Baltimore: broke again
Baltimore faces a significant budget shortfall for the second consecutive year, necessitating another round of service cuts and tax increases, officials said Wednesday.
Fixed expenses are expected to increase sharply, while revenues are projected to decrease slightly, finance officials said.
Finance officials declined to state publicly the precise amount of the shortfall Wednesday, but said it is considerably less than the $121 million gap last year.
Nonetheless, budget director Andrew W. Kleine warned that closing the current gap could prove more painful, because some taxes are at peak levels and nonessential expenses have already been whittled away.
"This could be just as difficult, if not more, to deal with because of the cuts we have already made and revenue we have already raised," Kleine said.
Officials are slated to brief the City Council on the budget Thursday.
The city's budget gap could grow if state and federal aid are further decreased. Officials anticipate losing at least $5 million in state aid, but that figure could mushroom to as much as $45 million if highway user revenue fees and homeowner's tax credits are cut, Kleine said.
As state officials grapple with a $1.6 billion revenue shortfall, additional costs could be pushed onto local governments, including teacher pension costs.
And it is unclear how the Republican-dominated Congress could affect appropriations to the city.
Mayor Stephanie Rawlings-Blake remains opposed to raising the city's property tax rate, which is nearly twice that of the surrounding counties.
Rawlings-Blake sliced $70 million from the city's budget last year by furloughs, layoffs, consolidating offices and requiring employees to pay a portion of prescription drug costs.
She raised $50 million in revenue by increasing new parking fees and fines, raising taxes on hotel rooms, telecommunications, energy and income, and imposing a new 2-cent bottle tax.
She also pushed through an overhaul of the fire and police pension system, which is expected to save the city $106 million this year but prompted a federal lawsuit from the public safety unions.
The full budget, including proposed cuts to agencies and suggestions for new revenue sources, will be presented to the council in late March, Kleine said.