Baltimore projects $8.2 million general‑fund shortfall as revenues, costs shift in third quarter

Baltimore’s budget director told the City Council Budget and Appropriations Committee that the city still faces a projected $8.2 million general‑fund deficit for fiscal 2025 after third‑quarter updates through March 31.

The information matters because the gap persists despite an improved revenue outlook: the finance team reported a $37.1 million revenue surplus driven by higher personal property, transfer and recordation taxes, and more highway user disbursements, while expenditures grew because of public‑safety overtime, recently ratified contracts for sworn personnel and winter‑storm response costs.

City Budget Director Laura Larson said the city’s third‑quarter picture is “essentially very consistent with what we were projecting at the second quarter.” She told the committee revenues improved by about $14.5 million versus the second‑quarter projection, but on the spending side the deficit widened by roughly $14.4 million, leaving net progress negligible.

Larson highlighted specific revenue and cost drivers. On the revenue side she cited a projected income‑tax surplus of about $15.1 million despite a $4.5 million downward revision from the previous quarter tied to revised state growth assumptions. Transfer and recordation receipts were projected to produce a $9.7 million surplus, with higher average sale prices supporting the gain. Personal‑property tax assessments filed by businesses contributed to a $5.1 million surplus in the property‑tax category.

On the expenditure side, Larson said roughly $16 million was spent on snow and ice removal in the winter months. She also attributed significant increases in sworn overtime and contract costs to the police and fire deficits: the fire department was projected to have a $39.9 million deficit and the police a $41.7 million deficit, the latter including roughly $16 million tied to a newly ratified FOP contract that took effect Jan. 1. Other agency shortfalls included transportation ($7.3 million, driven by snow response) and the convention complex (about $4.4 million, largely reimbursement obligations to an arena operator).

Committee members asked follow‑up questions about expenditure freezes and hiring. Larson said guidance from the city administrator instituting additional review of personnel and nonpersonnel spending — including deactivating many P‑cards and extra approvals for unbudgeted contractual staffing or reclassifications — remains in effect; she told the committee there is not a blanket hiring freeze for funded positions but that unbudgeted personnel actions are paused.

Larson and Council Vice President Sharon Green Middleton also discussed vacancies citywide and in particular stubborn sworn vacancies for police and EMS. Larson said citywide vacancies were down from about 1,900 to 1,459 compared with the prior year and that almost 70% of vacancies have been open for less than 18 months, but she acknowledged paramedic vacancy rates remain near 50%.

The committee did not vote on budget policy at the hearing. Members requested additional vacancy breakdowns and the budget office indicated it would provide the requested data ahead of a follow‑up hearing.