Raising Baltimore taxes is not good for the city

May 30, 2001|By Joan M. Pratt

WITH BALTIMORE'S declining population and middle class exodus, we who are entrusted with running the city must rise to the challenges facing us.

There is no disagreement that Baltimore's revenue is not keeping pace with its obligations. But there is disagreement about how to address Baltimore's budget deficit. Not all elected officials concur with taxation as the only means to generate revenue.

The city's financial affairs are decided by the Board of Estimates. The board consists of the mayor, two mayoral appointees, the president of the City Council and the comptroller. Of course, the deck is stacked in favor of the mayor because he automatically controls three of five votes. Because the board formulates and executes the city's fiscal policy, independence in exercising this responsibility is crucial.

One would expect independence and due diligence of board members to result in differences of opinion when the consequences of a proposed action are questionable. This does not happen. When the best interest of the city is at stake, too often there is only one voice in opposition -- mine. Council President Sheila Dixon does not vote independently of the mayor; it is as though she is waiting to inhale whenever the mayor exhales.

Over my objection, the city gave the Cordish Co. a 99-year lease on the Power Plant with virtually no rent increases. The board also agreed to the same company's 16 percent preferred return on profit on the Brokerage before the city can receive a dime.

Sylvan Learning Systems, Inc. received a $1 million loan despite its more than $400 million in assets. Also, the city has sold several properties below fair market value. These are not good business practices.

The board soon will be asked to renew a lease with the Ravens for their training facility. In the past, the Ravens have paid $1 a year for this privilege. I calculate that if the NFL team paid market rate for this facility, the city would receive about $300,000 a year. There are suggestions that the city should not increase the rental fee to fair market value. Where is the independent voice of Ms. Dixon on these critical issues?

Today, the challenge before the city is to find a budget solution that considers our changing tax base and allows the city to maintain adequate staffing to provide quality services. The mayor's proposed budget addresses this challenge by increasing income taxes, eliminating jobs and levying an energy tax on non-profit organizations.

The budget is not something that we can vote "yes" on without thinking. Baltimore already has the dubious distinction of having Maryland's highest real estate tax rate; the cost of living would become even more oppressive by increasing other taxes. I support Baltimore becoming "America's Greatest City," not "America's Greatest Taxed City."

It is equity and fair dealing that will help Baltimore become "America's Greatest City." I agree that part of the strategy must be to keep and attract businesses to Baltimore. But businesses should not receive handouts while the income taxes for citizens are raised and nonprofits are taxed.

In my objection to the proposed budget for fiscal year 2002, I stated my concerns and offered an amnesty on interest and penalties on outstanding taxes and liens receivable. I also suggested a mandatory furlough to ease the heavy weight of increased taxation of citizens and the energy tax on nonprofits and churches.

Ms. Dixon said these measures were too late. She did not offer independent views on the budget dialogue. It is never too late to consider reasonable options that will avoid increased taxation. The state generated significant revenue from an amnesty program. Shouldn't Baltimore be willing to consider an amnesty?

As elected officials we must show effective leadership, creativity and use of good business practices in discharging our duties on behalf of the city. Fiscally, times for the city are likely to get worse before they get better. Our integrity, courage and commitment will continue to be put to the test. We can get things right in City Hall by exercising due diligence and independence in decision-making.

After all, isn't that why we were elected?

Joan M. Pratt is the comptroller of Baltimore City.

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