The last several years have been hard on Maryland cities.
Highway user funds have been slashed. Property tax revenues are still lagging. Meanwhile, towns are trying to cope with aging infrastructure and stricter environmental regulations.
“We’re still in very interesting financial times. I’ve done my fifth budget now, and every budget has started off somewhat with a deficit,” Frederick Mayor Randy McClement said.
As the Maryland Municipal League’s annual convention kicked off in Ocean City on Sunday these issues were still plaguing many cities.
Jim Peck, the Maryland Municipal League’s director of research, said the lack of highway user revenue still remains a huge obstacle for cities. Municipalities generally don’t receive much in the way of state aid. So when the roughly $45 million in highway user revenue were nearly eliminated six years ago it was a major blow.
Those funds fell to a low of about $1.6 million to be divided among 156 municipalities. Although Gov. Martin O’Malley has restored some of the money, the fiscal 2015 budget includes only about 50 percent of what cities were receiving. That boost in spending was also accomplished with one-time funds.
“That has far and away been one of the biggest concerns our municipalities have had,” Peck said.
Peck said the slow recovery of the housing market still remains a problem for cities because their largest source of revenues is from property taxes. Although the losses could have been offset by raising property taxes most municipal officials are loathe to do so.
“A lot of municipalities ate the difference,” Peck said.
Mayor Jim Ireton is quick to point out his city isn’t just a sleepy Eastern Shore town.
Salisbury has 33,000 residents, and over 60,000 people with a Salisbury address.
“I think sometimes it gets lost that we’re the second-fastest growing city in Maryland between 2000 and 2010 and the sixth-fastest growing between 2010 and 2014,” Ireton said.
Ireton said the growth has brought new challenges to his city. He said on a given weekday 140,000 to 160,000 people come into town. As a result, officials are wrestling with a wide variety of problems, ranging from burglaries increasing during the day to the rising influx of traffic into the city’s limited space.
“This is the hub. This is the industrial, commercial, residential, health care center, education center, of the entire Delmarva peninsula,” Ireton said.
Another challenge is to replace many of the blue-collar jobs the city has lost during the last 30 years. Businesses such as Crown Cork and Seal (now Crown Holdings), Dresser Wayne and Campbell Soup Co. have all left the area, taking jobs that were a pathway to the middle class for many residents with them.
“So we’re really trying to focus on being more business friendly to attract businesses that allow people to find that ladder into the middle class,” Ireton said.
In Frederick it’s all about the finances.
Mayor Randy McClement is trying to find the right balance of providing residents services they want in a fiscally responsible manner. But trying to do that while losing highway revenue funds has been a major struggle, especially when a tax increase is out of the question.
“There’s no way we could try to raise taxes to cover costs when [residents are] having trouble making ends meet,” McClement said.
He’s also on a mission to try to attract more business to the community by moving forward with projects such as the $15 million second of phase of the Carroll Creek Linear Park, and developing a hotel and large meeting space in downtown.
Although the city recently experienced nearly a 3 percent increase in property tax assessments, McClement said his city is like most others in the state — holding its own.
“I don’t see municipalities across the state having the problems you hear other places in the country. We’re not doing as well as we’d like to, but we’re staying flat, and in these times that’s a high achievement if we can just stay level,” he said.
Gaithersburg has become a boom town.
Recent U.S. Census Bureau data showed it’s the eighth-fastest-growing city in the United States. But the city is still has to struggle with budgets and push for economic development like any other municipality.
“The biggest problem that any government ever faces is their budget,” Mayor Sidney Katz said.
Gaithersburg is debt free and has raised taxes one time in 45 years and tries to maintain a reputation for being fiscally responsible. But Katz said keeping the city’s budget in good shape means increasingly putting an emphasis on economic development.
“In many cases areas are business friendly but a perception happens and all of the sudden we don’t market ourselves well,” Katz said.
Another major challenge for the once-rural town is transportation. Making sure the transportation system is effective will require the city to be served by multiple types of transportation that will require Gaithersburg to work with every level of government.
“When you deal with multimodal approaches it’s not just the municipality that has to deal with it. You need to deal with it from a county level, from the state level as well, and from the federal level. … A lot of the funding for the mass transit comes from the federal level,” Katz said.