O'Malley says Ehrlich's cuts may force city to raise taxes

Mayor backs other fees to aid municipalities

February 06, 2004|By David Nitkin | David Nitkin,SUN STAFF

Baltimore Mayor Martin O'Malley said yesterday that he could be forced to raise city income or property taxes if cuts to local governments contained in Gov. Robert L. Ehrlich Jr.'s proposed budget are not reversed.

The mayor also said he supported proposals the General Assembly will consider that would increase car-rental fees and add a surcharge to restaurant bills, with proceeds going to Baltimore and other municipalities suffering from reductions in state aid.

O'Malley joined other Maryland mayors in Annapolis to criticize Ehrlich's proposed $23.8 billion budget, which includes no increase in state taxes but cuts highway funds and other grants that municipal leaders say they need to provide services.

"Shifting costs and shifting responsibilities is not the way the people want their business to be done," O'Malley said.

Several mayors said they reluctantly raised property and other taxes last year after an initial round of state cuts to local governments. "The mayors who didn't raise taxes [last year] are probably going to wind up doing it [this year]," said Havre de Grace Mayor David Craig, a Republican who said taxes in his city went up last year for the first time in 18 years - which was also the last time he was mayor.

The mayors who did not increase taxes last year included O'Malley, who raised property taxes just once in the past five years, during his second year in office.

Asked if city taxes would rise next year, O'Malley said "we have to wait" until the state passes its budget. "I don't know whether [city] taxes will go up or not."

O'Malley noted that city property tax rates are about twice as high as those in surrounding counties, and that the city's relatively low median income makes raising income taxes unpalatable.

"I'm not sure exactly where we go," he said.

Baltimore stands to lose $15 million in road money in Ehrlich's budget, as well as millions more in grants to combat violent crime and provide recreation programs.

Shareese N. DeLeaver, an Ehrlich spokeswoman, said the governor's budget was responsible and dealt with the fiscal realities presented by an inherited shortfall of more than $1 billion.

"It's not passing the buck," she said. "This is not the governor's mess, but he was the person elected to clean it up."

O'Malley and other mayors say they want Ehrlich and lawmakers to consider new revenues, including slot machines and a sales tax increase, to help provide new money that could prevent the cuts.

As a fallback, the mayors are backing more limited proposals. They are supporting bills that would add a $5 surcharge to car-rental fees, with the proceeds split between cities and counties - a measure that could raise about $9 million a year. They also want local governments to have the option of including an additional charge of up to 1 percent on restaurant bills in their jurisdictions.

O'Malley said he supported the restaurant bill option, but would not say whether he would back implementing it in Baltimore.

Mayors are also critical of Ehrlich's proposed $2.50-per-household charge to pay for sewage treatment plant upgrades that would assist in Chesapeake Bay cleanup.

Local officials say that many residents will be paying the fee, but will never see improvements. Ehrlich proposes using the money to make repairs to 66 of the state's largest sewage plants. But in 44 cities - including Ocean City, Port Deposit, Preston and Ridgely - residents would pay but never get a benefit.

"What we are looking for is equity," said Salisbury Mayor Barrie Tilghman.

Baltimore is the largest of the state's 157 municipalities, which are home to about 30 percent of Maryland's residents.

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