Baltimore Mayor Sheila Dixon ordered city agency heads yesterday to reduce their department budgets by an average of 12.9 percent next year, saying cuts are necessary because the city is entering a period "worse than the Depression."
Dixon's goal is to reduce spending from the city's general funds by $65 million.
"Times are tough," said Dixon, flanked by her agency heads, during a City Hall news conference. "Everyone is feeling the pinch."
The mayor said the city is facing tax revenue reductions as costs of pension contributions, debt and health care are on the rise.
She declined to discuss specific reductions, but she said that all options are on the table, including potential layoffs. Her directive affects only city spending - which is $1.3 billion - not the state and federal funds that Baltimore receives. The city's operating budget is $2.1 billion.
Last month, the mayor snipped $36.5 million from the current year's budget, which took effect July 1, by cutting police and fire overtime and extending a hiring freeze.
She said she might seek more reductions in the current spending plan next month, when she expects to hear whether the state will further cut local aid.
The city's full budget picture could change significantly if the economy worsens or if the local spending reductions trigger decreases in state and federal matching sources.
The mayor said yesterday that she does not know how much in matching funds the city could lose.
"We're going to try to be really creative with that," she said about ways of holding onto state and federal funds.
Baltimore's belt-tightening comes amid similar action by other cities and states. When Maryland cut about $300 million last month, the city was hardly affected, losing $316,000 in health aid and $290,000 in public safety grants, according to figures compiled by Andrew W. Kleine, the city budget director.
Many City Hall officials have worried that the city would see bigger cuts. In recent public appearances, Dixon has said she believes city residents already shoulder a significant tax burden and had shied away from increasing taxes. But during a 6:30 a.m. bike ride yesterday, the mayor said she has reviewed proposals for fee increases; she declined to specify them.
The mayor called agency heads to yesterday's news conference, but none spoke about how to address the budget challenges.
Police and fire union leaders have said their agencies will have to cut spending by about 5 percent.
