- The Washington Times - Sunday, June 27, 2004

BALTIMORE (AP) — City residents face higher taxes and cuts in jobs and services under a $2.1 billion budget approved by the Baltimore City Council last week.

Telephone, energy and real-estate taxes will go up Thursday as part of a $30 million tax-increase package. Library hours at some branches will be reduced, and the police department’s mounted patrol unit might be eliminated, city officials said.

It was the council’s duty to spread the pain as broadly as possible, council member Keiffer J. Mitchell Jr. said after the vote last week.

The tax and budget package was the result of unusually tough negotiations between the council and Mayor Martin O’Malley, a Democrat who had sought $45 million in higher taxes to stave off deeper cuts in what he called “quality-of-life” services such as trash collection and police protection.

Mr. O’Malley thanked the council for the tax revenues it did increase.

“Government is about choices,” he said. “We may not have agreed on every point, but I firmly believe we are working toward a common goal, and that common goal is a better city.”

“I think we have done the work of the people with this budget,” said Stephanie C. Rawlings Blake, council vice president and chairman of the Budget and Appropriations Committee.

Mr. O’Malley’s original budget called for reducing services such as fire protection, library hours and trash collection and cutting more than 500 city jobs, 186 of them police officers. Many of those jobs are vacant, but more than 200 city workers received precautionary pink slips in case the council refused to pass any taxes.

The council’s scaled-back $30 million tax package saves 387 of the city jobs, including all but 44 of the police officers. Twice-weekly trash collection and recycling will continue. Fire houses, which would have closed on a rotating basis, will maintain their schedules.

Mr. O’Malley proposed a flat $3.50 monthly fee on cell phones and conventional land lines to replace a 12 percent tax that applied only to wired phones and averaged $2.22 a month for residents.

He also sought a 4 percent energy tax on residents, manufacturers and nonprofits, leaving unchanged an 8 percent levy on other businesses. And he wanted to nearly double the recording tax on real-estate purchases, from $2.75 per $500 of transaction price to $5 per $500.

Members amended all three tax bills, lowering the city’s yield by $15 million but also softening the blow for residents and manufacturers.

The council agreed to the $3.50 flat fee on wireless and land lines, but placed a much lower fee, 35 cents, on the individual phone lines that are part of large phone systems common to corporations and hospitals. Pagers are exempt.

On the real-estate tax, the council agreed to raise it to the level that Mr. O’Malley wanted. But the council exempted the first $22,000 of the home’s value in calculating the tax. With the exemption, the tax on a $100,000 house will rise from $550 to $780. Under Mr. O’Malley’s plan, it would have gone up to $1,000.

The council passed an energy tax of 2 percent on residents and manufacturers, down from the 4 percent that Mr. O’Malley proposed. As adopted, it will cost the average resident $26 a year.

The tax will be far more costly to manufacturers and nonprofits. Nonprofits, including hospitals and universities, had been paying millions of dollars to the city in lieu of taxes. When that agreement expires at the end of the coming fiscal year, the nonprofits will be assessed a 6 percent energy tax.

The council required that the energy tax on manufacturers expire in fiscal 2007, unless the council votes to reauthorize it.

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