Budget foes fail to offer plan for city Annual negotiations produce acrimony but no strategy


Is any more money stuck between the cushions of those lime green couches at Baltimore City Hall?

As the city's painfully trimmed budget went into effect, finance officials wrap-ped up their year-end housekeeping last week with $1.9 million to spare. That discovery came not long after the mayor managed a surprise $3 million to restore grants to recreation services, the symphony and two big-name museums.

Neither surplus is particularly large. Nor is it unusual to find some unspent cash in a budget as cumbersome as the city's. But the sudden lift in the city's fortunes contrasts sharply with the gloomy outlook of the budget brinkmanship earlier this summer.

Only $1 million more than the amount that has turned up in the last month was at the heart of the acrimonious showdown between Mayor Kurt L. Schmoke and the City Council over taxes and spending.

But Schmoke and his archrival, Council President Lawrence A. Bell III, fought bitterly over how to close a $6 million budget gap.

Both men resorted to anecdotes about family finances to explain their positions.

"When families don't have enough money to maintain the same lifestyle, they have to make adjustments in their spending habits," Schmoke wrote in Baltimore Progress, his publicity sheet.

Bell compared his plan to attempting to "feed six children with five potatoes." Instead of letting one child go hungry, Bell said, he wanted to cut up the potatoes - or take more from each city agency - to provide enough for all.

A better household analogy for the struggle to balance the city's $2.4 billion budget is this: A family of nine used to rely on its grown children to help pay the bills. Then, three moved out. The family, significantly poorer, has a harder time with the mortgage payments and starts dipping into an inheritance.

L Essentially, that's what the cash-strapped city keeps doing.

Baltimore's tax base has yet to emerge from its decline for most of the decade. The population shrunk as the middle-class fled to the suburbs, plunging from 900,000 in 1970 to 675,000 today. The diminished value of downtown office buildings took away much-needed tax revenue. The only bright spot has been higher returns from income taxes this year.

Last year, the city faced a $31 million shortfall. But Schmoke was able to deal with it fairly painlessly with a $25.2 million windfall from an insurance refund. Later, the mayor and Bell worked out a compromise to tap into the pension surplus while raising some fees and making smaller budget cuts.

Financial planners warn against using one-time funds for general expenses. It's not a long-term solution. Schmoke recognizes the problem. Bell appears less concerned; in June, he proposed using another $2 million from the pension surplus on top of the $10 million tapped by Schmoke to offset what originally was an $18 million shortfall.

Both men believe the city has to make some unpopular cuts in services. Yet both have failed to clearly articulate a strategy for improving the city's fiscal well-being.

The mayor says the city needs a consistent source of new revenue. But he's been unable to make a persuasive enough case for raising the tax rate.

In 1992 and 1993, Schmoke twice proposed income tax increases, only to be rebuffed by the council. In 1996, he again tried to raise the income tax but backed down after a barrage of complaints. This year, he flirted with an energy tax that he also withdrew.

He's had little luck convincing the council - or the public. Last year, he lobbied community leaders with the simple message: "Somebody is going to have to pay something if we are going to pay for these services." Perhaps it was too bland and prosaic; few appeared to believe that paying higher taxes would improve their daily lives.

Now, Schmoke says he's changing tactics. He's given up on raising money and will focus instead on reducing the size of government. But once again, his message has not been compelling enough to win over critics. His attempts to cut the city subsidies for arts and recreation have met with a chilly reception; many groups fear they can't abruptly stand on their own.

For his part, the council president insists the city can manage without imposing new burdens on the taxpayers. But he, too, hasn't come forward with a well-conceived plan. So far, he's reacted to the mayor's budgets with his own discrete cuts that make no structural changes and only settle an immediate cash shortfall.

Many citizens have grown skeptical, even disillusioned with this budget routine that gets repeated with little variation year after year.

Dennis Zembala, executive director of the Baltimore Museum of Industry, couldn't resist a crack when he heard of the $1.9 million.

"Where was this money, in a trash can behind City Hall?" said Zembala, whose museum is losing part of its city subsidy. "This all gets hard to understand."

JoAnna Daemmrich is a City Hall reporter for The Sun.

Pub Date: 8/03/97

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