Cash-strapped city needs fiscal strategy

Budget: Mayor misses an opportunity to bring municipal spending to manageable levels.

April 27, 2001

MAYOR Martin O'Malley had the right idea in December 1999, when he invited two business groups to suggest management reforms and cost-cutting measures for Baltimore's municipal government.

Unfortunately, he's avoided making the painful changes that are needed.

This year's budget process is a prime instance of missed opportunities.

Instead of addressing the alarming, long-term imbalance between the city's rising expenses and declining revenue, Mr. O'Malley wants quick fixes to cover the $21 million budget gap.

That includes a hefty raise in the local income tax and expanding the energy tax -- now paid only by businesses -- to such nonprofit groups as churches, schools and hospitals.

Although the mayor's budget won't officially go to the City Council until May 9, heavy lobbying is under way to line up a council majority of 10 votes.

Meanwhile, some council members are trying to garner votes for their own budget solutions, ranging from a tax on cellular phones and pagers to higher storage fees on impounded cars.

These are the kinds of moves that send the wrong message. They could accelerate the middle-class and upper-class exodus from the city.

In his preliminary budget last month, the mayor flashed the possibility of laying off 500-plus city workers. Yet politicians -- including Mr. O'Malley -- now are scrambling to avoid terminations.

Among the alternatives gaining support is a one-week or two-week furlough for the city's management and professional employees, along with elected officials.

There's no consistency or long-range strategy in these machinations. City Hall just stumbles from year to year, hoping to stave off disaster -- without seriously reducing government to reflect Baltimore's diminished population.

The unsettled prospects of the nation's economy call for particular prudence by Baltimore officials. Yet they prefer to look at the world through rose-colored glasses.

They seem to think high prices and bidding wars for waterfront luxury residences signal an expanding property-tax base.

But look at the facts: Recent reappraisals in North Baltimore's wealthy neighborhoods produced less revenue growth than had been anticipated.

This is a bad sign: The next set of reappraisals covers less-prosperous areas where abandonment is widespread and houses can't be sold at any price.

With state officials facing a potentially huge budget shortfall of their own next year, the city can't turn to Annapolis for more help. Federal support of many urban programs is expected to decrease in the conservative budgets of George W. Bush.

So it makes sense that the O'Malley administration should be drastically downsizing, pinpointing positions the city no longer needs or can afford.

The mayor should start at the top by scaling down his expensive system of four deputy mayors. He also should take the lead in trying to shrink Baltimore's 19-member City Council, the largest and most expensive local governing body in Maryland.

The council, too, must set an example. A 10 percent or 20 percent cut in its own budget is a necessity if larger cuts are to be made elsewhere in city government.

These would be symbolic moves. But unless the mayor and the council start addressing the fiscal dilemma in a systemic and hard-nosed way, Baltimore will be looking for more feeble, stopgap measures a year from now.

That's no way to run a city.

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