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Lower property taxes but higher fees for city residents

Baltimore residents will pay less in property taxes but more in stormwater and taxi fees under a $2.4 billion budget approved by the City Council on Monday.

The cut will reduce the property tax payments on a home valued at $200,000 by about $140. But the same resident will pay $40 to $120 for stormwater cleanup and a 25-cent fee on each taxi ride — with another water bill hike on the horizon.

The result? The cost of living in Baltimore could go up for many people.

"Hopefully, it'll be a wash for residents," said Councilman Robert W. Curran, who represents Northeast Baltimore. "Obviously, if you have a larger property, and more impervious surface, it's going to be more that you have to pay."

The budget includes a 2 percent raise for city workers, but they will see cuts in their health and pension benefits, and civilian employees will start contributing 1 percent of their salaries to their pensions. Overall, the changes will help close a $30 million projected budget shortfall.

Mayor Stephanie Rawlings-Blake said her budget, which the council approved with few changes, is designed to help the city attract new residents.

"I'm working very diligently to reduce our property tax, so we can have property tax competitiveness with the surrounding jurisdictions," the mayor said Monday. "We're trying to do it in a responsible way that allows us to have a fiscally sound budget but to also plan for investments in the future."

The one part of her spending plan that is still pending is the proposed 15 percent increase in water bills, which the administration has said would raise rates for the typical customer by more than $100 a year. That proposal faces a vote by the city's Board of Estimates later this month.

The $2.4 billion operating budget for the fiscal year that begins July 1 represents about a 3 percent increase from this year. The capital budget is another $1.2 billion, 80 percent of which will go toward updating, maintaining and repairing water and wastewater infrastructure.

The budget allocates $10 million for demolishing vacant homes, $10 million for resurfacing at least 200 miles of roads and $6.5 million to upgrade and operate recreation and after-school centers.

It also includes a new tax on billboards in the city — $15 per square foot for those that change images electronically, and $5 per square foot for those that don't.

While the council let much of the mayor's budget proposal stand, it did reduce the administration's proposed charges for stormwater cleanup, which were required by state law.

The council approved a stormwater fee plan under which homeowners will pay $40 to $120 per year, depending on the amount of paved and other surfaces that allow rainwater to wash pollution into waterways. The council limited the fees for business customers to 20 percent of property taxes — and it approved an 83 percent cut to the administration's proposed rates for religious institutions.

The fees — sometimes derided as a "rain tax" — are designed to pay for stormwater treatment, wetland restoration and other projects aimed at improving Chesapeake Bay water quality.

Only Councilman Brandon Scott, who represents Northeast Baltimore, voted against imposing the fees. He said he was opposed to a state-mandated fee that didn't come with any funding from the state.

"My district is one of the heaviest impacted," he said, referring to small businesses that have large parking lots. "They're going to be hit hard by this."

Even so, Scott said, he was pleased with the budget overall, given the cuts to city services in previous years.

"There are no rec centers closing, which is a great thing," he said. "There are no fire closures, which is a great thing. There are no layoffs, which is a great thing. Employees will actually get a raise. It shows we're starting to come out of the recession, slowly but surely."

But some council members said they were displeased with a requirement that municipal workers would have to start paying into their pensions.

The mayor plans to require Baltimore's non-public-safety workers to contribute another 1 percent of their salaries to the pension fund each year for five years until workers contribute 5 percent. In return, employees would get a 2 percent raise each year for a total raise of 10 percent.

Councilwoman Helen Holton, who represents west and southwest Baltimore, said she wanted to see employees' pension benefits also increase. She said the workers affected by the changes are some of the city's poorest.

"I don't think it's a good budget," Holton said. "We're a tale of two cities. What it means to become a Baltimore City resident is to take on a lot of fees and taxes."

Union leader Glenard S. Middleton Sr. said he hopes the council in the future will increase pension benefits for municipal workers, including laborers in the public works and transportation departments.

"This is the right thing to do for the lowest-paid employees in the city of Baltimore," Middleton said. "They live paycheck to paycheck. They want to be treated with respect."

The budget represented Rawlings-Blake's first opportunity to implement steps of a 10-year financial plan she says is needed to fix a $750 million structural deficit that the city is facing over the next decade. She says the city will need additional "bold reforms" to fix the looming financial shortfall, including charging residents for trash collection, asking firefighters to work longer hours and cutting the city workforce by 10 percent over time.

In return, she said, the city can use the savings to raise employee salaries and cut property taxes by 22 percent — 50 cents per $100 of assessed value — over the next decade.

For the coming fiscal year, the city is cutting the rate by 2 cents per $100 of assessed value, with owner-occupied homes eligible for bigger breaks.

"I strongly believe that history will recount the work of this council as setting Baltimore on a path for growth, furthering the renaissance we have been experiencing," Rawlings-Blake said.

City Council President Bernard C. "Jack" Young praised the budget as "responsible" but said he planned to fight the 15 percent water and wastewater bill increased slated for Board of Estimates approval later this month.

"I think what they're asking for is a little exorbitant," Young said.

But Councilman William H. Cole IV said he believes the budget is relatively painless.

"This is my first year on the council where we haven't had to do any massive cuts," he said. "To me that was a great improvement. I think it's part of budgeting in the future instead of budgeting a year at a time."

luke.broadwater@baltsun.com

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Copyright © 2014, The Baltimore Sun
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