Mayor Stephanie Rawlings-Blake on Wednesday defended the city's economic growth strategies that include awarding tax breaks to developers -- and said Republican Gov. Larry Hogan's decisions are largely to blame for a proposed $35 million cut to state aid for city schools.
"This is the first time in decades that Baltimore City is outpacing the rest of the state when it comes to economic growth," Rawlings-Blake, a Democrat, told reporters after the city's Board of Estimates meeting. "To me that proves our strategies are working. Baltimore is growing again."
With development booming in Baltimore, the city's property wealth grew by more than $1.3 billion last year — nearly 4 percent, by far the fastest rate in Maryland. But those gains -- which largely have been fueled with tax credits -- have come with a cost: millions in cuts in state aid to city schools.
Under the state's main funding formula, the city is scheduled to lose about $14 million in state aid next year because of the growth in property value. It stands to lose another $11 million under Hogan's proposal to cut in half the extra money given to Baltimore and other jurisdictions where it's more expensive to run a school. And the city would lose $10 million under Hogan's plan to cap an automatic increase for inflation.
"The cuts, 61 percent, are coming directly from the governor's choices," Rawlings-Blake said. "The rest are from the existing formula, which inadvertently punishes Baltimore for growing."
Some lawmakers are now arguing that the General Assembly should change the school funding formula, which gives great weight to property values. But others say a city with a waterfront ringed by pricey new buildings would have more money for schools if it hadn't handed out so many tax breaks to developers.
"While some of us who are predisposed to be against incentives are characterizing it as downtown development, these projects are all over the city," Rawlings-Blake sad. "They're helping us to grow all over."
David R. Brinkley, Hogan's nominee for state budget secretary, has said Baltimore was hit the hardest in the budget because of its robust growth in property values.
Brinkley noted that both the Horseshoe Casino Baltimore, valued at $360 million, and buildings in the Canton Crossing development, valued at $65 million, were added to the tax rolls in the past fiscal year, contributing to the boost.
At the same time, Baltimore schools saw almost no growth in the student population, and counted fewer students who qualify for free or reduced-price meals or special education services. The state has dedicated funding streams to support such students.
Brinkley noted that the city receives more state aid per pupil than any other jurisdiction in the state — nearly $12,000, about twice the state average. Baltimore still receives about $945 million in state aid for its annual school budget of roughly $1.3 billion. Only Prince George's County gets more.
Matthew Clark, a spokesman for Hogan, said the governor's budget includes more statewide funding for elementary, middle and high school students than any other in history.
"What seems to be getting lost in every conversation about school funding in Baltimore City are the actions the governor has taken to make education a priority," he said. "With $6.1 billion in the budget, Governor Hogan is investing more in K-12 education than any governor in Maryland’s history, and is the only governor to deliver [geographic-based] funding in his first year in office. The Hogan administration is open to ideas from the legislature and other leaders across the state about how Maryland can provide additional investments in education and we look forward to seeing proposals."