Out of pocket

April 01, 2004

LITTLE-KNOWN, few-strings-attached municipal expense accounts die hard. Such is the legacy of the $5,000-a-year perk enjoyed by Baltimore City Council members that was summarily abolished yesterday.

It's a fitting end to the expense accounts that were initiated in 1968 in a stealth move to get around the legal and political implications of the council voting itself a pay raise.

The council expense accounts should have been revamped years ago. Largely unregulated, they amount to small change - totaling about $100,000 a year - in a city budget that tops $2 billion. But oversight was lacking. Now, rather than receive quarterly payments for nonoperational expenses, the 19 council members will join the ranks of city workers who must submit receipts for expenses to be reimbursed. That's how it should be.

Over the years, the council expense accounts increased from a $750 payment in 1968 to the $5,000 of today and went largely unnoticed. Until this week, when The Sun reported that federal investigators were examining the quarterly expense payments as part of an inquiry into council finances. What federal investigators will discover, if they haven't already, is that the expense account system suffered from lax standards and little oversight - and it's been that way since its inception nearly four decades ago.

Council members past and present treated the accounts differently. Some considered the money income and paid taxes on it. Others, taking their cue from city officials, understood that unspent money could be pocketed, but was taxable. Some kept receipts for the bull roast tickets, church events and other expenses. Others apparently did not.

With news of the federal investigation, questions have been raised about the legal and tax implications of the expense system. Those same issues concerned City Hall back in 1968. But the city fathers, including Council President William Donald Schaefer, budgeted the expense money in a way that they believed would spare members (who earned the grand sum of $6,500 a year) the chore of explaining how they spent the money or paying taxes on it, according to news accounts at the time. Worried about the public's reaction to the expense accounts in a lean budget year, city officials urged council members "to keep it quiet." It was two years before the existence of the accounts made headlines, in The Evening Sun.

Today, City Council members earn $48,000 a year. City funds finance their office operations. There's no reason why they can't recoup their out-of-pocket expenses by submitting receipts and canceled checks.

This is not a matter for the U.S. attorney in Maryland, determined as he may be to make a name for himself with political corruption convictions, but the City Council expense account system is nonetheless an out-of-date political perk that won't be missed.

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