Baltimore residents can expect to see a bigger bite out of their paychecks beginning in January.
The City Council overwhelmingly approved last night a 20 percent income tax increase pushed by Mayor Martin O'Malley to help him pay for a beefed-up Police Department, avoid scores of layoffs and balance the city's budget.
Earlier in the day, City Council President Sheila Dixon held a closed-door council meeting on the O'Malley budget and the privatization of some city jobs - in possible violation of the Maryland Open Meetings Act.
The increase in the income tax rate, from 2.54 percent to 3.05 percent, goes to the mayor for his signature. It puts the city near the maximum rate allowed by state law; the city already has the highest property tax rate in the state, at $2.328 per $100 of assessed value.
For O'Malley, raising the income tax rate is an essential piece of his budget and key to his strategy for turning the city around.
The increase supplies $10.6 million in much-needed funds for the next fiscal year, which begins July 1, helping the city pay for a heavy investment in police. It also helps ensure that the city will continue twice-a-week trash collection and will not close 20 recreation centers and five community pools.
"This is what we need to do now to make this a more attractive city for many years to come," O'Malley said in an interview after last night's 15-4 council vote. "It's now incumbent upon this administration to deliver on our promise of making this city a much cleaner and safer place so that the people get a return on their dollar."
Under the tax increase, due to take effect Jan. 1, an average family of four with an adjusted gross income of $50,000 will pay an estimated $160 more a year.
O'Malley noted that a study by the District of Columbia government showed Baltimore had a far lower local tax burden for a family of four earning $25,000 a year than Washington, Philadelphia or New York City. He also said he hoped that in a few years, the city will be able to reduce its property tax rate.
The mayor had pushed expanding the city's 8 percent energy tax to include nonprofits in order to raise at least $4 million more next year. But he agreed Friday instead to accept voluntary payments totaling $20 million over four years from the city's hospitals and major colleges.
Both the voluntary payments and the tax increase will help the city avert some layoffs.
The mayor still plans to privatize the jobs of about 170 or more custodial workers and security guards, an issue that remains a sticking point with the council.
Council members met with senior O'Malley aides to discuss privatization in a 90-minute closed-door session at City Hall yesterday morning. Dixon initially said there would not be a majority of the 19 council members present - a quorum under the state open meetings law - allowing the session to be closed.
About 30 minutes into the meeting, as more council members entered, there was a quorum. At that point, Dixon gave a different rationale for closing the meeting, that the council members were discussing specific security guards by name, so the meeting could be closed for the "personnel" discussion.
The state law has an exception allowing private sessions under such circumstances. But in interviews after the meeting, several council members recounted a meeting that, while including some discussions of specific personnel, also included a broad, policy-oriented debate.
William R. Varga, an assistant attorney general familiar with the state's open meetings law, would not comment on yesterday's meeting but said that, in general, any meeting addressing a policy issue should be open. "It sounds pretty questionable," he said.
Dixon said in an interview last night that "90 percent" of the discussion was about specific city workers by name, disputing the accounts of some members.
Asked again about the matter, she replied, "Then you sue me, because the bottom line is you can't be in every meeting that we have when we need to discuss sensitive issues that don't need to be in the paper the next day, because sometimes the issues aren't reported accurately in the paper."
Afterward, a Dixon staffer said some council members are sensitive about discussing the privatization issue in front of the media because it involves potential layoffs of city workers, some of whom they know personally.
This was how several council members recounted the key points of the policy discussion of the meeting:
The mayor's aides presented a six-month transition plan for privatization, during which the affected employees would be given other city jobs or job training.
Some council members, including Dixon, objected, saying they wanted a full year before workers would lose their current jobs.
Dixon took a straw poll on the budget, with the dozen or so council members present split fairly evenly in three camps - in favor of the budget if there's a transition period of six months before privatization, in favor if there's a transition period of one year, and against the budget if there's any privatization.
Sixteen council members attended at least some of the meeting. It ended without a final resolution on the budget, which the council is expected to take up for consideration next week.
Dixon has barred reporters from council gatherings without a clear legal rationale at least one other time this year.
In February, the council held a closed meeting with Police Commissioner Edward T. Norris. Council members ended up rotating in and out of the meeting to keep the session legally closed once a staffer pointed out that they had enough members present to constitute a quorum.