Name: Baltimore’s budget plan braces for ‘historic lows’ in revenue with parking, hotels decimated by COVID
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Baltimore’s budget plan braces for ‘historic lows’ in revenue with parking, hotels decimated by COVID

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AdvertisementBy Baltimore SunApr 07, 2021 at 4:45 pmBaltimore’s finances will continue to suffer as a result of the coronavirus pandemic, city officials said Wednesday as they rolled out a preliminary budget for the fiscal year that starts July 1.The $3.6 billion spending plan accounts for “historic lows” in revenue from parking, hotel taxes and the Baltimore Convention Center, sectors that have been decimated by the pandemic. And officials expect some revenue streams, particularly parking, may never rebound if working from home remains widespread.AdvertisementFederal aid has provided a “lifeline” for the city during the pandemic, officials said Wednesday, offsetting many of the costs Baltimore has incurred. About $103 million was received via the federal Coronavirus Aid, Relief and Economic Security Act, or CARES Act, passed last year — $24.5 million of which will carry over for expenses in fiscal year 2022. Another $670.3 million is expected to be delivered by the American Rescue Plan, enacted last month, although that money is not yet accounted for in the proposed budget.City officials also hope for the reimbursement of millions more from the Federal Emergency Management Agency.AdvertisementBut revenues continue to lag, coming in shy of projections already drastically reduced for fiscal year 2021, which ends June 30. Budget officials told members of the Baltimore City Council’s ways and means committee in February that the city .“It will be a modest growth budget, but this is where we are based on the economy and the slowdown from the pandemic and the extended period of time it will take for recovery,” said Henry Raymond, the city finance director, during a media briefing Wednesday.The new spending plan, which must be reviewed by the City Council and approved by the Board of Estimates, holds the line on property and income taxes, but includes a 911 fee increase of 25 cents per phone line. The increase is needed, city officials say, to fund a transition to Next Generation 911 technology. That includes secure call networks, better call routing and integration of call location data into emergency dispatch systems.Unlike last year’s spending plan, the proposed budget includes no layoffs or furloughs for city employees.The proposed budget is the first put forward by Democratic Mayor Brandon Scott, who . Raymond presented it Wednesday to the Board of Estimates.Although Scott led a charge last year when he was City Council president to , the department’s budget would increase by $28 million, or about 5%, under his budget plan for 2022. City finance officials attributed that increase to hikes in pension health care costs and workers’ compensation for the department.Last year, the City Council cut $22.4 million from then-Mayor Bernard C. “Jack” Young’s proposed budget, the majority from police spending. The council intended for the savings to be redirected to community enrichment efforts, but the money. It instead went into a surplus for the 2022 budget.Scott said Wednesday he remains committed to long-term reform of police spending. In a statement, he said he will move forward with creating a task force, including political and community representatives, to develop a five-year budget reduction plan for the police department.Advertisement“As my administration works tirelessly to re-imagine policing in Baltimore, we must ensure that city resources are being used effectively and efficiently,” he said. “The task force will be charged with identifying reductions that can be made responsibly over time, while creating a blueprint that diverts appropriate service requests so officers can focus efforts on reducing violent crime.”During the media briefing, Raymond said Scott’s budget plan assumes “modest” recovery from the pandemic in fiscal year 2022 and assumes there will be no further COVID-related disruptions or shutdowns.Revenue streams that rely on tourists and commuters have been hardest hit by measures to control the spread of the disease. Baltimore’s projected budget anticipates $13.9 million in parking revenue next year, less than half of what the city made before the pandemic. Hotel tax revenue is projected at $19.6 million in 2022, 8% less than the current fiscal year, for which expectations already were reduced.Reassessment of city properties, a tool to increase property tax revenue, also has been hampered by the pandemic, particularly on commercial land, Raymond said. Properties in South Baltimore were reassessed for the 2022 budget, and the overall growth in value was 3.6%. Residential properties in the area increased in value by 6.5%, but commercial properties increased by only 0.9%, he said.“The commercial properties were dragged down specifically due to the COVID environment,” Raymond said. “We’re talking retail, hotel and other business establishments that have been negatively impacted by the pandemic. As the economy recovers, the assessments will recover. But it will take time.”The unusual circumstances presented by the pandemic have been a boon for a few areas of the city’s budget. Traffic camera revenue jumped substantially as drivers took advantage of less crowded city roads. Baltimore expects to make $21 million in fiscal 2022 from red light and speed camera fines. More than $24 million is expected to flow into city coffers for fiscal 2021.AdvertisementHeightened pandemic spending is expected to continue through the next year, including $10 million budgeted for mass vaccination sites — although city finance officials expect that cost to be reimbursable through FEMA. A rental relief and eviction prevention program also is expected to continue through fiscal 2022 under the spending plan.Scott has proposed a one-time $6.7 million loan to Visit Baltimore to stabilize the tourism organization’s budget. The nonprofit, funded by hotel taxes and state dollars, has been hard-hit by the pandemic. The group would have to pay back the loan over five years as hotel tax revenue recovers.Scott’s spending plan includes only limited new initiatives amid the reduction in revenue, but he proposes leveraging financing from private groups to fund several quality of life and anti-crime initiatives. For instance, a recycling can is expected to be provided to every city home with $8.3 million from a private grant and an interest-free loan, city officials said. Another $600,000 in private funding would pay for the creation of a Group Violence Reduction Strategy. That plan would expand opportunities for at-risk populations and try to foster better relationships between police officers and the communities they serve.The proposed budget also calls for the sale of three city-owned properties in hopes of generating $15 million. City officials have not elaborated on which properties could be for sale.Today kicks off the city’s extended budget season with the administration presenting to the Board of Estimates a preliminary $3.6 billion operating and capital budget. In about a month, the budget will move to the City Council for consideration. — Office of Baltimore City Council (@BaltCouncil)Democratic City Council President Nick Mosby said Wednesday the will undergo a “rigorous” review from the council.“We will hear from agencies, ask the tough questions, dig into the facts and data, hear from residents and ultimately pass a budget that is fiscally responsible and delivers the quality of service that Baltimoreans deserve and should expect,” Mosby tweeted Wednesday.AdvertisementHe declined to comment further.WeeklyKeep up to date with Maryland politics, elections and important decisions made by federal, state and local government officials. &gt; Baltimore must pass a budget no later than June 24. The Board of Estimates is slated to vote on the plan May 12 and it is expected to be introduced May 17 to the City Council.Councilman Eric Costello, chairman of council’s ways and means committee, said the budget appears to be a responsible plan.“I think there are obviously some deep revenue shortfalls projected because of COVID, but there’s also some strong support coming in from the federal and state government,” he said.Costello said he was pleased to see funding in the plan for the city’s graffiti removal efforts. The service was not offered throughout much of the pandemic as public works employees concentrated on trash removal.In addition to offering projections for the coming fiscal year, Baltimore finance officials also flagged several potential challenges Wednesday that the city can expect to face in the near future.AdvertisementOne issue involves the city’s Hilton convention center hotel, which was financed in 2006 with $300 million in bonds. Repayment of the bonds is generally made with operating revenue from hotel, hotel taxes and property tax revenue generated by the hotel. But the hotel has been closed for a year, causing a shortfall in those revenues. The bond agreements for the deal require the city to pay up to $7 million in hotel tax revenue toward the bonds when other revenues fall short. Scott’s projected 2022 budget includes a full $7 million for the coming year, officials said.Baltimore also is bracing for additional expenses in 2023 thanks to education reform legislation passed at the state level. Known as the Kirwan bill, the law calls for increased contributions to schools. Baltimore expects to pay $63 million more in 2023. Advertisement

AdvertisementBy Baltimore SunApr 07, 2021 at 4:45 pmBaltimore’s finances will continue to suffer as a result of the coronavirus pandemic, city officials said Wednesday as they rolled out a preliminary budget for the fiscal year that starts July 1.The $3.6 billion spending plan accounts for “historic lows” in revenue from parking, hotel taxes and the Baltimore Convention Center, sectors that have been decimated by the pandemic. And officials expect some revenue streams, particularly parking, may never rebound if working from home remains widespread.AdvertisementFederal aid has provided a...

Baltimore’s budget plan braces for ‘historic lows’ in revenue with parking, hotels decimated by COVID

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