Finally, 2012 was a great year for supporting our tourism and hospitality economy. The City was host to several fantastic civic events drawing hundreds of thousands of people and millions in economic impact—Sailabration, the Grand Prix, Artscape, the African American Festival. We enjoyed post-season games of Orioles magic, and our Ravens won the Super Bowl!
These events showcased our city on the national stage and filled neighborhoods with pride and celebration.
Today, I ask you to support our once-in-a-generation effort to rewrite and reform the City's outdated zoning code. The current code and process create a maze of inflexible rules and unpredictable outcomes that can stifle investment. This needs to change.
We have opportunity with TransForm Baltimore to make the process more transparent and predictable—promoting growth while preserving our unique character. Changing the code will enable us to create Transit-Oriented Developments, including along the proposed Red Line. And it will make it easier to adapt old warehouses into artist studios, turn vacant lots into urban farms, and promote bioscience manufacturing.
I understand that the details of this change can be challenging, but we should stay focused on the ultimate goal of approving a modern zoning code for Baltimore's future. Because we must change to grow.
Renewing the City-State Partnership for Schools
Public education is the cornerstone of a growing city. Families have a fundamental right to access a good education in quality school buildings. And providing more opportunities for families to send their children to good public schools will help get Baltimore growing again.
We also know that public education helps break down economic and racial barriers and the ugly cycle of poverty. And the poverty of a government, on its own, is no excuse for failing schools, mismanagement, and bloated bureaucracy.
It was these principles that my father fought for in the 1990's. With new state resources came new accountability to improve student outcomes. The landmark 1997 city-state partnership has made a difference in student achievement.
Under the leadership of Dr. Andres Alonso, student test scores have improved dramatically, North Avenue has shrunk and is better managed, school enrollment has increased steadily year after year, and the number of dropouts has been cut in half. Dozens of new charter and transformational schools have come online, and public school choice is available to most middle and high school students. Thank you Dr. Alonso for your unwavering commitment to the interests of our students.
The fight for better schools is far from over. While teachers and students are making progress, our buildings and classrooms are inadequate and ill-equipped for the 21st century. In too many cases, conditions are downright deplorable and simply unjust.
The state's school system as a whole has achieved a half-decade of national praise and recognition—but you'd be hard pressed to say Maryland's system of public education is equitable among our local jurisdictions. There must be a stronger statewide recognition of the enormous capital needs of local school districts with the oldest buildings.
Our state's constitution is clear. The General Assembly shall "establish throughout the state a thorough and efficient system of free public schools; and shall provide…for their maintenance." The framers of our state constitution did not intend for a child's zip code or the wealth of a local tax base to be the determining factors of whether or not the school they attend is in good repair—but that is the system we have inherited.
Baltimore City is the one of the poorest jurisdictions in the state and has the highest tax effort. A staggering 84% of our students come from low-income families, and we have the oldest, most dilapidated buildings.
We understand that Baltimore must do more locally, and our strategy is not to simply beg the state for a blank check with no strings attached. My father, Delegate Pete Rawlings taught me that approach is just as wrong. We have a responsibility to take our own local action and put forward viable solutions.
In 2012, with the support of education advocates—and against the demands of powerful special interests—this City Council approved an historic increase in new funding for school renovation. Make no mistake—it is largest local source of school renovation funding ever approved in Baltimore's modern history. No one can point to this chamber and say the city didn't put more skin in the game. At the same time, our school system partners have put forward a tough, 220-page, comprehensive plan to right-size & modernize school buildings.
Here's a summary of our local action: This administration and the City Council have made tough choices, increasing taxes to provide dedicated funding for school renovation. The local school board has also made tough choices, approving a plan to relocate or close 29 schools and programs. At the same time, the local school system itself has improved student outcomes, reduced bureaucracy, and put forward a thoughtful plan to finance a major reconstruction effort.
Now it's time for the General Assembly join us with a renewed, landmark city-state partnership—with resources, flexibility, and shared accountability to rebuild our schools. Conditions have reached a crisis point, and a big solution is required. 85,000 of Maryland's children are depending on it.
I am open to any compromise or alternative that does not comprise a child's right to attend a quality school in good repair—but keeping the status quo will only serve to fail our students—and that is unacceptable. We must find a new way to meet our shared objective of improving public school buildings for every child, no matter where they live in Maryland.
Change to Grow
At the same time we seek a renewed partnership with state government—Baltimore must implement major fiscal reforms.
For over 50 years, Baltimore's story has been dominated by a narrative of post-industrial decline. From 1950 to 2000, the city lost a third of its population. Jobs disappeared, crime rates rose, schools deteriorated, and many neighborhoods destabilized. City government itself was left with a legacy of high taxes, growing liabilities, and crumbling infrastructure. But over the last several years, a new urban story is beginning to emerge.
Population loss is slowing to a near halt, and many neighborhoods are experiencing new growth. Baltimore is safer, public education is improving with growing enrollment, more vacants are being rehabbed, and our businesses and institutions have made new investments.
Since 2010, this administration and the City Council have worked together to close $300 million in budget deficits. We averted an immediate pension crisis, eliminated duplicative programs, and began to cut the property tax burden—all while keeping our core services funded, including public safety and public education.
As a result of these tough actions, Baltimore held its own and maintained its bond rating during the worst recession since the great depression, and quality-of-life for city residents has generally improved. Today, we've outlined the progress made over the last three years—but much more work remains to get Baltimore growing again.
The question, for this generation of city leadership, is this: Will Baltimore cement a true turnaround toward a future of growth? Or will we allow our hard-fought victories to become just a momentary pause—a footnote—in a continuing story of decline.
More than a year ago, I said we needed a comprehensive approach to deal with the City's structural problems and I called for the creation of the City's first Ten-Year Financial Plan.
Many cities only engage in long-term financial planning as a reaction to receivership, state takeovers, and bond rating downgrades. In Baltimore it is a proactive effort so that we never reach that point—and so we can choose our destiny, rather than have it forced upon us.
With such a plan in place, Baltimore can end the cycle of deficits that have eroded services and constantly put the City on the defense, instead of investing in renewal. The effort has revealed, for the first time, the true scope of our fiscal challenges.
Since taking office, I've always pledged to talk straight and never sugarcoat our problems. Truth is the first step of any real solution. With that, let me be candid about what we must confront.
First, our city faces a serious structural deficit between slow-growing revenues and faster-growing expenses. Without corrective action, this cumulative shortfall totals nearly $750 million over nine years. To put that number into perspective, it's more than we spend on Police, Fire, Health, and Recreation and Parks annually.
The deficit is largely driven by growing healthcare and pension costs. Even with the reforms we have made, these combined costs are projected to grow by another 40%. And there is a major imbalance in how we compensate our employees. The costs of outdated benefits have crippled our ability to pay workers what they truly deserve in their paychecks.
Second, our city faces a $1 billion infrastructure deficit over the next decade. Roads, bridges, and City buildings—including rec centers, and police and fire stations—need significant investment just to meet reasonable standards.
Third, our city has unfunded retiree liabilities of more than $3 billion, and we must take meaningful actions now in order to afford future benefits.
At the same time, our property tax rate is impeding the City's ability to compete for growth. We all know Baltimore cannot simply hike property tax rates to improve our financial situation. To do so would almost guarantee further population and job losses.
Every elected official, community, institution, and business with a stake in Baltimore's future should share a deep concern for these facts. It is reality. To put our head in the sand and ignore the problem would be an unforgivable disservice to the people we represent and the city we all love.
We cannot build the foundation of a growing city on the mud of a fiscal swamp. The status quo is unsustainable, and the price of inaction is clear. We must change to grow.