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Baltimore finance officials outline FY27 revenue forecast, warn of ‘HUR’ cliff
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Summary
Finance officials told the Budget & Appropriations Committee that property taxes remain the largest revenue source and that reassessments will drive an estimated $73.9 million increase for FY27; they warned a potential $80 million drop in HUR funding in FY28 if state actions are not taken.
The Baltimore City Budget & Appropriations Committee heard preliminary FY27 revenue estimates on April 14 as officials described steady residential assessment growth and persistent commercial weakness.
Pedro Ponti, assistant board director in the Department of Finance, said reassessments will produce roughly $73.9 million in additional property-tax revenue compared with FY26 and that property tax remains the single largest component of the general fund (about 46.1 percent). "We are not changing the real property tax rate," Ponti said, noting the overall rate remains 2.248 and the owner-occupied rate remains 2.048.
Ponti said the city’s overall assessment growth for the triennial cycle is about 10.5 percent, driven by strong residential gains (he cited Canton and other neighborhoods) while commercial assessments lag and have declined in downtown and the Inner Harbor. He told the committee the commercial side has seen larger declines over the last five years, with downtown and Inner Harbor recording the steepest drops.
Officials also flagged several revenue risks. Ponti said hybrid-user revenues (a component that includes corporate income elements) are projected to fall by $5.5 million in FY27 and said traffic-camera proceeds are expected to decline by about $4.5 million as driver behavior and timing of relocations change. "The driver of relocation is safety," Ponti said, adding that revenue projections were developed conservatively.
City Administrator Faith Leeds, describing the administration’s approach, said speed-camera placement is driven by speed testing and accident data rather than revenue potential. "There are rounds of testing that happen, and we are using data to drive where we decide to place those cameras," Leeds said.
On the long-term revenue outlook, committee members pressed officials about the fate of HUR (the temporary state allocation that has supported local capital projects). Ponti estimated the city could face roughly an $80 million drop in FY28 if the state does not extend the HUR increase. Isaiah Griffith of the mayor’s office said he would follow up with legislative staff in Annapolis; Leeds said the city is building a regional coalition of jurisdictions to press for a solution.
The presentation also covered the rainy-day fund, which finance staff said is nearly $2.2 billion (about 7.9 percent of the next year’s operating budget) and includes a planned $2 million FY27 contribution to maintain the city’s target balance. Officials said some ARPA-funded pilots (group violence reduction strategy, scaled Clean Core, and digital equity) are recommended to continue into FY27 at a combined amount officials estimated to be under $10 million, subject to fiscal constraints.
Why it matters: reassessment-driven residential growth has been sustaining near-term revenue, but commercial softness and the potential expiration of state HUR support present risks to planned capital investments and the city’s multiyear fiscal plan. Officials said conservative assumptions are intentionally built into the FY27 draft and that more detailed third-quarter projections will be provided to the council.
The committee moved from the revenue briefing to a separate hearing on a payment-plan bill later in the session.
