Baltimore merchants and residents have mounted a grass-roots campaign against proposed funding cuts to the city's Main Streets program, warning they could be devastating to small businesses and neighborhoods just as many are struggling to recover from the recession.
Opposition to the proposed cuts has been building since the Baltimore Development Corp., the city's economic development agency, indicated in March that four of 10 Main Streets initiatives may be "graduated," or dropped from the program, starting in July. Baltimore leaders are grappling with a record $121 million shortfall in the city's $2.2 billion budget.
The Main Streets program, based on a plan developed by the National Trust for Historic Preservation, makes grants to small businesses for facade and streetscape improvements as a way of attracting more business and foot traffic to certain areas of the city.
"They said 'graduating,' but that's just a euphemism for, 'We're cutting your funding off,'" said Jules "Sonny" Morstein, owner of Morstein's Jewelers in Federal Hill and co-founder of the Main Streets program there, which recently received a national award. "We were left speechless and surprised."
The outpouring of support for the program prompted BDC officials to take the unusual step of putting out a statement Thursday defending the agency's support for small businesses and emphasizing that no final decisions have been made about the funding. BDC President M.J. "Jay" Brodie said he was especially troubled by speculation that funding decisions are being made on racial grounds.
"We've been getting letters, phone calls, e-mails that a decision has been made and it is being made on racial grounds, and that it would affect African-American neighborhoods, which is nasty and not true," Brodie said. He said his agency wanted to "clear the air."
Brodie said he strongly supports the program and is "very sympathetic" to the merchants. He said he hopes to keep all 10 Main Streets programs operating, but "we need to be able to make the numbers work."
The protest against potential program cuts comes as grocers, beverage distributors and other business groups have had some success lobbying against a proposed 4-cent tax on bottled beverages. City Council members devised a plan this week to narrow the budget gap without the levy.
Mayor Stephanie C. Rawlings-Blake believes that Main Streets has been effective and "is deserving of funding," said spokesman Ryan O'Doherty, but he noted that "this is the worst budget crisis the city has faced in its modern history."
O'Doherty pointed out that the proposed city budget also includes reductions in police and fire services and recreation centers, and said small businesses would still have resources and technical assistance through programs such as the Small Business Resource Center and the Emerging Technology Centers. He said the city budget is in flux and that more revenue could be raised to offset some proposed cuts, but added: "I don't want to raise false hopes."
"Small businesses are an important part of the mayor's economic agenda," O'Doherty said. "We're trying to do the best we can with the money we have."
The Baltimore Main Streets program began in 2000 and now consists of 10 neighborhoods: Belair-Edison, Brooklyn, East Monument Street, Federal Hill, Fells Point, Hamilton-Lauraville, Highlandtown, Pennsylvania Avenue, Pigtown and Waverly.
In the past decade, 388 new businesses have opened in the program areas, resulting in 1,098 new full-time jobs and 627 part-time jobs, according to the BDC. In addition, 519 commercial facade improvements have been completed with $4.65 in private funds being leveraged for every public dollar invested.
The BDC outlined a scaled-back Main Streets program at a budget hearing in March. It proposed cutting its operating budget of $978,805 for the fiscal year ending June 30 to $775,593 in the year beginning July 1. As part of the proposed cutback, four of the Main Streets programs would be "graduated," though BDC officials did not say which.
Merchants and community representatives have responded with letters, phone calls, faxes and e-mails to the development agency and the City Council, asking them to reconsider.
Morstein understands that the city needs to trim its budget but said, "This is not smart." He said he prefers that any cuts be spread across the 10 programs, rather than having four lose all city funding.
"We're in a terrible recession," the Federal Hill jeweler said. "If you cut funding for a program as successful as this, there is a good chance you're going to have more vacancies. You're going to lose businesses. You're going to lose employees. It's going to cost 10 times as much. This is not the way to do it. There has to be a better way."