June 06, 2004
FACED WITH the prospect of paying more in taxes to use cell phones, consume energy and buy property in town, Baltimoreans have every right to ask if the city is doing more with less. They have every reason to press Mayor Martin O'Malley for evidence that he has economized; after all, city residents are hit with the highest property tax rate in Maryland.
But as the debate over Mr. O'Malley's $45 million tax package proceeds, tax-averse city residents also must ask themselves what they are willing to do without. Twice-a-week trash pickup, more police on the street, after-school programs? There is a choice here.
The row over Mr. O'Malley's plan to plug a $40 million hole in the city's $2.1 billion budget is understandable. The increases will inevitably hit some residents harder than others. The steeper closing costs resulting from nearly doubling the city's recordation tax could deter those with limited cash from buying their first homes. One manufacturer has talked about layoffs because of the energy tax. And the Greater Baltimore Committee, the city's powerful business group, has criticized the tax package as "counterproductive."
The GBC argues that the city hasn't implemented enough of the reforms it recommended when the mayor took office. But let's look at the mayor's record: He hasn't shied away from closing firehouses, privatizing city services or wrestling down overtime. Government accountability is as high a priority for Mr. O'Malley as crime reduction. He has relied on a high-tech mapping system - managed by the author of the GBC report - to force efficiencies in government performance and improve service delivery. The CitiStat program has helped the city tow more abandoned cars, collect more insurance payments and issue more inspection citations than before the city implemented the system. All of this has generated about $14 million more in revenue since Mr. O'Malley took office in 2000.
The very fact that the mayor's tax package will keep government running at its current level underscores the need for it. Part of the disconnect here is that no one really believes City Hall has cut all that it can. But the decline in Baltimore's population has forced the city to scale back. The economic downturn demanded further cuts as revenues flattened. And even though lower interest rates jump-started Baltimore's housing market, the poverty here is real and the city's obligations because of it are onerous.
City Council members now are weighing the impact of the mayor's tax package on the city's well-being. Higher taxes certainly could dissuade people from investing here, but any more so than the crime rate?
And what of housing costs? The mayor's proposed recordation tax would be more palatable if it were progressive, exempting, say, the first $100,000 of a home purchase from the levy.
To safeguard jobs, the city could retain the exemption on the energy tax for manufacturers. But city residents would have to do without some services until the development projects in town and new homeowners expand the city's tax base. The choice is theirs; they should speak out.
