A sharp drop in tax revenues and ballooning overtime spending have Baltimore City officials scrambling to close a $37 million gap in the city’s fiscal 2009 budget.
With transfer and recordation tax receipts running $15 million bellow projections due to a faltering real estate market, and rising spending on fire and police overtime, city officials are being forced to cut back on staffing for emergency medic units, salary increases for some city employees, and the police department’s community relations programs.
The cuts to the city’s $2.9 billion fiscal 2009 budget comes as the city faces not only a slowdown in local tax receipts, but the specter of larger cuts to come from the state, which is also facing a $300 million shortfall of its own.
The planned list of cuts may be only the beginning for the cash-strapped city, accustomed to running surpluses when the real estate market was booming.
“The overall objective is to minimize the pain early and have a lot less problems later on. By acting now, we’re going to avoid hundreds of possible layoffs in the future,” Deputy Mayor of Finance Christopher Thomaskutty said in a phone interview Thursday.
“We have to tighten our belts now because we’re also anticipating bad news from the state later this year,” Thomaskutty said.
Among the cuts being implemented by city officials is an extension of a yearlong hiring freeze implemented by Mayor Sheila Dixon, a hold on planned salary increases for 1,200 city managers and putting off purchasing new vehicles for the fire department, he said.
To address the nearly $21 million, higher-than-expected spending on police and fire overtime, Thomaskutty said officers from the community relations division and the housing department will be moved to regular district patrol. The move will make up for a shortage of patrol officers, Thomaskutty said.
The fire department is also cutting back on overtime spending, and will be delaying advanced life support training for cadets.
The administration also plans to introduce a bill at next Monday’s City Council meeting to cap an annual increase in pension payments by 1.5 percent.
The cuts come as members of the council wrestled with their own proposals for bailing the city out of its shortfall.
City Councilman Robert Curran said the city should dip into its $91 million rainy-day fund to avoid cuts in services.
“If I was advising the mayor, I would suggest we take 25 percent from the rainy-day [fund],” he said. “I think we can say now it’s pouring.”
[email protected]
