Maryland could solve its $700 million budget gap right away: Cut Baltimore City from the dole. Ever-hungrier, the city keeps grabbing more from the state tax pie at the expense of roads and bridges and other projects throughout the state. It’s like a metastasizing tumor making the whole of Maryland sick.
State legislators would never be so bold to say that in public. Instead, Senate President Thomas V. “MikeÓ Miller Jr. and Speaker of the House Michael Busch late last month appointed a committee to study “state, county and municipal fiscal relationships,Ó with the goal of reviewing their “sustainability.Ó
It’s about time. For too long, state taxpayers have rewarded Baltimore for its failure to thrive by handing more and more money to it as it pushed business and people from its borders. In 2006, the most recent year statistics are available, the state sent about $1 billion to the city. And that figure is a low-ball estimate since many payments, like interest on bond bills, are not included in that number.
If the group, chaired by Sen. Edward Kasemeyer (D- Baltimore and Howard Counties) and Del. Adrienne Jones, (D-Baltimore County ) at least acknowledges Baltimore City’s role in depleting state resources, it will have been a success and create the framework to discuss how and why aid should be distributed to local jurisdictions.
Kasemeyer said it is too early to discuss legislative goals because the group has not met yet, but he acknowledged an “ongoing struggleÓ between richer and poorer delegations within the state over aid.
“The Balance SheetÓ from the Department of Legislative Services would be a great place for group members to start their research. It outlines how much each county contributed in taxes to state operations and how much each receives back.
Unfortunately the data lags two years behind real time — the most recent report from December 2008 analyzes 2006 tax information. But the trends have not changed.
From 1997 to 2006, counties have received on average from 35 to 40 cents back from the state for every tax dollar generated locally. Baltimore has always blown that figure away – and keeps taking more and more.
In 1997, the state returned 81 cents to the city for every tax dollar gleaned from it. In 2006 it was 96 cents. That means that Baltimore City residents do not fund state universities or highways or state agencies and everything else the state does and that other local jurisdictions must pick up the slack.
By comparison, Montgomery County gets 17 cents back for every dollar it contributes to state tax coffers. Howard County gets 25 cents back of what it contributes and Prince George’s County gets 55 cents.
Unlike every other jurisdiction, the state also pays for functions in Baltimore City normally shared or paid for completely by counties. Statewide, local community colleges receive about 24 percent of operating funding from the state and 30 percent from the county.
In Baltimore City, the community college is “operated and funded by the stateÓ at a cost of $34.3 million in 2006, according to “The Balance Sheet.Ó Legislation in 1991 also authorized the state to pick up the tab for the Baltimore City Detention Center and Central Booking and Intake Facility – at a combined cost of $117.7 million in 2006.
In “Nudge,Ó economists Richard Thaler and Cass Sunstein outline ways to structure policies so that people make better choices. Baltimore’s behavior shows it is ripe for a push. But what’s clear is that giving the city more money has not helped it to reform its finances – it’s made it more dependent on state aid and more able to make poor decisions.
Maybe it would not have forced taxpayers to absorb the $950,000 mortgage of the failing Senator Theatre, for example, if it needed that money to pay for professors’ salaries. Any legislative proposals to emerge from the working group must acknowledge that fact and tie money to performance goals.
At the outset, this might demand more money from the state so that the city can lower astronomical property taxes to attract new residents, for example. The alternative: Paving fewer potholes, building fewer miles of public transportation and supporting less research, is unfair to the 5 million people living in the 23 other counties in Maryland.
Examiner columnist Marta Mossburg is a senior fellow with the Maryland Public Policy Institute and lives in Baltimore
