1:19 PM EDT, March 20, 2013
All those who have been scared by the gloomy talk that preceded Mayor Stephanie Rawlings-Blake's 10-year plan for Baltimore's finances should find some comfort in her first concrete steps to implement it through her new budget proposal. It contains a number of controversial elements that may be difficult to achieve through legislation or bargaining with the unions. But if all goes according to plan, the biggest change most residents will see will be a reduction in property taxes.
Homeowners' rates would go down by 8 cents per $100 in assessed value next year, to $2.168, and everyone else would see a 2-cent cut. For most people, that will more than offset a new, state-mandated storm water management fee that goes into effect July 1. The other tax increases included in the budget will be little felt by residents and don't amount to much anyway: new taxes on billboards ($1 million a year) and taxi rides ($1.3 million) and a proposal to keep the parking tax at 20 percent rather than allowing it to drop as scheduled to 19 percent ($1.3 million) would largely be felt by corporations, tourists and commuters.
Meanwhile, the mayor is proposing one-time investments of an additional $10 million each into demolishing vacant houses and resurfacing roads, $5 million into renovating recreation centers and $5 million into moving some of the city's information technology infrastructure off its antiquated and inefficient mainframe. And that's all on top of $42 million in planned spending on school construction, renovation and repairs, $25 million of which would go toward keeping the city's end of a plan for a major overhaul of city schools now under consideration in the State House.
How did we go from the talk a month ago of massive deficits facing the city to a budget laden with goodies? Part of the answer is that the nature of the 10-year fiscal forecast the mayor commissioned was often misunderstood. The message was not that the city is broke now but that it faces a choice between maintaining a status quo of perennial deficits and service cuts or taking steps now that will pay long-term dividends. The mayor is choosing the latter.
Some of what that entails is simply a smarter way of doing city business. The one-time capital funds for things like road resurfacing come from a shift in how the city manages its vehicle fleet. But the plan also requires cutting the cost of employee pensions and health benefits and finding ways to reduce the size of the city workforce.
The mayor's budget is being introduced in tandem with a plan to require that civilian city employees contribute to their pension fund for the first time — 1 percent of their salary this year, ramping up to 5 percent in fiscal 2018. Baltimore is unique among major local governments in the state in not requiring all of its employees to contribute to their pensions, and the mayor is calling for that increased cost to be offset by a 2 percent across-the-board pay raise.
The mayor's plan would eliminate a variable pension benefit that — like one she fought to end for police and fire employees three years ago — gave outsized rewards in years when the stock market performed well but did not take them back when the market went down. She is also seeking to eliminate pensions altogether for new civilian employees and instead offer them a 401(k)-style benefit.
Absent an immediate fiscal crisis, those changes could be a tough sell in the City Council. But over the next nine years, they add up to $150 million in savings.
Likewise, a proposal to require city firefighters to work more hours at higher pay, which is now heading to arbitration, offers no immediate savings. But over time, city officials believe it will allow them to improve fire coverage while reducing through attrition the number of firefighters by 150.
Absent from this budget are any significant steps toward what is likely the most controversial element of the 10-year plan: a proposal to institute a new fee for trash collection, to be offset by property tax reductions. That's a change the administration is not looking to rush into; it will require a charter amendment, which means it can't happen before the 2014 election, and voters will have the final say on whether it happens.
Mayor Rawlings-Blake's 10-year plan is not about staving off bankruptcy. It's about finding a way to make the city a better, more sustainable, more inviting place over the long term. This budget is a taste of the difficulty that holds, but also its promise.
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