Capital Gazette wins special Pulitzer Prize citation for coverage of newsroom shooting that killed five

Fiscal study of cities praises Baltimore's 'resiliency'

A George Mason University study of six cities in "fiscal distress" has concluded that Baltimore is demonstrating "resiliency" and is on "reasonably solid financial footing."

The report, which comes after Detroit's municipal bankruptcy, analyzed the finances of the Motor City and five others: Baltimore, Chicago, Pittsburgh, Providence, R.I., and San Bernardino, Calif. The academics looked at measures such as bond ratings, debt levels and cash flow, determining that Baltimore — which has embarked on a 10-year financial overhaul — was in the best fiscal condition of the cities studied.

Mike Lawson, one of the researchers who worked on the study, said Baltimore is an example of how a city "that has experienced so many of the economic and structural challenges of other older Eastern and Midwestern cities has managed to stay afloat."

"A decades-long tradition of competent and trusted professionals in budgeting and financial administration combined with a political culture where mayors and other elected officials make budgetary and policy choices based on the advice and guidance of those professionals contributes significantly to Baltimore's fiscal resiliency," Lawson wrote.

City officials hailed the report, which is to be released today at the Michigan Municipal League's annual meeting in Detroit.

"I'm grateful they acknowledged that we're putting ourselves in better financial position," Mayor Stephanie Rawlings-Blake said Thursday. "We're not done. We still have more work to do."

This year, Rawlings-Blake began enacting a 10-year overhaul of the city's finances that she says is needed to fix a $750 million structural deficit. The researchers cited those efforts as helping Baltimore avoid a Detroit-style disaster. Among them are overhauls of the city's health care and several pension systems, cuts to Baltimore's property taxes to encourage population growth, and hikes on fees aimed at generating more revenue from visitors and tourists.

The head of a think tank that often has criticized Baltimore officials praised the report as highlighting important steps the mayor has taken. Christopher B. Summers, president of the Maryland Public Policy Institute, called the study a "very good piece that should be on the desk of every legislator."

He pointed to Rawlings-Blake's property tax cuts as evidence that she is focused on improving the city's financial health. "There are still a lot of things that need to be reformed and corrected in the city, but these things take time," he said.

City Councilman Brandon Scott called the report "very encouraging."

"We had to do things we didn't necessarily want to do, but we had to do," he said of changes to the city's health care and pension systems.

The study says Baltimore is similar to the other cities analyzed. It has experienced a "significant decline in manufacturing," job losses, and a "significant increase in blighted buildings and loss of population." Nevertheless, the city has avoided a "financial emergency," from which others have suffered.

The report cites "a confluence" of factors that have contributed to Baltimore's "fiscal resiliency."

Lawson wrote that the city's Board of Estimates, which approves in public all contracts more than $50,000, has played a key role in helping to maintain the city's financial standing. Because such decisions are vetted by the public and independent elected officials, financial decisions are likely to be more sound, Rawlings-Blake said.

The report also states that the city has a relatively strong bond rating, compared to cities such as Washington, Philadelphia and Pittsburgh. Moody's rates Baltimore's bonds as "high quality" with "very low risk."

The researchers also pointed to the strength of Maryland's economy and the level of state assistance to Baltimore as a reason for the city's relative financial health.

While the study cited improvements at all the cities analyzed, it was more critical of the others. Detroit "cannot stay on its current path and survive." Chicago has participated in "privatization schemes gone awry." Pittsburgh "has a long way to go." Providence is on "the brink of bankruptcy." And San Bernardino has declared a "fiscal emergency."

Rawlings-Blake has proposed shrinking city government by 10 percent through attrition as one of the measures to avoid similar financial struggles.

"The decisions that we're called upon to make are very tough," Rawlings-Blake said. "They're felt by all different parts of our community. But on the other side of these tough decisions are an opportunity for growth on firm financial footing."

Copyright © 2019, The Baltimore Sun, a Baltimore Sun Media Group publication | Place an Ad