Seeking to provide a small but symbolic break to Baltimore's overburdened homeowners, Mayor Kurt L. Schmoke announced today he has agreed to a nickel cut in the city's property tax rate.
The mayor said he met with budget officials and identified a combination of savings that would permit both the much-sought tax relief and a 2 percent pay raise to city workers.
The move would lower Baltimore's property tax rate, which is by far the highest in the state, from $5.90 to $5.85 per $100 of assessed value. The rate will be in effect for the city's new fiscal year, which begins July 1.
The Schmoke administration's initial $2.2 billion budget proposal offered no cost-of-living increases for city workers and no cut in the property tax rate. However, in the last month, the mayor has worked with the City Council to identify savings in the no-frills budget.
"It became clear to me that the tax cut, even though it was a nickel, really had a symbolic significance beyond that nickel savings," Mr. Schmoke told reporters this morning at his weekly press briefing.
Even a nickel cut is difficult at a time of ever-dwindling federal resources and a decline in property tax revenues from downtown office buildings and utilities, the mayor said. But he said he is convinced that gradually lowering the tax rate is an important part of reducing the high cost of living for Baltimore homeowners.
His announcement caps more than a month of exchanges with the council over the likelihood of a tax cut.
Mayor Schmoke initially said the austere budget offered little room for tax relief without slashing city services. However, he also said he was determined to avoid a last-minute budget battle and encouraged the council to show him savings.
Last year, the mayor vetoed the budget after the council tentatively approved a nickel tax cut, saying there was not enough money to hire additional police officers.
Council President Mary Pat Clarke clashed angrily with the mayor at the time over the appropriateness of a tax cut. This year, however, Mrs. Clarke maintained that while she believes a cut is needed as part of a broader program to revitalize the city, she would not spar with the mayor over a nickel.
Two weeks ago, Mrs. Clarke said savings from the cancellation of the city's contract with the Pulaski High way incinerator should be used for a tax cut.
The mayor's budget proposal projected only about $750,000 in savings from the February cancellation of the incinerator contract -- criticized by many as a sweetheart deal for the politically influential owner, Willard Hackerman. But under questioning by Mrs. Clarke, city officials acknowledged the savings could be as much as $2 million.
Yesterday, Mrs. Clarke delivered a letter signed by herself and 13 other council members to the Board of Estimates outlining savings that could be used for a tax cut.
Among them were the incinerator contract cancellation, cuts in $6.4 million allocated for capital projects and the use of about $1.3 million in reserve funds.
Mayor Schmoke said this morning that the city also is considering raising permit fees that have not been increased for the past decade.
Budget Director Edward J. Gallagher said he is still working on specific cuts in capital projects, which could include replacing aging roofs, upgrading air conditioning systems, removing some underground storage tanks and replacing plumbing in the city's Wolman Building.