Mayor Stephanie Rawlings-Blake's proposed $2.5 billion operating budget for next year imposes no new taxes or fees and shrinks the city's workforce to the smallest size in decades, officials said Tuesday. But it also includes no new property tax cuts.
The mayor will unveil her preliminary spending plan for the fiscal year that begins July 1 at Wednesday's Board of Estimates meeting. It is based on a projected 9 percent increase in property tax revenue — $72 million — due to the city's rapid economic growth, particularly around the waterfront.
"This budget reflects a continued recovery of the local economy," said city budget director Andrew Kleine. "This is the largest revenue increase since the recession."
The $2.5 billion operating and $662 million capital budgets are together about 4.4 percent smaller than last year's package, because of a planned reduction in capital spending. The budget includes no major cuts to city services. In previous years, Rawlings-Blake has closed recreation centers and fire companies and imposed new taxes and fees to close budget shortfalls.
Even as revenue to city government is strong, the city workforce is shrinking. Rawlings-Blake's budget funds 13,984 positions — down 274 from this year. The reductions are mainly in the police and fire departments, whose unions agreed to new work schedules in return for raises. Kleine said the jobs will be eliminated through attrition.
During her time in office, the mayor has shrunk the size of city government from 15,343 in fiscal year 2011. By comparison, in 2000 there were 16,153 funded positions in city government. In 1992, there were 17,292 such jobs.
Since 2013, the city has used about 20 different staffing companies to employ contractors to do some of city government's work. Their employers are typically responsible for those workers' health care and retirement plans.
"I often say there are no money trees growing at City Hall, which means that we have to continue doing more with less," Rawlings-Blake said in a statement. "These sound fiscal policies continue to set the stage for economic growth in Baltimore City."
Last year, the city's tax base grew by $1.3 billion — by far the fastest rate of growth in the state. Kleine said the mayor's spending plan does not include a property tax cut due to weaker-than-expected revenue from the Horseshoe Casino.
Rawlings-Blake has pledged to cut property taxes for owner-occupied residences by 20 cents by 2020. Thus far in her tenure, the city has cut the rate by about 13 cents.
"We're ahead of schedule on the plan," Kleine said. "The initial plan assumed more casino revenue than what we're seeing so far."
The budget plan counts on $2.5 million in fines from speed cameras, though none are operating currently. The city's once-lucrative program has been offline since 2013 amid accuracy concerns and disputes with contractors.
The budget funds 2 percent cost-of-living raises for city employees, and allocates $14.4 million for larger increases for the Police Department, whose union negotiated 5 percent and 6 percent raises over the next two years.
The budget also dedicates $38.7 million to school construction — part of a $1.1 billion plan to fix Baltimore's crumbling school infrastructure.
"The school construction money is huge," said City Councilman Brandon Scott, who sits on the budget committee. "I'm very ecstatic there are no new taxes or fees." Even so, Scott said he was "a little disappointed" that there will be no property tax cut next year.
City Council President Bernard C. "Jack" Young called the budget "responsible."
He said he plans to keep a close eye on police overtime costs. The 2016 budget allocates only $16.5 million for police overtime, despite the department's running up an estimated $33 million bill this fiscal year.
"We have to rein that in," Young said. "No other agency can run the kind of budget deficits that the Police Department does. We have to make them live within their means."
The plan also allocates $2.6 million for improvements at the Baltimore Convention Center, and $6 million to operate the Charm City Circulator — a service whose future has been in doubt after city officials said last year it was running a long-term deficit.
City Councilman Eric T. Costello said he wants to the see the Circulator's route expanded in southern Baltimore.
"The Circulator is incredibly important to me," he said. "I'd like to see it fully funded."
In 2013, Rawlings-Blake said the city had run up a structural deficit of nearly $750 million over the next decade. In the latest budget, she said, her administration has reduced that deficit by about $350 million through cuts to health care and pension costs and new work shifts for firefighters, among other changes.
Kleine said the city's cuts to retiree health care costs have reduced the unfunded liability of that program from $2.4 billion to $800 million.
Councilwoman Sharon Green Middleton, a member of the budget committee, said she'd like to see more emphasis on job training programs. She also wants city government to commit to hiring more ex-offenders.
"Funding jobs should be our No. 1 priority," she said. "There should be training in place for laborers to be promoted, and that would create openings for people who are looking for jobs."