Financial Reform Plan Includes $.50 Cut in Property Tax Rate

| February 11, 2013 | 0 Comments
Baltimore City Release:Mayor Rawlings-Blake Calls for Sweeping Financial Reforms in State of the City Address
Baltimore must ‘Change to Grow’—starting with a strong fiscal foundation.
 
BALTIMORE, MD (FEBRUARY 11, 2013)—Today during her State of the City Address, Mayor Stephanie Rawlings-Blake proposed a bold set of major reforms as part of the City’s first Ten-Year Financial Plan to confront serious financial challenges facing the City over the next decade. The tough reforms, including proposed changes to City employee pensions and benefits, the City’s tax structure, vehicle fleet, zoning code, and overall municipal operations would amount to the most significant changes to the way the City does business in generations.“Our charge is to grow Baltimore, to rebuild a thriving city where more families choose to live, but we cannot build the foundation of a growing city on the mud of a fiscal swamp,” Mayor Rawlings-Blake said. “As a community, we must reject the status quo and embrace a call for bold action. We must change to grow.”Mayor Rawlings-Blake said if bold reforms are enacted, the City’s improved fiscal foundation would help achieve her goal to grow Baltimore by 10,000 families by eliminating a $750 Million structural budget deficit—protecting basic City services from further cuts; allowing new investments in neighborhood infrastructure—including repairing roads and city facilities, and rebuilding ten recreation centers; and providing a funding surge for demolition of more than 4000 vacant homes; all while reducing homeowner property taxes by more than 20% over the next ten years.“Each of these will help retain and attract residents and jobs. The Ten-Year Financial Plan requires tough trade-offs and major changes to past practices, but it also makes investments that reward the future,” Mayor Rawlings-Blake said.Mayor Rawlings-Blake noted Baltimore’s post-industrial decline from 1950 to 2000—when the city lost more than a third of its population—but said a “new urban story” is beginning to emerge.

“Population loss is slowing to a near halt, and many neighborhoods are experiencing new growth. Baltimore is safer, public education is improving with growing enrollment, more vacants are being rehabbed, and our businesses and institutions have made new investments,” Mayor Rawlings-Blake said.

Mayor Rawlings-Blake said Baltimore is at a turning point. “The question, for this generation of city leadership, is this: Will Baltimore cement a true turnaround toward a future of growth? Or will we allow our hard-fought victories to become just a momentary pause—a footnote—in a continuing story of decline.”

“Baltimore is on the cusp of a proud renewal. Now is the time. We can change to grow,” Mayor Rawlings-Blake continued.

Three Years of Progress

Mayor Rawlings-Blake said the new set of reforms will build on progress made in Baltimore over the past three years. The administration, despite nearly $300 million in budget deficits, promoted initiatives to support education, public safety, neighborhoods, and economic growth.

“Over the last three years, we have achieved more results toward meeting the fundamental challenges that caused Baltimore’s decline and impeded our ability to cement a turnaround,” Mayor Rawlings-Blake said.

Crime—including homicides, shootings and overall violent crime—has declined since 2009 to historic lows. Mayor Rawlings-Blake said increased foot patrols, investments in crime-fighting technology, partnerships with state and federal agencies, and a continued focus on violent offenders with illegal guns will help to continue reducing crime.

City schools have experienced a steady increase in enrollment, improved test scores, and the drop-out rate was halved. In 2012, the City approved the single-largest increase in school construction funding in recent history, which will support the School Board’s effort to modernize every facility in the city.

With the Vacants to Value initiative, code enforcement has increased, and the initiative has resulted in over $47 million in private investment. Since 2010, 250 vacant buildings have been torn down, nearly 1,000 have been rehabilitated, and over 30 acres of vacant land has been handed over to volunteers to convert into community space. And last year, the first part of the mayor’s plan to reduce property tax for homeowners was implemented.

In early 2012, when plans to build an intermodal facility to support growth at the Port of Baltimore stalled, the Mayor urged the state and CSX to build in Baltimore, saving money and ensuring that the Port will be ready for the larger vessels traveling through the Panama Canal in 2015. The City also announced the first micro-loan program and Accelerate Baltimore to provide support to small businesses and technology start-ups. And, the City entered into a local-hiring agreement with Caesars Entertainment to give residents priority for jobs at the newly approved casino.

A Call for Action on Gun Violence

Acknowledging the stubborn and tragic reality of gun violence in the city’s neighborhoods, Mayor Rawlings-Blake called on state and federal officials to pass meaningful legislation to make communities in Baltimore and throughout Maryland safer. This year, both President Barack Obama and Governor Martin O’Malley have proposed legislation to restrict access to assault weapons, impose background checks on gun purchases, and improve record-keeping by gun dealers.

“How can we live in a country where gun violence is allowed to rage in our most dynamic urban centers and to shatter the sense of security in suburban schools and communities,” asked Mayor Rawlings-Blake. “Stronger gun laws will make a difference.”

Renewing the City-State Partnership for Schools

Mayor Rawlings-Blake urged the Maryland General Assembly to support the Baltimore City School Board’s facilities plan to improve public schools in the city.

The facilities plan includes the closing of several under-utilized schools and over $2 billion in investment in new and renovated facilities over the next decade. Mayor Rawlings-Blake stressed that while Maryland is annually rated as having one of the best school systems in the nation, the conditions of the state’s oldest schools in the poorest jurisdictions are unacceptable.

“I am open to any compromise or alternative that does not comprise a child’s right to attend a quality school in good repair, but keeping the status quo will only serve to fail our students—and that is unacceptable,” added Mayor Rawlings-Blake. “We must find a new way to meet our shared objective of improving public school buildings for every child, no matter where they live in Maryland.”

Ten-Year Financial Plan:

During the speech, Mayor Rawlings-Blake outlined several new initiatives contained in the forthcoming Ten-Year Financial Plan, including:

  • Rebalancing the way City employees are compensated with more affordable, sustainable benefits and better wages, including:
    • Reforming civilian pension benefits for current employees to require employee contributions, and other reforms, while using some of the savings to improve salaries.
    • Enacting a defined contribution, 401(k) style retirement plan for all new civilian hires.
    • Enacting a “hybrid” defined contribution/defined benefit plan for all new public safety hires, while protecting recent pension reforms for current public safety personnel by appealing a recent federal court decision (the overwhelming majority of reforms were upheld).
  • Expanding wellness programs to promote a healthier workforce and reduce costs and conducting an immediate health coverage eligibility audit to ensure that all dependent health coverage is legitimate. These initiatives build upon major health benefit changes implemented January 1, 2013, which were early recommendations of the Ten-Year Financial Plan process. These changes are already expected to save $20 million annually.
  • Investing in technology and automation to increase productivity.
  • Modernizing the City’s vehicle fleet to reduce maintenance costs.
  • Negotiating a new schedule for firefighters—with higher pay—to increase efficiency and prevent future firehouse closures. Among the 25 largest U.S. cities, including Baltimore, 19 fire departments have work schedules exceeding Baltimore’s 42-hour week, with a median work week of 52 hours.
  • Reducing the size of our workforce by at least 10% over 8 years through a combination of attrition and eliminating vacant positions, on top of the roughly 1,000 budgeted positions eliminated in recent years.
  • Creating a new solid waste enterprise for trash, recycling, and sanitation by collecting a user fee, as is done in other Maryland counties, including Anne Arundel, Howard, Montgomery, and Prince George’s counties, and using the savings to cut property taxes, dollar-for-dollar.
  • Implementing a state-mandated storm water charge to rebuild crumbling storm drains and fund greening projects, in order to improve the water quality of Baltimore’s harbor and city streams.

 

Mayor Rawlings-Blake said that if all of these reforms are implemented, the City would be able to reward the future with the following investments:

  • Eliminating the $750 million structural deficit, thereby protecting basic City services— police, fire, sanitation, and recreation—from major future cuts.
  • Advancing a major funding “surge” for blight elimination—helping to tear down more than 4000 vacant structures. The plan quadruples local dollars for Vacants-to-Value demolitions to more than $100 million over ten years. The investment would be front-loaded with $10 million in City funds combined with another $9 million from the Maryland Attorney General’s mortgage settlement.
  • Increasing capital funding to rebuild ten Recreation Centers as part of a new network of larger, higher-quality community centers.
  • Expanding local funding for transportation, including repairing roads and bridges, while seeking a renewed state commitment for highway revenue, which has declined dramatically in recent years. (In total, the Ten-Year Financial Plan provides for more than $370 million in new local funding for capital investment over 10-years, providing a local stimulus to support job creation.)
  • Sustaining the City’s commitment to school renovations over the long term.
  • Preventing furloughs and pay freezes, raising employee take-home pay, and providing affordable, competitive benefits—helping to attract and retain the best City workforce.
  • Creating tax incentives to convert vacant office buildings and construct new apartments downtown and in key neighborhood corridors to help grow the City’s population.
  • Cutting property taxes for homeowners by nearly 50 cents (22%)—over the life of the Ten-Year Financial Plan by reducing City spending and using savings from the new solid waste and storm water enterprises and other initiatives.

Mayor Rawlings-Blake will host a kick-off presentation of Change to Grow: A Ten-Year Financial Plan for Baltimore before an audience of hundreds of City stakeholders including, community groups, business and institutional leaders, elected officials, and others to provide even more specific details and information about each initiative.

The event will take place on Wednesday, February 20, at 10:30am at the Walters Art Museum, Graham Auditorium, 600 North Charles Street. Seating is limited. Attendees must RSVP by Friday, February 15 to [email protected].

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News releases from various sources around South Baltimore.
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