With the economy sagging and state cuts likely, Mayor Martin O'Malley's administration will propose today a lean budget for the year starting July 1 that won't raise taxes but may require the elimination of 71 jobs through retirements, transfers or layoffs.
The recommended $2.1 billion budget for fiscal 2004 would be 2.6 percent larger than the current year's budget, according to a briefing that acting budget Director Edward J. Gallagher gave to the mayor's Cabinet yesterday.
FOR THE RECORD - A headline in yesterday's editions of The Sun erroneously indicated that real estate taxes would rise in Baltimore. While the city expects an increase in real estate tax revenue because houses are selling for higher prices, the real estate tax rate will remain unchanged. The Sun regrets the error.
"Our revenue growth is extremely flat," said Gallagher. "Everyone is feeling the pinch."
The proposed budget plan is to be presented to the Board of Estimates this morning, with a public hearing scheduled for April 3 at the War Memorial Building on Fayette Street near City Hall. The City Council will then debate the proposal, with more hearings and a vote in June.
"This is a very preliminary budget," said O'Malley. "There are still big variables out there, depending on state revenue and how [union] negotiations go. And it's made all the more preliminary by the pending invasion of Iraq and what that could mean for us" for homeland defense.
Peggy Watson, the director of finance, said the year's budget is no different from those in many recent years, with rising expenses not keeping up with the city's shrinking revenue base.
Real estate tax collections are expected to rise next year, with the city's homes continuing to sell for higher prices.
But business property tax income will likely fall, because the recession has made corporations reluctant to invest in new machinery.
City Council President Sheila Dixon said it is too early to tell if the proposed budget would require any layoffs, or if the staff reductions can be achieved through other means. "As we move through this process, I get a sense that there are a number of people eligible for retirement who might do that," she said. "But I don't want to see forced retirements used as a way to get rid of people."
Among the mayor's recommendations are:
a 9 percent increase in funding for the Mayor's Office of Information Technology, to $8.5 million, which includes more money for technical staff for a tax analysis system.
an 8 percent increase for the Baltimore Development Corp., to $2.7 million, largely to help finance the "main streets" revitalization project, which seeks to rejuvenate commercial areas in city neighborhoods.
a 1.3 percent increase in funding for the Police Department, to $246 million. But 73 civilian jobs would be abolished, in part through voluntary retirements or layoffs.
about constant funding for schools, parks, health and the public libraries.
a 0.9 percent decrease in funding for the state's attorney's office, to $17 million, which would include the abolishment of three support positions.
a 5.6 percent decrease in funding for the Department of Public Works, to $46.7 million, which would include the privatization of a refuse transfer station and the elimination of five supervisor positions, two building maintenance jobs, five garbage collection jobs and six recycling positions.
a 25 percent decrease in city funding for the Department of Housing and Community Development, to $6.5 million, which would require the elimination of four vacant positions.