Baltimore’s Taxpayer Night was held virtually for the first time ever on Tuesday due to the coronavirus pandemic — the economic impact dominated discussion from the city’s spending board, budget department and residents alike.
The annual event, hosted by the Board of Estimates, allows Baltimore residents to lobby for the priorities they think should be reflected in the city budget.
The city is collecting less money due to the pandemic’s grip on daily life, especially in four areas: transportation, tourism, income and investment earnings.
Fewer people driving, traveling and collecting paychecks means reduced parking fees, tourism revenue and income tax. Additionally, Baltimore earns interest by investing cash balances in short-term investments, such as treasury bills. The Federal Reserve actions to lower interest rates have ultimately reduced the city’s interest income.
All in all, budget director Bob Cenname has estimated that Baltimore will bring in about $100 million less than previously expected for the fiscal year beginning in July — meaning the city must face a $42.3 million deficit. A federal stimulus of about $100 million to Baltimore would go mostly to individuals, nonprofits and businesses, he said.
The preliminary budget planned was primarily written before the coronavirus crisis and does not include pandemic-related revisions.
“Due to the swift escalation of the pandemic, there was not enough time to revise the Preliminary Budget Plan and reflect changes in economic assumptions,” Cenname said on Tuesday. “We expect to make significant revisions.”
Cenname said the plan was released as-is for several reasons. For one, city law requires the Department of Finance to release its plan in early April. The plan is also the reference point for public comment at Taxpayer’s Night. Finally, Cenname said the preliminary budget should serve as a transparent marker of the city’s pre-existing fiscal plan before any pandemic-related revisions are made.
In order to figure out what those revisions are, Cenname said his team is basing their projections on a situation in which containment measures such as social distancing are lifted by summer, and the economy has started to slowly recover.
When asked by City Council President Brandon Scott if this situation was worse than the Great Recession, Cenname said it was as bad if not worse.
“We’ve never had a situation where whole segments of the economy have been shut off all at once,” he said.
The city has already started to cut costs. Mayor Young announced a hiring freeze and paused non-essential city spending last month. Public safety agencies such as the Baltimore Police Department and the Fire Department are exempt from the freeze. Certain unessential city services, such as street sweeping, have been suspended.
Mayor Young had also requested that all city agencies cut costs by 5 percent last fall in order to accomodate Baltimore’s financial commitment to funding costly Kirwan Commission legislation to improve public education statewide. Cenname said that makes this new round of cuts easier.
“Luckily, we had done a lot of the planning work with the agencies and we have an idea going forward of what some of those options could be,” he said.
Mayor Young said on Tuesday that he is optimistic that the city can move forward without having to dip into its emergency fund of about $145 million, a move that could affect Baltimore’s bond rating.
“We need to do what we need to do,” the Democrat said. “I would hope that every [lending] agency look at this pandemic and not affect our borrowing power.”
After Cenname’s presentation concluded, city residents virtually stepped forward to make their budget concerns known. Multiple residents said that the coronavirus pandemic is not something the city can police itself out of.
“We need a budget that addresses public health, economic resource disparities and community based law enforcement,” said Carlton Perry, a lifelong resident of Edmonson Village. “We need something that's going to help people and citizens to try and remedy some of the losses from the pandemic.”
Melissa Schober criticized the preliminary budget’s proposed cuts to substance abuse, mental health, and school health services.
“The cuts to mental health services that are reflected in the preliminary 21 budget are unjust and immoral,” she said. “I want to know why Mayor Young would support a budget that would cut three-quarters of $1 million from the health functions of the city at the same time that the Baltimore Police Department, Administration and Information Technology Department receives $594,000 more.”
Her child, Ruth Schober-Levine echoed her concerns and shared an experience from school.
“When there was news coming out about coronavirus, a bunch of kids were going to counseling because they were scared that they were gonna end up dying,” the 11-year-old said. “So why are we cutting these vital services that we need for our children?”
The preliminary budget and the final budget will likely look very different because of the deficit, Cenname said. He and his team will present the final version to the city spending board in May, then the Baltimore City Council will hold hearings on the additional cuts and revenue proposals.