposing a 4 percent energy tax on residents, nonprofits and manufacturers.

O'Malley also is looking elsewhere for dollars.

He traveled to Washington yesterday to meet with the members of the state's congressional delegation in his efforts to secure more federal funding.

The city might receive some money in a supplemental state budget, which the governor could issue as soon as today. Also, the mayor will seek concessions from city employees' labor unions.

A tax increase of some sort appears to be necessary to avoid hundreds of layoffs. Not surprisingly, most council members aren't leaping forward with proposals.

Doubts about tax

Some council members are already expressing opposition to - or at least serious doubts about - an energy tax on residents. Those members include D'Adamo, Council President Sheila Dixon and Councilman Keiffer J. Mitchell Jr., a West Baltimore Democrat and chairman of the council's taxation panel.

Some advocates for the poor are also against an energy tax.

"We can't balance the budget on the backs of people who are poor. It's a cliche, but it's true," said Mary Ellen Vanni, executive director of the Fuel Fund of Central Maryland, a nonprofit group that provides energy assistance to the poor.

"This is an inappropriate place to put a tax," she said.

Dixon and Mitchell said that if the council is to consider a higher income tax, it will ask that it be paired with a future reduction in the city's property tax rate, the state's highest.

"We've got to find a way to definitely bring in revenue, but we've got to make it equitable," Mitchell said.

Concessions hoped for

In addition to a possible tax increase, the O'Malley administration is hoping to find millions more in the budget by winning concessions on city employee benefits, including prescription drug costs that are expected to jump by nearly $8 million, or more than 15 percent, next year.

The City Union of Baltimore and the American Federation of State, County and Municipal Employees began meeting with city officials this week to negotiate a new contract to begin July 1.

CUB President Sheila Jordan said she doesn't doubt that the threat of layoffs will be used as leverage to gain concessions from the unions.

Even with labor concessions and a tax increase, the city could face layoffs and the privatization of some services.

`Ripple effect'

"Our members sound pretty upset, and they have reason to be," Jordan said.

"We want to make sure no one loses their jobs, because it has a ripple effect right down to the neighborhoods we live in."

Residents could face higher taxes, fewer services or both, in part because the city has yet to see the kinds of revenue gains the suburbs have reported for years.

O'Malley notes that the city is also paying the price for his investment of millions of dollars in fighting crime, an issue he has made his top priority.

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