Youth fund boost denied

City Council panel rejects bid to use interest earned in 'rainy day' account

May 29, 2008|By John Fritze | John Fritze,SUN REPORTER

A Baltimore City Council committee rejected a proposal to use interest from the city's $88 million "rainy day fund" for children's programs during an unexpectedly passionate debate last night about the best way to ensure the city's financial future.

In a blow to advocates who have lobbied City Hall for more money for youth programs, a majority of council members said the city should continue to build its rainy day fund in case of an emergency rather than direct the interest from the fund to youth programs.

Debate over the programs has become especially contentious because surplus funds used to finance them in the past have run dry. Mayor Sheila Dixon earmarked more than $14 million for the programs this year in the budget, and advocates are seeking an additional $4 million.

"To me, it's a priority. It's not fluff," said City Councilwoman Mary Pat Clarke, who has led the effort on the council to fund the programs and who voted in favor of using the rainy day money. "To me, it's the first thing that should be funded every year."

Proponents suggested funding the programs - including $3 million for the youth tutoring program Peer to Peer - is a long-term investment in children that will pay off if those children become productive adults.

Others noted that the programs will be a recurring cost and that spending money from the fund - even if it is only the interest created by the fund - could put the city in a difficult financial position if the economy continues to slow over the next several years.

Members voted 9-3 to kill the proposal.

"You're making it sound like there's no money budgeted for children. We have put in a lot of money compared to what we've had before," said City Councilwoman Rochelle "Rikki" Spector, who voted against the proposal. "We have to be fiscally prudent."

Dixon has placed more than $14.5 million in the $2.94 billion budget for about a dozen programs, including Experience Corps, a program in which older people volunteer in schools, and for home visits to expecting families.

The spending is less than last year's, but more of it is funded directly from the budget - rather than through surplus funds - which makes the money more likely to be sustained.

The proposed budget is expected to be approved next month and will take effect July 1. Despite earlier promises from some on the council, there was no discussion of a 2-cent reduction in the property tax rate that the Dixon administration rescinded this year.

The vote is a major setback for advocates because it is unlikely that council members will find it easier to identify money for the programs by making cuts in the budget.

City officials said the rainy day fund was created in the early 1990s when the state sharply cut funding to Baltimore. Each year, the city puts about $800,000 into the fund, which is expected to earn about $3.5 million in interest this year.

"The rainy day fund is about being able to continue critical services ... in the face of a shutdown," said Helene Grady, a deputy finance director for the city.

Though Dixon and her predecessor, Gov. Martin O'Malley, pushed back against past attempts to dip into the fund, Councilman Bill Henry raised questions this year about spending only the interest from the fund for other purposes.

"I'm not talking about raiding the rainy day fund," Henry said. "At some point, we have to stop the cycle of madness and invest in the generation we have now so that future councils won't be sitting around dealing with this exact same problem."

The other member to vote in favor of the proposal was City Councilwoman Belinda Conaway.

john.fritze@baltsun.com

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