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Thorny budget season begins

When Baltimore City Council members contemplate the proposal to raise taxes and fees introduced by the mayor today, they will face a difficult choice: Whom should they anger?

Those who would have to pay the new charges, which range from increased income and telephone taxes to a new bottle tax to per-bed fees for dorms and hospitals? Or those who, without the extra $50 million in revenue that the fees are expected to generate, could lose their neighborhood fire station or rec center?

In what promises to be a contentious budget season, council members appear deeply divided on Mayor Stephanie C. Rawlings-Blake's proposed revenue package, designed to help close a record $121 million gap in the city's $2.2 billion budget.

The $50 million grab bag of taxes and fees would allow the city to "fill critical service gaps without raising property taxes," Rawlings-Blake said at a morning news conference.

"A smarter more efficient government and a diversified revenue stream will put Baltimore on sounder fiscal footing for years to come," Rawlings-Blake said. " We can cut government, make it more efficient and demand and accept that all of us must share the pain."

A doomsday budget that she presented last month would slash the police force, close fire companies, shutter rec centers and lay off hundreds of city workers.

But the mayor's package of taxes and fees can only be implemented with City Council approval. And while members are eager to keep swimming pools filled and police on the street, they are acutely aware that residents, business owners and nonprofit leaders who live and work - and vote - in their districts bridle at new charges during tough times.

"I don't want to support any revenue generator that directly taxes residents, particularly in their own homes," said Councilman Carl Stokes, echoing the sentiments of many council members.

Critics speak up Every option that could close the deficit - whether cutting services, reining in employee benefits or increasing fees - has drawn harsh critics.

Hundreds of community activists, union members and business owners jostled for the attention of city leaders at a public hearing last week, begging them to restore cuts, stop layoffs or abandon proposed fees.

While a handful of the city's legislators, such as Councilman Robert W. Curran and Council Vice President Edward Reisinger, have pledged to support the entire package, others have vowed to fight parts of it. Several council members are drafting plans for revenue-producing alternatives. And some do not want to commit to new taxes until they know how the proposed cuts would affect their districts.

Rawlings-Blake has said that her priorities are returning funds to police and fire, recreation and parks and maintaining the city's infrastructure. Today, the mayor will issue a letter to council members detailing which programs would receive funding if the revenue package is approved, spokesman Ryan O'Doherty said.

The new spending plan would reduce the number of fire companies closed on a daily rotation, maintain police programs at current funding levels and keep all rec centers open until the next school year, he said.

Council members have complained that the administration has released few specifics about which rec centers, pools and fire companies would close, and which could be saved if they agree to new fees.

"I have not had anyone give me answers as to what the mayor's priorities are going to be in terms of restorations [of services]," said Councilman Bill Henry, who says he repeatedly has been denied access to a list of 29 rec centers that are slated to close under the preliminary budget.

O'Doherty said the mayor was hopeful that the revenue package would make most of those closures unnecessary.

The administration is slated to present nine revenue-generating measures to the council today. The mayor's office has asked the council to expedite two of them - a dollar-per-day bed tax on hospitals and university dorm beds and a tax on beverage containers. Many council members have said they support the taxes because they would not unduly burden residents, but hospitals, store owners and manufacturers are organizing opposition.

Disincentive to shoppers Foes of the beverage tax say that it could push shoppers over the city line.

Rob Santoni, CEO of Santoni's Super Market, said that a similar fee implemented by the city in the 1990s caused him to lose a half-million dollars in business a year.

"The business community is going to wind up taking two steps back," he said. "It's just going to slow down the whole economic engine that keeps the city running."

The administration estimates that the 4-cent tax - which would apply to water, beer and soda bottles, but exempt milk and juice containers and 2-liter bottles - could bring in nearly $11 million a year.

"You have to look at what's going to bring the most revenue to the city," Reisinger said, adding that the bottle tax would bring in revenue from those who live in the surrounding counties but come to the city to work or play.

But other council members - particularly those whose districts abut the city - say the tax could be devastating.

"You hurt the merchants, you hurt the community. I just can't do that," said Councilwoman Rochelle "Rikki" Spector.

A 'fair share' from nonprofits City leaders have long sought to derive more revenue from Baltimore's many nonprofits - especially the large hospitals and universities - which do not pay property taxes but benefit from city services. The bed tax, which would apply to the city's private hospitals and universities and could bring in $4 million annually, appears to have broad support from council members.

"I have no problem with private universities and private hospitals contributing their fair share toward the cost of running the city," Councilman James B. Kraft said.

But university and hospital officials say that they, too, are suffering from the weak economy and the new taxes could force them to increase tuition or fees, they said.

Loyola University, which has about 3,300 dorm beds, would pay as much as $1.1 million if the bed tax were imposed, said spokeswoman Courtney M. Jolley.

"We have a very significant resident-student population because we encourage our students to live within the Loyola community," she said. The university has lost state funding and seen a decreased endowment in recent years, she said.

The Johns Hopkins institutions - which include the Homewood campus, the Peabody Institute, the East Baltimore hospital and medical school and Bayview hospital - have about 4,600 beds in total, said spokeswoman Tracey A. Reeves.

Because of the economy, "tuition, philanthropy and federal research support remain uncertain for the foreseeable future," and the hospital is suffering as a result of reduced Medicaid rates, Reeves said.

Councilwoman Sharon Green Middleton said that she currently opposes the bed tax, after hearing concerns from Sinai Hospital Center, but hoped to facilitate conversations between hospitals and the council about it.

Other measures to increase revenue include a 2.5 percent spike in the hotel tax, a 0.15 percent increase to the income tax and higher parking rates. In addition, the discount for the early payment of property tax bills would decrease slightly.

Two initiatives designed to bring in dollars from nonprofits - increases to the telecommunications and energy taxes - could also affect residents. Many council members said they would be more amenable to these taxes if residents could be exempted.

"People are already struggling to pay their gas and electric bills," said Councilwoman Belinda K. Conaway, chair of the budget committee. "Even if you say we want to tack on a penny a month, people are going to scream."

Where Young stands The budget process will prove a test of the relationship between Rawlings-Blake and Council President Bernard C. "Jack" Young. Last year, when Rawlings-Blake was council president and Young chaired the budget committee, the two worked closely together to amend then- Mayor Sheila Dixon's budget.

Young says that he has neither "closed the door" nor committed to any of the mayor's proposed taxes and fees. And he says that he has drawn up several revenue-generating propositions of his own, but will unveil them after the mayor has introduced her revenue package.

Reisinger, who as floor leader counts votes for the mayor, said he was hopeful that council members would stand up to big business interests.

"You have to show the leadership and the spine to say, 'We've got to do this, it needs to be done,' " he said.

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