Mayor Calls for Fiscal Reforms Following Grim 10-Year Forecast
The city is expected to have a cumulative $745 million operating budget deficit during the next 10 years.
Mayor Stephanie Rawlings-Blake will call for fiscal reforms after the stark predictions of Baltimore’s first 10-year fiscal forecast.
It’s expected that the city will have a cumulative $745 million operating budget deficit during the next decade, $1.1 billion general fund infrastructure deficit and $3 billion in unfunded retiree liabilities between fiscal year 2013 and fiscal year 2022 if reforms are not enacted, according to a news release.
"This 10-year fiscal forecast makes clear that city government must implement serious new fiscal reforms in order to balance the budget, protect city services from major cuts, invest in infrastructure, and reduce the property tax burden for city residents over the next decade," Rawlings-Blake said in the release. "Taking on these challenges will be critical—both for the health of the City's finances and to help Baltimore compete for growth over the next ten years and beyond. A status quo approach is not sustainable."
The mayor’s office said in the release it intends to announce a set of “major reforms” intended to address these issues. The news comes ahead of Mayor Stephanie Rawlings-Blake’s State of the City Address that will be delivered at City Hall on Monday afternoon.
The forecast predicts a skyrocketing structural deficit due to rising costs and shrinking revenues, and being driven by retiree healthcare and pension costs. Also, the city would have to increase capital spending by more than $100 million a year to maintain current standards—independent of school and water infrastructure.
In the news release, the mayor’s office argues that property taxes are already too high, hindering the city’s ability to compete for residents and businesses, and that its income tax is set at the highest allowed by state law. So the city must diversify forms of revenue and lessen the burdens on residents.
A copy of the preliminary fiscal forecast is attached to this article.