Friday, February 6, 2015

Baltimore's 2015 Fiscal Cliff - The Aftermath (Part 3 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" positive mentality and culture. 
2.  Baltimore is significantly bolstered by its proximity to Washington DC.
3.  Baltimore has enjoyed, for the bulk of the last 40 years, a friendly legislature and governor.

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. 
2.  Ineffective Laws on Violent Crime. 
3.  Prohibitive Tax Rates. 
4.  Environmental Disasters.

It's 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?"

1.  State fiscal shortfalls.
2.  State's loss of political interest in the City. 
3.  State investment fiscal cost/benefit for City programs/grants.  
4.  First City agency audits in history. 
5.  Environmental Compliance deadlines. 

In summary, the fiscal outlook for Baltimore's 2015 (FY16-FY17) looks bleak if not disastrous, leading to a break in political strength away from the City's historic core of political power.  What does that mean?

In late 2015, several things will happen rather haphazardly.

First, the FY2014 audits for three of the City's largest agencies will be completed, with findings handed down and recommendations made.   Allegations of criminal activity will be made against agency fiscal managers.  City oversight via the Mayor's office and City Council will be put on its heels, causing budgets to be frozen and criminal investigations started.  City programs and projects will grind to a halt very quickly.   Calls for independent investigations by supporting state agencies will be obfuscated, then eventually heeded.   State supporting funds will be vastly reduced for these agencies by late 2016 - when the next round of audits (including Public Works) will be finalized and findings announced.

Also in late 2015, a final report is expected from the US State Department about potential criminal activities (vis a vis police brutality) by the Baltimore Police.   Lawsuits against the Department will likely result, costing taxpayers millions of dollars and an unhappy police union.   Expect crime to increase.

On July 1, 2015, the City's FY16 budget year will begin.  That's the budget intended to deal with about 40% of the last governor's $1.2 billion deficit.  City funding will plummet, as will capital projects.  Road work, sewer work, and school projects will slow to a crawl.  The FY17 and FY18 state budgets will not restore funding to the City.  Major road, transit, and water projects intended to start in 2015 and 2016 for 2017-2019 construction will never begin.

And in December 2016, US EPA will expect another 2-year report on Baltimore's compliance with their TMDL goals.  Baltimore is likely to fail every single reporting metric, prompting fines from US EPA against the economically decimated City.

By 2020, it is quite possible that independent investigators or state and federal agencies, or some combination of the three, will be managing compliance of Baltimore's major civic services with state and federal laws - police, education, environment, parks, and public works.   The city's power core (a relatively elite group of Democrats with heavy ties to real estate developers) are likely to be removed from power - although the real estate developers will make out just fine (and will decide who among Democrats will comprise the new power group in city politics).    City services (to the average citizen) will be largely non-existent, and daily life in the City will become more and more like a giant anarchy (hopefully a peaceful one) surrounded by a bubble of humongous and well-meaning but ineffective government.

So I guess that's my final word.  Love your neighbors, because they've always had and will always have more influence on your life in Baltimore than the City government does.   Learn how to grow food, and how to filter water, because while a total apocalypse is unlikely, losing power and water for days at a time is business as usual around here (in 2012 we lost power for a total of 21 days).  This won't get any better with time and the projected lack of money.    Learn how to teach your kids, because the public schools may not be the safe haven for kids' learning they should be, and private schools will again be out of reach for most, once the surrounding counties' economies improve (as they have been).    Good luck out there!

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