To save Maryland, we must first save Baltimore


IN THE mid-1950s the Greater Baltimore Committee, representing the city's business interests, stepped out ahead of a stultified public sector to sketch boldly the outline of a new city and the means to achieve it.

The result was the much-needed impetus that helped create Charles Center. Now, in 1991, the GBC is showing the same inventiveness and energy; it urges, among other well-taken recommendations in its report, "Maryland Depends on the State of Baltimore," immediate passage of the Linowes tax-reform proposals.

Remember that the committee's endorsement comes about at a time when the Baltimore Regional Council of Governments agonizes over whether to even discuss the Linowes Report, when legislators from all parts of the state (including, strangely enough, those from the city) run for cover and when Mayor Schmoke is thought to be "crying wolf" when he predicts financial doom for the city. In this echoing silence of statesmanship (among elected officials, broken only by Governor Schaefer), the GBC is willing to go on the record to acknowledge that this unpopular decision must be made.

Fortunately for the community, GBC not only supports all of the Linowes' proposals; it goes even further, adding ideas of its own.

First, the GBC report calls for radical solutions to two problems: education and fiscal stability. It recommends a level of state funding of schools that enables Baltimore city to equal the spending on each pupil in the rest of the region. Strict accountability standards would apply, and if progress is not made, the state would take over city schools.

Second, it calls for extending the sales tax to many business services and increasing the corporate income tax. Coming from tough-minded business types, these recommendations reflect broad thinking about the public good. And going beyond Linowes, GBC recommends that all future increases in the piggyback income tax be distributed under a formula that takes into account the tax capacity and tax effort of the subdivisions. It would also require the counties surrounding Baltimore to pick up a greater share of financing museums and other cultural attractions that benefit the entire region. For this stance, the GBC won't be get heavy applause outside the city.

Nor will it be praised for pointing out that the city remains the driving force of the region's economic growth, yet does not benefit from this growth. It is the region that does: A significant portion of the workers in Baltimore city live in the counties, and they are paid a higher wage than city residents. This means that 40 percent of the income earned in Baltimore is taxed elsewhere.

Do the counties want to hear that their lower tax rates are the direct result of city-generated tax revenues? They hear it now; GBC tells them that it is because of the city -- its economy, its cultural attractions and its presence nationally and internationally that companies and their employees (at every level) locate in the region in the first place.

And yet the city must provide police, fire, sanitation and parking services to commuters from the counties. At the same time, the city must struggle to meet the extraordinary needs of 50 percent of the state's poor people who live in the city.

The GBC puts it all simply: Baltimore's fiscal problem is that it is responsible for a disproportionate number of the poor. Over the last 20 years the number of poor in the city has not increased appreciably; rather, people who can afford to move out do so. So the percentage of the city's population that is poor has grown tremendously. Consequently, the city's expenses have increased while the city's ability to pay for them has decreased. Its tax rate has gone up and its services have declined, setting off another round of out-migration, reinforcing the downward spiral of distress.

This decline is caused by forces beyond the city's control. The city has not caused its population to be poor, and in fact, operates ambitious and expensive anti-poverty programs. But the extent of the poverty within the city translates into a stunted tax base and handicaps the city's ability to address the need.

The GBC's embracing of the Linowes recommendations for education bears special attention; they are dramatic and far-reaching.

Confronting labor shortages for the first time, business organizations across the country began in the 1980s to recognize that education is a bread-and-butter issue. Like GBC, they joined the long-suffering community activists working for change within the school systems. The dramatic proposals in GBC's recent report may be read as an expression of the frustration these efforts have yielded.

By targeting education for new funding, both GBC and the Linowes Commission recognize the priority education must receive if Baltimore's economy is to prosper.

Ultimately, Baltimore's financial problems can be solved only by transforming poor people who pay little in taxes into not-so-poor people who can pay taxes commensurate with an increased economic status. Though the gains will not be realized in time to rescue the bleary-eyed budget-makers of this city's administration or even its immediate successors, the citizens who receive the effective education that tax and accountability reforms promise not only will reap benefits personally; they also will provide the basis for Baltimore's future financial stability.

We can expect, too, that a productive school system and relief from a prohibitive property tax rate will slow and even stop the flight of middle-class homeowners.

So for the second time, the GBC has stepped up to take a leadership position in moving our region forward. And by its example it dramatizes the urgency of the message of both its report and the Linowes report: To save Maryland we must first save Baltimore.

Robert C. Embry Jr. is president of the Abell Foundation and of the state Board of Education.

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