City Council faces bleak financial outlook

By John Fritze

Sun reporter

Mayor Sheila Dixon's administration painted a bleak picture of the city's finances yesterday at the first City Council hearing on the proposed budget, even as members of the council went fishing for money for property tax relief and youth programs.

Baltimore's finance director, Edward J. Gallagher, said the proposed $2.94 billion budget has no room to continue an annual 2 cent reduction in the property tax rate if the city wants to maintain its current services.

"The future is not bright," said Gallagher, adding that the city has long faced a structural deficit that was masked by the surpluses of past years. "It's beginning to rear its ugly head again."

In contrast with more aggressive rhetoric on property taxes that some council members have adopted in past weeks, the council asked technical questions and tried to eke money out of obscure funds to restore the tax break and fund youth programs.

Earlier in the day, Dixon said she had not seen any proposal from the council showing where the $5.4 million would come from to restore the tax cut. Council hearings on the budget will continue through this week.

"People think that there's fat within budgets," Dixon said. "I want them to look as thoroughly as possible because they're going to see that it's very lean."

Some members focused on the tax rate, but others fought for additional money for youth programs. Youth advocates packed the council chambers with students. One group, lobbying for a mentoring program called Peer to Peer, vowed to camp out at City Hall until it receives $3 million.

"Everybody keeps talking about how to reduce violence in our schools," said Cherdaya Allen, 17, a junior at Western High School. "This is the answer."

Protesters picketed outside City Hall this morning.

As they have in past years, some council members zeroed in on the $88 million "rainy day" fund as a source of money. Others suggested the state's recent closing of a tax loophole on business property transfers could create revenue.

Gallagher, a veteran of budget negotiations, resisted attempts to rely on such money.

When City Councilwoman Mary Pat Clarke asked whether the city could use money from a certain tax credit for youth programs, Gallagher answered simply: "No."

"Why?" she asked.

"Because," he said, "we don't have it yet."

john.fritze@baltsun.com