Wednesday, January 21, 2015

Baltimore's FY16 Fiscal Cliff: The Setup (1 of 3)

Baltimore, where I've lived for most of the last 20 years, and have owned a home for the last 11 years,  has survived the recession.  That is to say Baltimore is not Detroit.  The reasons for this are legion but I believe the most three significant positive drivers are as follows:

1.  Baltimore is a city whose residents have a "grass roots" mentality that I've not seen well-portrayed in Detroit (or at least, the media fails to show it).  People in Baltimore's communities care - at a meaningful level - about Baltimore.   From Anarchist collectives to faith-based community initiatives, it's all there - and vibrant - in Baltimore.

2.  Baltimore is significantly bolstered by its proximity to Washington DC (25-35 miles, depending on which landmarks are selected for distance).  Matching federal funds and grants comprise over 8% of the City's annual budget.  

3.  Baltimore has enjoyed, for the bulk of the last 40 years, a legislature and governor that are friendly and (at various levels) committed to the success of this aging port city.   State grants, tax allocations, and other line items produce between 13-15% of Baltimore's annual budget. 

Despite these factors, Baltimore remains a very poor city with very serious problems.  Here's a look at the present - why hasn't Baltimore prospered in an era of heavy state and federal funding?

1.  Failure to grow employable or college-ready students in public schools.  Over 30% of students fail to advance to 9th grade.  Nearly 25% of those who do advance, still fail to finish their high school education by age 20.   25% of high school students, as reported recently in the Baltimore Brew, miss a month of school or more every school year.  40% of first-time 9th graders miss 20 school days or more (the historical cutoff for grade repeat or expulsion was 10 days).  The result of all of this is that the median student in Baltimore City is marginally prepared for work or higher education at the time of their high school graduation.  That's a poor standard, and despite the revolving door of school system CEOs and the influx of millions of dollars of federal and state money, improvements are limited to only a portion of metrics, and measured in single digit improvements.

2.  Ineffective Laws on Violent Crime.  On the adult crime front, serious challenges remain.  Despite the City's bloc of delegates' instrumental assistance in passing Maryland's Firearm Safety Act of 2013, which the mayor, governor, and gun control advocates promised "would save lives immediately," the law (arguably America's most restrictive) appears to have had little to no impact, as monthly and annual homicide rates since the law's effective date (October 1, 2013) have not differed statistically from those prior to the law's passage.   Indeed, the Baltimore Police are investigating 13 homicides (almost all via handgun) that have occurred in the first 17 days of January, 2015.  The last January before our new gun law saw 12 total homicides, compared to post-gun law Januaries of 2014 (27 homicides) and 2015 (likely 25 homicides).  Interestingly, and perhaps positively, Baltimore Police have reported repeatedly that the most common reason for shootings is not the narcotics trade, but "common disagreements."  There is hope that a more civil, educated, and employed/non-impoverished society can help minimize the impact of this half-century epidemic of violence.

3.  Prohibitive Tax Rates.  Economically, substantial barriers to successful urban society remain - Baltimore's property tax rate is 2.25%, over 20 times the rate established by the state of Maryland (0.11%), and two to three times the rates of surrounding suburban counties.  This is a significant and obvious disincentive to locating a business or residence within Baltimore, especially given some of the other key factors, such as quality of public education and public safety, both described above.

4.  Environmental Disasters.  The City is under increasing federal and state pressure to reduce its impact on state and federal natural resources.  You know, "air" and "water."   Like many major cities, Baltimore's geography shows that the worst water and air quality exist in the most impoverished communities.  However, the scale of such pollution is so massive that Baltimore's environmental impacts are felt across county and state lines.  Baltimore is a party in numerous legally-binding environmental cleanup programs with state and federal agencies.  In all cases, the City is irrevocably behind schedule and over-budget on these multi-million dollar projects.   Federal and state fines, and perhaps federal and state agency takeovers, loom for 2019 and beyond.   Let's point out here that this is more than a fiscal problem.  The city's residents and workers (from the poorest to the richest) deserve to live an urban habitat that's more than a living hazardous materials dump.  Yet, go to most community parks and that's exactly what you'll find.    Given the City's lack of action in the face of continuously higher legal stakes (and funding), it is not a stretch to call this a human rights issue.  If it were Mumbai or Mexico City, that's what we would call it.

Summary:  It has become clear that unfortunately, "more money" and "more laws" are not the only solution to Baltimore's problems (if only it were so). Simultaneously, some realities have been operating in the background that bear some serious consideration in the name of figuring out "what is Baltimore to do?"  My next essay on the topic will examine those, as a legislative and fiscal preview to 2015 (and FY16).


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