Thorny city budget season looms

Fees and taxes in mayor's plan that's being released today divide city council

April 12, 2010|By Julie Scharper |

When Baltimore City Council members receive the mayor's proposal to raise taxes and fees today, they will face a difficult choice: Whom should they anger?

Those who would have to pay the new charges, which range from increased income and telephone taxes to a new bottle tax to per-bed fees for dorms and hospitals? Or those who, without the extra $50 million in revenue that the fees are expected to generate, could lose their neighborhood fire station or rec center?

In what promises to be a contentious budget season, council members appear deeply divided on Mayor Stephanie C. Rawlings-Blake's proposed revenue package, designed to help close a record $121 million gap in the city's $2.2 billion budget.

A doomsday budget that she presented last month would slash the police force, close fire companies, shutter rec centers and lay off hundreds of city workers.

But a $50 million grab bag of taxes and fees could reverse most of those cuts without hiking already high property tax rates, city officials say.

"The cuts go too far because the city needs new sources of revenue," Rawlings-Blake said. "The city's current revenue model is unsustainable."

But the taxes and fees can only be implemented with City Council approval. And while members are eager to keep swimming pools filled and police on the street, they are acutely aware that residents, business owners and nonprofit leaders who live and work - and vote - in their districts bridle at new charges during tough times.

"I don't want to support any revenue generator that directly taxes residents, particularly in their own homes," said Councilman Carl Stokes, echoing the sentiments of many council members.

Critics speak up
Every option that could close the deficit - whether cutting services, reining in employee benefits or increasing fees - has drawn harsh critics.

Hundreds of community activists, union members and business owners jostled for the attention of city leaders at a public hearing last week, begging them to restore cuts, stop layoffs or abandon proposed fees.

While a handful of the city's legislators, such as Councilman Robert W. Curran and Council Vice President Edward Reisinger, have pledged to support the entire package, others have vowed to fight parts of it. Several council members are drafting plans for revenue-producing alternatives. And some do not want to commit to new taxes until they know how the proposed cuts would affect their districts.

Rawlings-Blake has said that her priorities are returning funds to police and fire, recreation and parks and maintaining the city's infrastructure. Today, the mayor will issue a letter to council members detailing which programs would receive funding if the revenue package is approved, spokesman Ryan O'Doherty said.

The new spending plan would reduce the number of fire companies closed on a daily rotation, maintain police programs at current funding levels and keep all rec centers open until the next school year, he said.

Council members have complained that the administration has released few specifics about which rec centers, pools and fire companies would close, and which could be saved if they agree to new fees.

"I have not had anyone give me answers as to what the mayor's priorities are going to be in terms of restorations [of services]," said Councilman Bill Henry, who says he repeatedly has been denied access to a list of 29 rec centers that are slated to close under the preliminary budget.

O'Doherty said the mayor was hopeful that the revenue package would make most of those closures unnecessary.

The administration is slated to present nine revenue-generating measures to the council today. The mayor's office has asked the council to expedite two of them - a dollar-per-day bed tax on hospitals and university dorm beds and a tax on beverage containers. Many council members have said they support the taxes because they would not unduly burden residents, but hospitals, store owners and manufacturers are organizing opposition.

Disincentive to shoppers
Foes of the beverage tax say that it could push shoppers over the city line.

Rob Santoni, CEO of Santoni's Super Market, said that a similar fee implemented by the city in the 1990s caused him to lose a half-million dollars in business a year.

"The business community is going to wind up taking two steps back," he said. "It's just going to slow down the whole economic engine that keeps the city running."

The administration estimates that the 4-cent tax - which would apply to water, beer and soda bottles, but exempt milk and juice containers and 2-liter bottles - could bring in nearly $11 million a year.

"You have to look at what's going to bring the most revenue to the city," Reisinger said, adding that the bottle tax would bring in revenue from those who live in the surrounding counties but come to the city to work or play.

But other council members - particularly those whose districts abut the city - say the tax could be devastating.

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