Inside City Hall
How Baltimore will spend an unanticipated $54 million budget windfall
Due to higher than projected income and property tax revenues in fiscal 2024, the Scott administration has a pot of unexpected cash at its disposal
Above: Baltimore City Hall. (Mark Reutter)
What to do if you discover that you have more than $50 million in unexpected surplus from last year’s budget?
If you are the City of Baltimore, you allocate it quickly without much public notice and with precious few details.
Today a City Council committee approved in a matter of minutes $53,850,000 in added funds (technically known as supplemental operating appropriations) to the fiscal 2025 budget.
Finding out exactly where this money is going isn’t easy, as seen in the chart below.
But in broad strokes, the items funded by the unexpected bonus can be translated into brief line-item descriptions.
One of the biggest allocations – $10,200,000, listed as CCA001330 – will be spent on “miscellaneous economic development projects.”
City documents do not name which development projects will be funded. Nevertheless, the Ways and Means Committee, chaired by Councilman Eric Costello, voted to recommend the appropriation to the full Council without question or comment.
The official record of how the surplus funds will be allocated. (Bureau of Budget and Management Research)
Grab Bag of Uses
The panel also approved $5.25 million for the City Council itself. Some $1.3 million will be used for staff costs and training, according to city documents, and another $3,900,000 (listed above as CCA000005) for community-based “priority projects” picked by Council members.
Costello said the staffing boost was long overdue, while funding for priority projects – including grants to be awarded by the Council to community groups and others – was negotiated by Council President Nick Mosby with the mayor’s office.
The city purchasing office will be handed $18,920,000 for what is described as “multi-year procurement actions,” and $12,200,000 is destined to go toward transportation and parks capital projects.
Among the allocations: $3.9 million for “priority projects” picked by members of the City Council.
The city will use another $6,000,000 for staffing support at DPW’s Solid Waste Division. Poor workplace conditions at the division, which is responsible for garbage and recycling pickups, were exposed over the summer by Inspector General Isabel Mercedes Cumming.
Mayor Brandon Scott said $20 million has been targeted (over three years) to upgrade sanitation yards where Cumming found no air conditioning, intense heat, and broken lockers and showers facing crew members. None of the newly found money will go for capital or maintenance improvements at the division.
Other funds are headed for:
• After-school programming at city parks ($800,000).
• Staff costs at MONSE, the Mayor’s Office of Neighborhood Safety and Engagement ($500,000).
• Program costs for the Mayor’s Office of African American Male Engagement ($250,000).
• Housing code enforcement staff costs ($315,000).
• Program costs for the Mayor’s Office of Small and Minority Business Advocacy and Development ($315,000).
• Human trafficking grant to MONSE ($200,000).
A Remarkable Turnaround
The budget surplus is a remarkable turnaround from the dire predictions made by Budget Director Laura Larsen and her team just 9½ months ago.
On December 14, 2023, the budget office produced a 29-page outlook projecting a $107.3 million budget deficit for FY25.
“Based on current Level of Service projections, expenditures are growing 2.8 times faster than revenues” was the report’s headline news.
From $107 million in the hole to $53 million in the black – the dramatic change in City Hall’s fortunes was the result of several factors, according to Larsen.
Nine months ago, the budget office predicted a $107 million deficit.
Among them: Baltimore’s share of state income taxes was $19.4 million over estimates. And surprisingly, property tax receipts were $14 million over projections despite the city’s overall tax base declining by $250 million through tax appeals and the shrinking tax base of downtown Baltimore.
Highway user funds ran $9.5 million above projections, and investment earnings jumped up by $1.6 million due to higher interest rates and a rising stock market.
One major disappointment: revenues from DOT’s speed and red-light camera program were $3 million less than anticipated.
The supplemental funds are set to be approved and added to the 2025 budget at the City Council’s November 4 meeting.