City Council explores options to close budget gap

October 26, 2008|By Annie Linskey | Annie Linskey,annie.linskey@baltsun.com

Most City Council members agreed last week that the city's worsening financial situation merits budget cuts, but they're not sure Mayor Sheila Dixon's list of $36.5 million in proposals is the best way to close the gap.

Some want Dixon's office to take more of a direct hit from the spending reductions. Others believe the city should look at dipping into its rainy day fund to make up the shortfall.

Councilman Bernard C. "Jack" Young, chairman of the budget and appropriations committee, said that next year he would like to shelve the mayor's Office of Neighborhoods, the Office of Criminal Justice, the CitiStat program, her homelessness programs and the planned Office of Sustainability.

By Young's count, those cuts would save $43.8 million. They wouldn't help to balance this year's budget, but they would close anticipated future budget shortfalls without touching police or fire programs that he said are important.

Most of those operations are funded through federal and state grants. The city's portion of those programs is $6.2 million.

Councilman Robert W. Curran floated a different idea, asking that the city use a portion of a reserve fund, which includes $92.3 million that the city set aside for "budgetary flexibility should material funding shortfalls occur," according to the city's budget. Curran would like to use no more than 25 percent of that fund.

The discussions among council members were brewing last week after Dixon announced that the city is facing a budget shortfall this year. The council has no authority to alter Dixon's midyear budget moves but can make cuts to the next proposed spending plan the mayor introduces.

Dixon wants to extend a hiring freeze on nonemergency city employees, dismantle some specialized police units and postpone fire training to save $36.5 million.

She indicated that more city cuts could come in the next few months if the state, which is facing its own budget problems, withdraws city funding.

Sterling Clifford, a spokesman for the mayor's office, said the programs on Young's list either save the city money or directly impact residents, and he doubts they would be targeted in the next round of cuts.

The neighborhoods office, which cost $667,000 this year, helps organize community events and forums, he said. The CitiStat operation, which costs $661,000 a year, tracks statistics in city agencies and is designed to look for inefficiencies in government, Clifford said.

Clifford defended the city's $29.7 million homelessness program. "I think you would have a hard time finding anyone who believes it makes the city better to stop finding shelter for people," he said. That program benefits from $22 million in federal grants and $3.8 million in state grants.

Young also believes the mayor's $12.7 million Criminal Justice Office - funded mostly by federal grants - would be better off under the city's Police Department. Clifford called that an "accounting trick" that would not save money.

Clifford said the city isn't ready to touch the rainy day fund. "The deficit we're aware of is closed by the spending reductions we've made," he said. "If you dip into the rainy day fund once, that is all you've got, so we have to be cautious about that."

Andrew Klein, a deputy finance director, wrote in an e-mail that the rating agencies would be "concerned about us tapping reserves before we exhausted all other reasonable measures for balancing the budget."

But other members have showed interest in Curran's idea. Councilman William H. Cole IV said he'd like the city's finance director to tell the council "what the steps should be" to use that fund, but added that he believes it is premature at the moment to spend from it.

Others voiced more general concern about cuts. "The city of Baltimore does not have a lot of fat on the bones," Councilwoman Helen L. Holton said. "It could be that now we're looking at cutting into the bone."

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