Rawlings-Blake unveils $3.5 billion budget proposal

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Mayor Stephanie Rawlings-Blake unveiled a $3.5 billion budget proposal on Wednesday for fiscal year 2014 that includes revisions in employee pension and health care plans and a 2 percent salary increase for city workers.

The proposal was presented to Baltimore‘s Board of Estimates and soon will move to the City Council for hearings this spring. It remains dependent on the impact of federal sequestration and state aid, both of which are not finalized and may affect the final figures, said Andrew W. Kleine, chief of the city’s Bureau of the Budget and Management Research.

Kleine cited the city’s unemployment rate of 10 percent and sagging property values — both of which have dramatically affected a steady revenue decrease since 2008 — as having impacts on the overall budget. Revenue increased “moderately” by $10 million from fiscal year 2013 to projections for 2014, he said.

“There is no wiggle room,” Kleine said, referring to adjustments that may need to be made in city expenditures as a result of federal sequestration. “Services will be lost in the health department, housing, law enforcement. Job training is a big one.”

The budget proposal includes $2.3 billion for operating expenses — a nearly 3 percent increase over fiscal year 2013 — and $1.5 billion in general fund expenses. The operating fund includes a 9 percent increase in storm water utility costs, which will be assessed to property owners in a new quarterly fee.

The proposed budget is built around a 10-year plan for the city compiled by a private consultant for Rawlings-Blake that calls for elimination of a $750 million structural deficit, while at the same time lowering property taxes by more than 20 percent for city homeowners.

The 2014 budget proposal calls for a reduction in the city property tax rate to $2.168 per $100 of assessed value, meaning a 10-cent drop in the property tax since 2012, the mayor said.

“Implementing the 10-year plan, starting with this year’s budget, will require tough tradeoffs and major changes to past practices,” Rawlings-Blake said. “But doing so will help us make smart investments that reward the future and help get Baltimore growing again.”