Either Baltimore City officials are smoking too much pot or they are naturally deluded, if the 2009 proposed budget released Wednesday can serve as evidence.
The $2.921 billion total plan includes a 4.9 percent increase in operating expenses and a 31.1 percent increase in capital expenditures as our nation?s financial system clings to solvency, job reports weaken, recordation and transfer taxes fall from the faltering housing market and debt financing increases for the city.
Sure, anticipated revenue growth may be less than the 6 percent in previous years, but the budget must be based on reality, not irrelevant comparisons from prior years with different economic outlooks.
Instead of raising spending, Mayor Sheila Dixon and city officials should find ways to cut the budget to prepare for a loss of revenue.
Growth being “much less” than recent years is no justification for spending money the city will not have.
It?s not as if the budget authors cannot recognize the warning signals.
Early in the budget they admit the city?s unemployment rate typically runs between 1.5 and 2 times that of Maryland and that if the recession lingers the city will suffer more than other parts of the state and nation.
It also says the city will likely experience fewer home sales and projects $30 million less in recordation and transfer taxes in the coming year.
Yet the budget projects an 11.4 percent increase in income tax revenue, based on assumptions about wage growth and the total number of taxable returns from previous years.
How do these two views mesh?
The general fund budget also includes $30.1 million for salary increases for city employees and no layoffs, making the city the only employer where a recession brings job security and raises for its employees.
The other serious lapse is the city?s continued underfunding of retirement obligations for city employees.
Health care obligations alone will cost every man, woman and child in the city about $4,600 unless the city takes steps to appropriately pay down its $2.9 billion pending bill.
If one word could describe this budget, it would be procrastination based on hallucination.
That may work for 2009, but what about the next year and the next? Who will pay those bills?
