With Declining Revenue Amid Pandemic, Baltimore City Faces A $42.3 Million Deficit
Members of Mayor Jack Young’s administration would have spent Wednesday morning explaining their official preliminary budget to Baltimore’s spending board -- but because of the novel coronavirus pandemic, that proposal has become “largely irrelevant” according to the city’s budget director.
Instead, Robert Cenname used the Board of Estimates meeting to explain Baltimore’s fiscal outlook to city officials, warning them that the budget must be almost totally revamped before it is finalized in May.
“We don't know how long this will last, or what our budget will look like once the dust settles,” Mayor Young said in a Wednesday news conference.
Because of the pandemic’s grip on daily life, the city is collecting less money: fewer people traveling, driving, and collecting paychecks means reduced parking fees, tourism revenue and income tax. All in all, Cenname estimates that the city will bring in about $100 million less than previously expected for the fiscal year beginning in July -- translating to a $42.3 million deficit.
“As the crisis escalated over the course of March, we were actually putting the finishing touches on the preliminary budget,” Cenname said. “The big disclaimer is that it's largely irrelevant because the economic assumptions are going to change so significantly.”
Mayor Young announced a hiring freeze on March 20 as a “necessary first step” to preserve financial resources. Public safety agencies such as the Baltimore Police Department and the Fire Department are exempt from the freeze.
City finance director Henry Raymond said the freeze has allowed the city to focus on “the core priorities of the city as it relates to the 2021 fiscal year budget planning process.”
Young said that he has not yet seriously contemplated layoffs, but that the city has to be realistic and that some belt-tightening will be required.
“I personally don't want to see layoffs,” the Democrat said. “I keep saying that the president, Mr. Trump, needs to bail out cities. They're bailing out large corporations, but no one is talking about backfilling cities in terms of lost revenue.”