Mayor to tell surplus plans

Students due half of $61 million

April 11, 2006|By JOHN FRITZE | JOHN FRITZE,SUN REPORTER

Mayor Martin O'Malley will unveil a plan today to spend the city's $61 million budget surplus on education programs and neighborhood development - initiatives that City Hall officials said will encourage Baltimore's growth.

From $5 million for after-school programs to a previously announced $25 million allocation for school construction and renovation, more than half of the surplus - generated largely by city real-estate taxes - will be spent on city school students.

"For the second year in a row we're able to take funds generated by the city's strong housing market and put it back into programs that directly impact Baltimore's children and our neighborhoods," said O'Malley spokeswoman Raquel Guillory.

Though the money represents a small fraction of the city's $2.3 billion budget, the announcement last month that the city would run a surplus for a second straight year set off a maelstrom of debate and lobbying over how the money would best be used.

Baltimore's recent budget surpluses, which come after years of struggling to make ends meet, are mainly credited to the real-estate market, which has driven up the amount of money the city collects in property taxes and recordation fees, which are charged when homes are sold.

O'Malley, who is seeking the Democratic nomination for governor this year, has said the surplus symbolizes the city's efforts to turn itself around financially.

In addition to the money earmarked for schools, the administration has proposed spending $1.25 million more on books for the city's library system, $3 million on demolition for East Baltimore development projects and $3 million to expand the city's network of police cameras.

The spending must be approved by the city's Board of Estimates and the City Council.

From the moment the city announced the surplus early last month, members of the City Council and community groups began actively lobbying for a portion of the funds. Because the surplus is a one-time infusion of money, budget officials tried to steer away from using the cash for perennial costs.

Baltimore's Safe and Sound Campaign, a nonprofit group that advocates for school programs, launched an aggressive push to bring attention to its efforts and its need for more money. The group met with City Council members and attended an endless stream of public meetings.

Though the group was not able to secure the $40 million it had hoped to direct toward its programs, it was able to lock up about $7 million for after-school and summer-job initiatives. Those programs are run mainly by community organizations.

"Not only do these programs work, a lot of them save dollars and bring in new dollars," said Erin Coleman, an after-school strategist with Safe and Sound. "A city's budget is a reflection of the priorities of the city. When you don't put money in for kids, that means you don't value them."

Another $6 million will be spent on the Park Heights master plan, which is intended to strengthen a dozen neighborhoods in Northwest Baltimore, including Pimlico. Neighborhood officials hope to accomplish about $30 million of work called for in the plan in its first year.

"It's really about what we need to do to turn around Park Heights," said Otis Rolley III, director of the city's planning department.

Nearly 66 percent of the surplus came from recordation taxes - the fee is $5 for every $500 of transaction value. With the recent housing boom, the city expects to collect $106.6 million from the tax this year.

The city's total surplus for the fiscal year that ends in June is projected to be $72.5 million. The difference, about $11.9 million, will be paid to agencies that overspent their budget this year - including the city's Police Department.

The spending plan for the surplus, to be announced at a news conference at City Hall this morning, is separate from the city's proposed fiscal year 2007 budget, which is still being considered by the Board of Estimates.

john.fritze@baltsun.com

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