Tuesday, May 9, 2017

An X-Ray of Baltimore

The annual Department of Legislative Services fiscal and demographic overview of the state of affairs of Maryland's 23 counties, Baltimore City, 156 municipalities and 167 special taxing districts is a great context to assess Baltimore in context. Some of the numbers of the 162 page document date back to 2015, and even 2014, but they are still telling, especially if one adds some Baltimore City data from the Board of Estimates prepared for the budget debates just beginning now in the City Council.

On demographics and race: 
Distribution of sources all local governments 


Baltimore City is the fourth most populous place in the State after Montgomery, Prince George's and Baltimore Counties. It is, however, the by far densest place with 7,686 people per square mile.

Maryland has more than twice as many African American residents than the US (29.4% versus 12.4%) but only half as many Hispanic/Latino residents (9.5% versus 17.6%). The State grew from 2000-2015 by 13.4% with seven counties garnering more than 20% growth (Charles County and St Mary's are the growth leaders with 28.8% and 28% respectively.

Only Allegany County and Baltimore City lost population (-3.3% and -4.5%), Charles and Howard had the largest increase in minority population shares indicating that minorities are no longer first settling in Baltimore City or precluded from moving to opportunity regions. Seven counties more than doubled their 2000 minority population by 2015. Baltimore City added 170% Latino population and lost 13.6% white and 7.7% black population. Prince George's has the highest percentage of minority populations with 86.1%, Baltimore City is second with 71.7%, Baltimore County has 41.2%.

Jobs and income

Unemployment in Baltimore City is high (6.5% in 2016) but lower than Somerset (7.0%) and Worcester Counties (8.7%), Baltimore City's median household income is only 56.7% of the State's median, but Allegany's income is still lower at 54.4%. Baltimore City is a job center, with the highest number of jobs per 1000 residents of all jurisdictions in Maryland followed by Howard County.
Maryland counties
Size of expenditures

Overall local government spent $29.9 billion (in FY 2014) with Montgomery County having the largest expense budget ($6.4 billion) followed by Prince George's County ($4.4 billion) and then Baltimore City ($3.7 billion), $391 million more than Baltimore County which has a larger population.

Property tax rate

In spite of its astronomical property tax rate (only the town of Mt Rainier is anywhere close) Baltimore City generates only 20.5% of its revenue from property taxes (Baltimore County 27.3%), even the per capita property tax rate of $1,225 is lower than Howard, Montgomery, Calvert, Garret, Kent or Queen Anne's and sits on rank #9 statewide. Worcester County tops the list with a whopping $2,274 per head. Baltimore City and County also have a fairly stringent assessment cap (4%) while Montgomery, Calvert and Somerset Counties allow 10% increases.
The City receives more State grants than any other jurisdiction. In the 2015 report the City had received 11.8% of the overall revenue from federal grants and 36.6% from State grants, less than in Allegany, Somerset, Dorchester, Washington or Wicomico. Caroline County then had the highest share in State grants with 51.3%. State tax calculated per capita puts Baltimore City on rank #19, behind Prince George's on #16, Baltimore County on #6 and Howard on #4 and Montgomery on #3.
State and local school funding

Where does the money go?

Statewide, almost half of all local government spending went to public schools ($13.7 billion) by far the largest expense category with public safety ($3.7 billion) not even close. Statewide Baltimore City sits on rank 16 in terms of education expenses and on #1 for public safety.
In the current discussion about safety and police Baltimore City it is interesting to see that the City spends with 17.1% more of its budget on public safety than any other jurisdiction and tops the list also with a per capita expenditure on safety of $1,000 with no other jurisdiction coming even close to that. (Howard is second with $667).

Baltimore City has also one of the most expensive governments overall (7.3% of the expenditures) with Baltimore County being almost half with 3.9%. King of government cost is Somerset with 8%. The City spends twice as much on health and social services than the County (4.9% ) With 2.2% Baltimore County spends the lowest amount in this category in
City shift in budget priorities (Source)
the entire State. By contrast, in Baltimore City education expenditures are with 40.7% lower than in Howard County (58.4%), Montgomery County (50.5%) and incredibly lower than in Washington County (70.6%). The City's expenditure on education is also lower than Baltimore County's with 52.5% .
City Capital budget sources and expenditures FY 2018 (Source)


Fiscal health 

Contrary to what some may believe, the City has fair fiscal outlook. The assesseable base increased 7% between fiscal 16 and 17, the highest increase in the State, possibly a recovery from dramatic losses in 2012 and 2013. The absolute value of the assesseable base is only  half of the of the County and about a fifth of Montgomery County's base, ratios that are also reflected in the taxable income base.

The City is not crushed by debt. Debt service accounts only for 3.4% of the expenses compared to Howard's 6.5%, Montgomery's 5.5% and debt leader Somerset with 11%.
However, the debt expressed as % of the assessable base is with 9.6% highest in the State. (County: 3.9%) and also the highest per capita.

This could provide for an interesting discussion on austerity versus prosperity and the ability to cut property taxes to attract more residents.

The City's own charts show that the City forgoes about $33 million annually thanks for tax credits including the Homestead tax credit. A separate chart also shows that within a growing total, income generated from the higher income brackets increases whereas that from lower tax brackets decreases

Klaus Philipsen, FAIA



Income distribution 2005-2015: More money from top earners, less form lower incomes 


Baltimore City Gross and Net tax revenues: Steady increase of net revenues (source)