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.

Baltimore Matt February 06, 2013 at 06:43 PM
I think it starts by running many of the poor people out of Baltimore. It's not fair that Baltimore has to deal with a 25% poverty rate when the surrounding counties have less than 10%. This leads to city's budget is going to hell in a hand basket and making the city prohibitively expensive to business or for those raising families that have taxable income because the city is stuck supporting social welfare programs and other social obligation to a population that does not pay taxes. I would ask Stephanie, how are we going to make Baltimore look less attractive to those without income and encourage those folks to move to other counties? When we get those obligations down, we can start cutting taxes, improving schools, balancing the budget, and creating a better Baltimore.
Sanchez February 06, 2013 at 08:37 PM
"Fiscal Reforms" in liberal progressive newspeak means TAXES and more SPENDING.
Cindy Walsh February 08, 2013 at 01:45 PM
As the Mayor knows it is City Hall and the Attorney General's office that created the budget shortfalls by not serving in the interests of the people. We all know that Maryland ranks at the bottom nationally in fraud and corruption and as such we lose billions of dollars each year simply to corporate fraud that is never recovered. These frauds often originate in Baltimore. So when the AG's office refuses to investigate and prosecute health care fraud, financial fraud, contract and bidding fraud the City of Baltimore and Maryland are open the emptying of government coffers. We know as well that the building of what is the equivalent of the European Financial Ministry that is East Baltimore at Johns Hopkins and the Rodeo Drive that is Harbor East and the copious tax breaks that starve the city of revenue all work against a sound government budget process that works in the public interest. Fraud and corruption in a public works contracting system that allows contractors to subcontract to subcontractors so that no accountability allows for all kinds of misappropriation is moving billions from our city's coffers into the pocket of developers and the connected.
Cindy Walsh February 08, 2013 at 01:48 PM
Ring fencing all future tax revenue to these same affluent communities that used current taxpayer money to build assures revenue shortfalls and works against the goal of attracting new people as failure to address infrastructure problems frustrate those already here. So, it is public policy and the failure to enforce Rule of Law that creates these budget shortfalls and these are the areas to go in fixing the problem.


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