Mayor, council at odds over tapping rainy-day funds

November 19, 2008|By Annie Linskey | Annie Linskey,

Baltimore Mayor Sheila Dixon has proposed tighter restrictions on a city reserve fund that some City Council members want to tap to ease the effects of budget cuts.

Under the new policy - up for a Board of Estimates vote today - the so-called "rainy day" fund must be maintained at an amount equal to at least 8 percent of the combined value of the city's general fund and motor vehicle fund.

That would be roughly $30 million more than its current value of $92.3 million.

The proposed rules would restrict spending from the reserve account until other leftover money is spent, and the funds would have to be used only to "avoid a budget deficit in any given year." This year, the rainy day fund amounts to about 6 percent of the combined value of Baltimore's $1.3 billion general fund and the $241 million motor vehicle fund.

The city's annual budget documents provide only loose guidance on the use of the money, and City Councilmen Bernard C. "Jack" Young and Robert W. Curran have pushed the idea of taking 25 percent of it to help city agencies.

The proposed policy was subject to heated debate at Monday's City Council lunch, at which members implored council President Stephanie C. Rawlings-Blake to use her authority to defer the agenda item.

City Budget Director Edward J. Gallagher said in an e-mail that he supports the 8 percent figure because of a recommendation by the Government Finance Officers Association that such funds be able to cover a month of a city's operating costs.

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