The city’s Board of Estimates will hold its annual Taxpayers’ Night on Wednesday beginning at 6 p.m. at the War Memorial Building near City Hall.

The event is a public forum on the proposed 2013 budget of Mayor Stephanie Rawlings-Blake, which will also be the topic of several public hearings before the City Council this spring.

Facing a $48 million budget deficit, Rawlings-Blake last month proposed the $2.3 billion operating budget that calls for a reduction of the municipal workforce by eliminating 231 positions that are now vacant.

The budget proposes to lower the property tax rate by 2 cents per $100 of assessed value.

The proposed budget also has several cuts; the mayor also has proposed to close three fire houses in the city, some recreational centers and a reduce hours for some public libraries. City workers and retirees would pay more for health benefits and current employees would not receive a cost-of-living raise under the proposal that would take effect on July 1.

Taxpayers’ Night gives citizens a chance to voice concerns about the city’s budget proposal before the Board of Estimates. The board is headed City Council President Bernard C. “Jack” Young, and also includes Rawlings-Blake, City Comptroller Joan Pratt, Director of Public Works Alfred Foxx and City Solicitor George Nilson.

The meeting will begin at 6 p.m. at the War Memorial Building, located at 101 N. Gay St.

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Baltimore Mayor Stephanie Rawlings-Blake has pledged to seek a three-cent increase in the bottle tax this year as a way to help raise $300 million to help fund school construction and renovations.

In her first State of the City address since she was elected to a full term last fall, Rawlings-Blake challenged the City Council to pass legislation raising the bottle tax from two cents to a nickel next year “to be real” about helping to fix many of the city’s decaying schools. Other proposed revenue streams include revenues from slots parlors.  Both would be used to help secure $300 million in bond sales for the construction.

“State budget experts have warned that these financing proposals need more vetting — and so, together we must exercise due diligence,” a draft of Rawlings-Blake’s speech given Monday afternoon at City Hall said.

“The special interests and lobbyists will tell you there’s another way, but they won’t tell you how — they can’t. We need to be real. This is a big problem that requires shared sacrifice. It can’t be fixed with accounting gimmicks. It’s a new tax and its one we need to pass now to invest in our kids and our future.”

The mayor pushed the first bottle tax two years ago amid a bruising fight with the council and city businesses.

In her speech, she also highlighted her plan, unveiled late last year, to increase the city’s population by 10,000 over the next 10 years. She said the city is creating community job hubs in “areas with high unemployment and poverty, fully funding our one-stop career centers and adding year-round job opportunities for young people” and pledged to continue full funding of the Neighborhood Main Streets program as a way to help support small businesses.

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Just like last year, an alcohol tax is being proposed as part of health legislation in this year’s legislative session.

The bill, which has not been scheduled for a hearing, is emotional for both sides — higher taxes on the one side and health care on the other can elicit some pretty strong arguments.

Today I got an e-mail that the legislation is being renamed (maybe for an extra tug on those heart strings?) to the Lorraine Sheehan Health and Community Services Act of 2010 in honor of former Del. Sheehan who died last year. Sheehan was elected to the House of Delegates in 1974, 1978 and 1982. She also served as Maryland Secretary of State from 1983 to 1987 and was inducted into the Maryland Women’s Hall of Fame in 2002.

Emotions aside, let’s look at the breakdown. Essentially the bill would raise taxes to pay for health programs.

• Distilled spirits would go from $1.50 to $10.03 per gallon,
• Wine would go from 40 cents to $2.96 per gallon
• Beer would go from 9 cents to $1.16 per gallon

Con: Opponents of the act say restaurateurs and other distributors can’t afford another tax when the recession has made survival hard for many business owners. From the Restaurant Association of Maryland:

While tax increase supporters will argue that it has been far too long since such taxes were increased, they forget that sales tax on alcohol increased by 20 percent along with all other taxable goods and services during the most recent sales tax increase in January 2008. It would be unfair to our industry to target alcohol for another increase.

Pro: Supporters say the tax would only raise the cost by about 10 cents per drink while raising roughly $214 million in new revenue. Here’s how the revenue would be divided:

• 15 percent: Development Disability Support Fund
• 15 percent: Addiction Treatment and Prevention Fund
• 15 percent: Mental Health Care Fund
• 42.25 percent: Maryland Medicaid Trust Fund to fund health care coverage for childless adults

Like so many battles it’s business owners pitted against public programs — what side do you fall on?

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In case you missed it, an Op-Ed in the Wall Street Journal yesterday berated the state for “fleecing the wealthy.”

It argues that by raising the top marginal income-tax rate to 6.25% in 2008, Maryland pushed its highest earners to move out of state (or, more likely, to change their residencies to their second homes in tax-friendlier states.)

Here are the hard numbers:

• In 2008, about 3,000 million-dollar tax returns were filed
• In 2009, that number dropped to 2,000
• Because Baltimore and Bethesda, among other cities, impose additional income taxes, the WSJ notes “the state-local tax rate can go as high as 9.45%“
• In 2008, MD projected an extra $106 million in revenue from the increase; because of the drop in returns, the wealthy actually paid $100 million less in taxes in 2009 than in 2008

Before you cry foul, the WSJ does concede that the majority of the loss in filings “no doubt” results from the recession. Regardless, some number of rich filers did leave the free state.

Moreover, the op-ed contends:

This is one reason that depending on the rich to finance government is so ill-advised: Progressive tax rates create mountains of cash during good times that vanish during recessions.

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Ever since I missed dining next to VP Joe Biden and his wife Jill by mere minutes (they patronized Booeymonger deli in Chevy Chase for brunch recently), I’ve been hoping for re-do. What are the perks of Bethesda living, after all, if not an occasional political-celebrity sighting?

Maybe if I’d hung around the Bethesda office of Gelman, Rosenberg and Freedman, I’d have gotten lucky.

The Bidens used the Montgomery Co. CPA firm to prepare their 2008 taxes (PDF). For the nosy journalist in all of us, the couple collectively made $269,256 in ’08 – an impressive sum, but peanuts compared to the Obamas’ 2.7 million (PDF).

To their credit, the Obamas were generous with their earnings, donating $172,050 to charity, compared to the Bidens’ $1,885.

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Last year, like thousands of Americans, I downloaded the freeware version of TurboTax to help me file my returns.

This morning, a Senate Committee gave the green light for the confirmation of TurboTax user Timothy Geithner, former IMF employee and head of the New York Federal Reserve Bank, as Treasury Secretary of the United States of America.

Geithner has been the subject of intense scrutiny and a very many hard questions because he failed to pay about $34,000 in federal income taxes while he was at the IMF, which, because it’s an international organization, requires some of its charges to pay their own income taxes, rather than taking them directly out of their paychecks. In one of the hearings, Geithner admitted that he made the mistakes on his returns despite using TurboTax’s assistance.

Literally 10 minutes after reading about Geithner’s committee approval, I got a message in my Gmail inbox urging me to “Get Money Fast!” by using TurboTax again this year. “W-2s are arriving and soon you should have everything you need to finish your taxes,” the message read. Convenient, I thought, because my boss just came by desk yesterday with my W-2. If only it had been so simple for Timmy Geithner.

But more interestingly, this must be a total PR coup for TurboTax — free publicity in hundreds of newspapers and on hundreds of websites and blogs, including this one. The man who will be in charge of the IRS trusts TurboTax to “e-file” his returns! But then again, he screwed up! How could a man who presumably knows more about income tax than anyone in the country screw up his personal accounts, especially while using TurboTax?

Will Geithner’s gaffe do good things or bad things for TurboTax? Are you more or less likely to use it, or another, similar web-based service, to file your returns this year, given that the Secretary of the Treasury used it, but still made mistakes? No one, after all, wants to get audited.

ROBBIE WHELAN, Business Writer

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In May, while in Las Vegas on assignment for The Daily Record I happened to interview C. William “Bill” Struever, the successful developer who heads the Baltimore company Struever Bros. Eccles & Rouse, who was there for a conference. We chatted about many things, including the state of the economy and the price of oil, and one memorable thing he said to me was this:

Clearly, these are uncertain times, but I think there’s a very helpful aspect of $120-a-barrel oil, which is the end of this destructive and wasteful fascination with suburbs and cars.

This idea resurfaced in my mind as I read two cover stories recently, one in The Washington Post and another in The New Republic. Both dealt with what academics, demographers and developers have known for years, what the Post calls “suburban migration” and TNR calls “demographic inversion”—affluent people are moving back to major U.S. cities in high numbers and pricing low-income city folks out of neighborhoods that have typically been associated with poverty, crime and urban decay.

The Post pins this almost exclusively on high gas prices, which it says are now the number two financial concern for American families, while TNR points to the retail, transit and cultural amenities that are returning to cities and attracting young professionals to live downtown.

I was trying to think of how this trend applies to Baltimore, and what the city can do to accommodate returning suburban exiles. Certainly, neighborhoods like Canton, Fells Point and Federal Hill have benefited from yuppies’ renewed interest, and many more areas stand to gain as well.

There has also been a lot of chatter lately about how to attract businesses and residents back to the city, and a lot of it involves building a more comprehensive mass transit system and lowering property taxes. Baltimore has a property tax rate nearly double that of surrounding suburbs. Some believe that high taxes have crippled Baltimore’s ability to attract and keep businesses headquartered in our town.

But if what these publications and Bill Struever say is true, why worry about the tax rate at all?

If the people and businesses are coming back to the city for reasons that have nothing to do with property taxes, why not keep property taxes sky-high, and really build the city’s tax base? That way, we’ll have more money in the general fund to improve infrastructure and mass transit, to provide social services to rich and poor alike and to concentrate on large-scale public works. Why not welcome reformed suburbanites with open arms and ask them to open their wallets?

ROBBIE WHELAN, Business Writer

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If you’re curious when to expect your economic stimulus check (…or already mentally spending it…), click here to see the IRS’s payment schedule.

The schedule’s based on the last two digits of your social security number: basically, the lower the digits are, the faster you’ll get your check. And if you used direct deposit for your federal tax return, you’ll have cash in hand sooner than your paper-check counterparts.

If you didn’t pay your taxes on time – tsk tsk – you should expect to wait at least two weeks longer.

Apparently some lucky ducks could even see their deposits today.

JACKIE SAUTER, Web Editor

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It comes but once a year: Procrastinators’ Night. It’s the tax deadline, celebrated by last-hour filers who throng post office lobbies with returns in hand — or, in the best fashion, are filling out the forms as the clock ticks inexorably toward midnight.

Usually, the scene is best played out in the main Baltimore post office, where traffic runs heavy outside on Fayette Street and workers gaily donning reflective safety garb accept the envelopes in curbside service. Inside, many people are taking the lower road, separating W-2 forms and scribbling numbers on 1040s.

But there’s celebrations in the burbs, too — take, for example, the Pasadena post office at 11 p.m. on Tuesday.

Eight cars are parked near the door, their occupants arriving and departing on this nocturnal tribute to Uncle Sam. Further back on the lot, a woman sits in her car — its interior lights showing her glorious pursuit of the deadline, looking over paperwork, scribbling on a form, turning pages. It’s 11:05 p.m., 55 minutes and counting.

Inside the lobby, a man and woman fill out their forms together. So romantic!

Except for the other filers coming and going, they’re nearly alone in this reverie.

There’s not even a postal worker in sight. Except for the lobby, the joint is closed.

I inquire, gently: “If there’s no one here to take the return, how will anyone know you mailed it in time?”

The woman looks up momentarily, long enough to reply: “Beats me.”

Tick… tick… tick….

DAVID ETTLIN, Daily Record Freelancer

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Cost of a private bathroom, small sitting room and shower for MoCo executive Ike Leggett = $65,225. Oh, and a critical story in the Washington Post.

Timing is everything; even though the bathroom’s cost was approved last spring, its construction begins as Leggett proposes 225 job cuts and increased property taxes to close the county’s nearly $300M budget shortfall.

Leggett’s security chief says that walking through a crowded lobby to use the public restroom could expose him to harm, even though former County Executive Doug Duncan used it for his 12 years in office.

“We had perfectly good bathrooms right at the elevators,” [Duncan] said yesterday. When asked whether he ever felt unsafe using the public restroom, Duncan chuckled, “Heck no.”

PG Exec Jack Johnson has a private bathroom, built prior to his election; so does DC Mayor Adrian Fenty, although he uses the public bathroom at city hall. But unlike federal office buildings, the MoCo offices don’t have security checkpoints or metal detectors.

“We have had some challenging, disgruntled employees or citizens demanding to see the county executive, and from a security perspective he can walk into that,” Chief Administrative Officer Timothy L. Firestine said. “Quite frankly, Ike didn’t want [the new bathroom], but we more or less suggested from a security perspective that he needs it.”

Call me crazy, but it sounds like what’s needed isn’t a private bathroom; it’s a metal detector.

This one only costs $4,000.

But don’t take my word for it – hear what Leggett has to say in his online town hall meeting today at noon.

JACKIE SAUTER, Web Editor

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