Groups push for fiscal stability; Organizations offer remedies for city's troubled finances


In 1923, Baltimore businessman William J. Casey recommended that 25 of the city's largest businesses send their experts to City Hall to make city government more efficient.

Mayor Howard J. Jackson took Casey up on the challenge, creating the Commission on Governmental Efficiency and Economy Inc.

Almost 25 years after the group disbanded in 1975, a new movement is growing among city residents and business leaders who want to play a role in improving the city's troubled finances. The organization, created on the same Casey principle, is the Baltimore Efficiency and Economy Foundation Inc., a nonprofit arm of the Baltimore Homeowners Coalition.

As a lobbying group, the coalition has spent years trying to convince city leaders to adopt suggestions that they believe can help cut the city's high property tax rate. In the last several weeks, two independent studies also have been published about city government waste, which has played a role in the projected $153 million budget deficit facing Baltimore over the next four years.

"There is widespread, pervasive concern about the fiscal stability of the city," said Karen M. Footner, a BEEF organizer."There is a lot of talent in the community ready and willing to commit their services."

Mayor Kurt L. Schmoke, who will be stepping down after 12 years, created the Millennium Group two years ago to explore how the city could be run more like a business.

The group of six city administrators, headed by former City Councilwoman Vera Hall, has recommended that the city explore hiring private companies to provide some city services.

A recent report by the group showed that the number of city-owned cars has grown over the last two decades while the number of employees has declined. In 1983, the city had 3,000 cars for 17,936 employees, or one for every six workers. Today, the city has 5,750 cars for 16,087 employees, or one for every three employees.

Reducing such disparities is key to improving city finances, the Millennium Group said.

"Baltimore City government cannot continue to conduct business as usual if it hopes to avert future budget deficits in the face of structural changes in its revenue base," Hall said in the introduction to the report. "Revenues are decreasing as businesses and middle class families leave the city for the suburbs, while at the same time the demand for services is increasing as the remaining population becomes on average more needy."

The Millennium study comes on the heels of a similar study by The Calvert Institute, a conservative Baltimore think tank. The Calvert study showed that Baltimore receives 44 percent of its revenue from the state and federal governments, making it the most dependent city in the nation.

This despite the fact that it is number 5 on the list of the 51 highest-taxed cities, the Calvert study states.

"This sort of state and federal generosity is unfortunate because it allows the city indefinitely to postpone necessary restructuring," said Calvert President Douglas Munro.

All three groups, including BEEF, see hiring private companies to handle city services as part of the solution. BEEF contends that Indianapolis has saved $422 million since making city workers compete with private companies in 1992.

Whether such recommendations from the private sector are welcomed will depend on the new mayor. Democratic mayoral nominee Martin O'Malley said he is opposed to widespread privatization, calling it an excuse for poor city management. O'Malley instead supports creating a labor-management task force to help reduce city spending.

Like city union leaders, O'Malley believes front line workers are best able to create more efficiencies. Recent recommendations from labor unions suggested ways to cut $2 million from the city budget.

"We need to be about changing and I support change," said Glenn Middleton, president of the American Federation of State, County and Municipal Employees union, said in response to the citizen groups' recommendations. "But none of the [groups] are doing the work."

When he took office eight years ago, Philadelphia Mayor Ed Rendell created the Mayor's Private Sector Task Force on Management and Productivity, a group of 300 business executives lent to the city to help spot waste and inefficiency. Since then, the city has hired 46 private companies to handle city services.

Representatives of the Greater Baltimore Committee said, after listening to Rendell's former chief of staff speak Friday about the virtues of business-government coalitions, that they would be interested in forming a similar group for the next mayor. Guidance from the business community helped Rendell turn a $1.4 billion deficit when he took over in 1991 into a $70 million annual surplus today.

O'Malley's opponent, Republican mayoral nominee David F. Tufaro, supports the Indianapolis model of allowing private companies to compete with city workers. Tufaro notes that using a private company, Indianapolis -- a larger city than Baltimore -- spent $9 million on its fleet maintenance in one year, compared to Baltimore's $35 million.

Since then, Indianapolis has hired 70 companies to handle everything from copying services to managing waste water. "I don't like the term privatization," Tufaro said. "It's competition."

Government leaders note that wholesale privatization of city services also may not be in the city's best interest. After soliciting bids to privatize part of the city's trash collection, the Millennium Group found that the city was providing the service for $1.1 million less than the lowest bidder.

In 1923, its first year of operation, the Commission on Governmental Efficiency and Economy Inc. organized a payroll system, formed the department of public works, established an independent audit arm and conducted an inventory of city assets at no cost to the government.

As the new mayor takes over, people like Footner, Hall and Munro hope that their input and studies can help the city begin thinking about new ways of doing business.

The city is considering extending a $50,000 grant to BEEF to conduct its first study, comparing health benefits granted to Baltimore city workers to those given to workers in similar-sized cities.

"The purpose of BEEF is to bring the professional experience of the Baltimore region to assist with the operation of city government so that it can become more efficient," Footner said.

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