Dixon to slash budget by 10%

City cuts may total $200 million

likely service reductions

Sun Exclusive

November 14, 2008|By Annie Linskey | Annie Linskey,annie.linskey@baltsun.com

Mayor Sheila Dixon plans to announce today steep, across-the-board spending cuts - potentially hundreds of millions of dollars - as Baltimore confronts a worsening economy and prepares for expected reductions in state aid.

Most Baltimore agencies would have to cut spending by more than 12 percent in the next budget year, according to union officials and others who have been briefed on the plan. Police and fire budgets would be cut by about 5 percent. The cuts could reduce the city's $2.1 billion budget by as much as $200 million.

The plan comes on top of a $36.5 million cut that Dixon ordered last month for the current budget year.

Philadelphia, Atlanta and other cities have been forced to take more drastic actions, including immediate layoffs, cuts in services and fee increases to cope with millions of dollars in revenue shortfalls. State governments, including Maryland's, are scrambling to compensate for rapidly declining tax revenues.

"She's going to tell everyone what the budget situation for [fiscal] 2010 looks like," said Sterling Clifford, a spokesman for the mayor, referring to the budget year that begins July 1. "If you have a projection of what the budget is going to look like, you should share it as soon as you know."

Clifford would not confirm the target percentages for agencies but said the cuts would be "serious." He said it was too early to know whether the cuts could lead to layoffs, furloughs or reductions in services.

In recent public appearances Dixon has repeatedly warned that steep cuts were coming, and she floated a proposal to cut city trash pickup to once a week and reduce days for collection of recyclables.

Officials said the mayor is giving agency heads time to decide how to achieve the reduction targets. Dixon has previously played down the idea that Baltimore could solve its budget problems by raising taxes or fees, saying that city residents already bear a high tax burden.

In mid-October, the mayor cut $36.5 million from the city budget by continuing a hiring freeze that began in 2007. The Police Department dismantled some specialized units and shifted those officers to patrol to reduce overtime spending, and the Fire Department delayed training programs.

Dixon also wants to reduce a long-standing pension benefit to police and fire retirees that provided extra money in years when the city's investments performed above expectations.

But city officials believe those actions will not be enough to compensate for the spiraling economy, and in particular, the weak housing market. Housing sales fell by 50 percent in the past year, and the city's transfer and recondition tax revenues have plummeted, according to data released by budget director Andrew W. Kleine at a hearing Wednesday.

Making the situation more dire is the expectation that the state could make steep cuts to local aid.

Last month, Gov. Martin O'Malley pushed $300 million in state budget cuts through the Board of Public Works, including steep reductions for health care, higher education and other programs. Those cuts included the elimination of hundreds of vacant positions and about 40 layoffs.

Even so, the state government faces a budget shortfall that could approach $1 billion next year, and anticipated revenue from the legalization of slot machines will not arrive in time to solve the problem. After two years of near-constant cutting at the state level, legislators are expected to closely eye the millions of dollars that flow from Annapolis to Baltimore and the counties when the General Assembly reconvenes in January.

The state won't finalize its budget for the next fiscal year until April, leaving local governments little time to react to cuts. Baltimore's budget process does not begin in earnest until March, and the spending plan for fiscal 2010 is not due to be finalized until June.

A reduction of 12 percent would take $55 million from Baltimore's Public Works Department which is responsible for garbage pickup, and $18 million from the city's Transportation Department, which has repaved hundreds of miles of roads in the past year.

City union officials were notified of the cuts yesterday evening but declined to speculate on potential furloughs or layoffs or possible service reductions.

Glenard S. Middleton Sr., a leader of the American Federation of State, County and Municipal Employees, said the city's management structure is "top heavy" and that he hopes the cuts are felt at the higher-paid supervisory levels. In some cases, he said, there are six levels of managers between the agency head and the worker.

The Police Department would see a reduction of about $15 million after cutting $6.8 million in October.

The city's police union chief, Robert Cherry, noted this year's 30 percent drop in homicides and said he worries that further cuts could jeopardize public safety.

The Fire Department would see a cut of about $7 million; its October reduction was $4 million. The city's fire union head, Bob Sledgeski, said his department is already "cut to the bone."

Other mayors around the country are making similar announcements. According to news reports, the mayors of Philadelphia, Seattle and Atlanta have announced tens of millions of dollars in spending cuts, in some cases involving layoffs.

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