City OKs tax cut, funds for police, fire

Budget takes property levy rate to lowest level in three decades

Spending increases for youth programs

June 14, 2005|By Doug Donovan | Doug Donovan,SUN STAFF

The Baltimore City Council unanimously approved Mayor Martin O'Malley's $2.32 billion budget last night for the fiscal year that begins July 1, a plan that boosts public safety spending and reduces the city's property tax rate to its lowest level in three decades.

O'Malley's fiscal 2006 budget represents a 6.5 percent increase over current spending, and includes raises for city government workers and more funding for the Police Department and the state's attorney's office.

Youth advocates cheered as the three-month process ended with the council's approval of O'Malley's plan to spend much of the closing fiscal year's surplus on programs for children.

O'Malley said city residents are now reaping the benefits of a Baltimore "comeback" made possible in part by his administration's focus since 1999 on investing in public safety, reducing the size of city government and controlling spending.

He pointed to his budget four years ago in which he wrote: "[Public safety] is an investment ... that will save lives, and an investment that will be repaid in better, safer times that will come soon, when a growing, rebounding revenue base allows us to get it back to residents in yearly and steady property tax reductions."

That time came yesterday, according to the mayor and City Council members.

"Our city is showing the rest of the nation that we are moving forward," O'Malley said yesterday. "Not for the next election, for the next generation."

Council President Sheila Dixon praised the mayor and his budget officials for devising a spending plan last year that imposed new and increased taxes, making a 2-cent reduction in the property tax rate this year possible. The rate will now be $2.308 per $100 of assessed value -- a reduction that would save $30 for the owner of a home assessed at $150,000 and cost the city about $5 million a year in revenues. O'Malley has said he hopes to continue cutting the tax rate by the same amount for the next four years.

Dixon chastised critics, including some council members, who accused O'Malley of playing politics when his administration predicted last year a $45 million deficit for fiscal 2005. The fiscal year ending June 30 is expected to see a $59 million surplus, a cushion that critics say makes the mayor's property tax reduction possible while he makes an expected run for governor.

"I would eat their ties if there was money hidden," Dixon said after the Board of Estimates approved the council's action. She was referring to Councilmen Keiffer J. Mitchell Jr. and Kenneth N. Harris Sr., who have both raised questions about the surplus.

O'Malley and council members completed a process yesterday that steered $20 million of the city's surplus toward agencies that exceeded their budgets -- mostly the fire and police departments.

An additional $32.4 million went to various one-time costs, the majority being after-school programs and other youth-oriented organizations. The remainder, between $5 million and $7 million, will go into the city's reserves, said budget chief Raymond S. Wacks.

"This is a budget that puts our children first," said Council Vice President Stephanie C. Rawlings Blake. The surplus was partially due to a real estate boom last year unanticipated by budget officials, and also because the council approved O'Malley's package of new and increased taxes on cell phones, energy and real estate transfers. A year ago, administration officials had warned the taxes were needed to avoid layoffs and reduced services.

Those rising home values and the new taxes are largely the reasons why locally generated taxes are increasing by $67 million in fiscal 2006. The entire increase in the city's $1.1 billion operating budget is $70.9 million.

The Police Department will see its budget increase by 8 percent to $273.9 million, a boost that includes pay raises.

The recent deal between O'Malley and Baltimore State's Attorney Patricia C. Jessamy to give her office additional funds is not included in her $22.3 million budget but will be funded later in fiscal 2006.

Baltimore schools will receive $204.1 million, an increase of about $165,000. The money was technically approved yesterday. Some council members refused to certify it, saying school officials have been unresponsive to questions about school funding.

Highlights of Baltimore's $2.32 billion budget

Reduces the property tax rate 2 cents per $100 of assessed value.

Increases spending by 6.5 percent.

Provides $25.6 million in raises to city workers.

Boosts the Police Department budget by 8 percent.

Source: Baltimore City Department of Finance budget documents

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