xml:space="preserve">

After months of rancorous debate, the search for a solution to Baltimore's $121 million deficit draws to a close this week without the sweeping layoffs or deep service cuts that officials had threatened.

But as Baltimore Sun City Hall reporter Julie Scharper relates, analysts are warning of the potential impact of a little-remarked hike in the income tax, and of more tough fiscal times ahead, as federal stimulus funding dries up and the state tightens its belt.

Advertisement

A budget represents a "snapshot of the next year," not a "strategic plan," said Donald Fry, head of the Greater Baltimore Committee. He said officials should seize the lull after the budget's passage to draft a long-term roadmap for economic development.

Economist Anirban Basu, CEO of the Sage Policy Group, sounded a note of alarm over an increase in the income tax, which nearly doubles the disparity between rate in the city and that of Baltimore County.

"I've never seen such a stealth income tax increase in my life," said Basu, who warned that the hike could dissuade those considering a move to the city or prompt residents to leave.

"The city took two steps back when it only needed to take one step back," he said.

Advertisement
Advertisement
Advertisement