Don't spend it all

March 03, 2006

How quickly they forget.

It was only three years ago that Baltimore finance officials struggled to craft a balanced budget in the face of shrinking revenues and rising costs. The advice then was: Live within your means. Today, with Baltimore posting its second consecutive budget surplus, and a hefty one at that, the urge to spend, spend, spend should be resisted.

The robust housing market that has driven the city's projected $60.6 million surplus is showing signs of a slowdown. And Baltimore, like the state, should be saving to cover the health care costs of its future retired employees, an expense that could soar in coming years.

Folks who are counting the ways to spend the excess cash should reconsider. A chunk of the surplus is already spoken for: Mayor Martin O'Malley and other city leaders have pledged $25 million to upgrade aging schools and build new ones. If Mr. O'Malley and other city officials follow through on their plan to cut the city's property tax rate 10 cents over five years, a 2-cent reduction this year would consume $5 million of the surplus.

That would leave about $30 million to cover other city needs, and there are plenty. The administration's emphasis on public safety has run up overtime bills for police and firefighters. City parks have overdue maintenance needs of about $138 million. Advocacy groups would like to use some of the money to finance after-school and summer jobs programs for youths and projects to prepare kids for school.

Though Mr. O'Malley hopes to be in the State House next year, he should exert his influence to ensure that City Hall saves while it has money to save. In his comments Wednesday, the mayor acknowledged the potential liability facing the city for city retirees' future health care needs - a figure that could be twice Baltimore's annual cost of $80 million. That's a sizable piece of change.

At the same time, the public deserves some relief because it has helped finance the surplus through increased real estate fees and cell phone taxes that the administration pushed. In spending a portion of the surplus, city leaders should look toward enhancing investments they have made in programs such as Operation Safe Kids, which monitors and mentors at-risk teens.

But the bottom line is that the city can't afford not to save money that it very well may need tomorrow.

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