By Luke Broadwater, The Baltimore Sun
6:48 PM PST, February 11, 2013
Mayor Stephanie Rawlings-Blake called Monday for "bold reforms" to fix a looming financial shortfall, including requiring more city workers to contribute to their retirement fund, charging residents for trash collection, asking firefighters to work longer hours and cutting the city workforce by 10 percent over time.
In return, she said, the city could use the savings to raise employee salaries and cut property taxes by 22 percent — 50 cents per $100 of assessed value — over the next decade.
Delivering her annual State of the City address, the mayor did not offer specifics of her proposals, but said she would introduce legislation in coming weeks and months.
"This plan doesn't solve all our problems," Rawlings-Blake said. "No realistic plan ever does. But it will show with greater confidence that Baltimore, more than any other city in America, is taking responsibility and getting its own house in order."
"We cannot build the foundation of a growing city on the mud of a fiscal swamp," she said.
The speech was generally well-received by members of the City Council and a conservative think tank — who described Rawlings-Blake as a mayor unafraid to make tough choices — but some proposals were met with skepticism.
Her call for austerity measures came after her administration released a consultant's report last week that said Baltimore is facing a structural deficit of nearly $750 million over the next 10 years. It pointed to municipal pension and health care costs as the two biggest drivers of the projected shortfall.
The mayor said she wants to require current city employees to contribute some of their salaries to their pensions, while moving to a 401(k)-style retirement plan for new civilian hires. She also proposed giving new employees hired in the Police and Fire departments a "hybrid" retirement system.
Additionally, the mayor said she wants firefighters to work longer than their "outdated" 42-hour week and said she hopes to shrink the size of city government, without "major layoffs," by at least 10 percent over eight years.
Michael B. Campbell, president of the Baltimore fire officers union, said administration officials outlined their plan for the department in a briefing last week. He said they want to cut the equivalent of 300 positions while imposing longer hours and worse retirement benefits.
While his members would earn more for a longer week, they would earn less per hour, he said. "That's a pay cut," he said. "They're going to have a tough time recruiting."
City Councilman William H. Cole IV said he believes the council will set an example on the issue of pension reform. On Monday, he introduced a resolution that called on the city to shift elected officials' retirement plans from traditional pensions to 401(k)-style plans.
"It's clear to me that we as elected officials have to lead the way," he said.
Rawlings-Blake also said she aims to reduce city health insurance costs and find ways to collect more money from tax-exempt nonprofits — two major areas in which she believes city finances could improve. She said she wants to renegotiate a "payment in lieu of taxes" agreement with nonprofits, which all together occupy $4 billion worth of tax-exempt property.
She called for an "immediate health coverage eligibility audit" to ensure that "all dependent health coverage is legitimate." And she said she planned to charge a "user fee" for trash, recycling and sanitation. The mayor said the fee would help lower property taxes for all Baltimore homeowners.
Even as council members questioned some of Rawlings-Blake's proposals, most said they were pleased to see the mayor tackling the tough issues. For instance, City Councilwoman Mary Pat Clarke took issue with some of the mayor's proposals, including shifting to a 401(k)-style retirement system and charging for trash collection. But she said she supports the effort to rein in long-term spending.
"I think she's a really good, young, forward-looking mayor," Clarke said. "She's doing the right thing. You can disagree on the details, but you have to congratulate the mayor on looking down the road and saying, from her own perspective, where we should be and how we should get there."
City Councilman James Kraft said he supported the move to charge a trash pickup fee as a way to get tax-exempt nonprofits to contribute to the city coffers.
"What's really important is that all of the folks that are exempt from property tax — it gets those people to begin to pay their fair share," Kraft said. "Right now you can't charge them the property tax, but you can charge them this sewer and user fee. ... There will be pushback, but if it's done right, it will give us a tool to cut the property taxes significantly."
But City Councilman Carl Stokes — who also called the speech "very good" — said it missed two key components in reforming city finances: more audits and fewer tax breaks for developers.
"That's a problem," he said. "Harbor Point wants another hundred million dollars. Why? What sense does that make? ... It's greed. That's all it is, unfortunately: greed."
A conservative think tank, the Maryland Public Policy Institute, quickly praised the mayor's plans in a news release.
"We commend Mayor Rawlings-Blake for shining a light on Baltimore's long-festering problems of high taxation and unsustainable entitlement spending," said Christopher B. Summers, president of the institute. "By calling for meaningful property tax relief and pension modernization, the mayor is moving Baltimore toward a future of fiscal solvency and economic renewal."
Rawlings-Blake's speech was well-attended by high-ranking city and state officials, including Lt. Gov. Anthony Brown and state Attorney General Douglas Gansler, both regarded as candidates for governor in 2014.
The address was Rawlings-Blake's fourth "State of the City" speech since becoming mayor in February 2010. She has consistently used the platform to focus on plans to fix Baltimore's financial and infrastructure woes. Last year, the mayor emphasized her goal to grow Baltimore by 10,000 families, along with proposals to increase the city bottle tax and to borrow to upgrade school facilities.
Baltimore Sun reporter Scott Calvert contributed to this article.
The mayor says she will propose these changes to improve Baltimore's fiscal outlook:
•Require city workers to contribute to pensions
•Impose a residential trash pickup fee
•Cut city workforce by 10 percent over eight years
•Use savings to raise salaries and reduce property taxes (currently $2.268 per $100 of assessed value)
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