Baltimore finance office projects $64.4 million FY26 General Fund deficit after costly winter storm response

Deputy Finance Director Bob Sedamy told the Baltimore City Council’s Budget & Appropriations Committee that third‑quarter projections for fiscal 2026 show a $65,400,000 revenue surplus against a $129,800,000 expenditure deficit, leaving the General Fund projected to end the year with a $64,400,000 shortfall.

Sedamy attributed most of the revenue improvement to stronger income tax receipts — including a higher statewide growth assumption that rose to 7.3% in March — and a slightly larger share of statewide income tax distributions to Baltimore City (about 5.68% this year versus 5.61% last year), which he estimated added roughly $31.2 million. He also cited a $12.5 million positive variance in property tax collections tied to new assessments on recently completed buildings and changes in personal property assessments.

On the expense side, Sedamy said a historically severe winter storm and its extended cold period caused large emergency response costs, pushing transportation projections into a roughly $94.9 million deficit. Public safety overtime and arbitration outcomes added materially to deficits: the Fire Department faces about a $28.9 million shortfall (partly from a roughly 6% arbitration wage outcome) and the Police Department about a $20.9 million shortfall, where overtime outlays and higher IT contract costs were named drivers. Miscellaneous general ledger issues — including a prior‑year EMS billing invoice and printing costs posted centrally — also worsened outlays for the fiscal year.

Committee members asked whether the extra spending improved service delivery. City Administrator Faith Leeds said outcomes vary by agency, citing an improved BPD investigation closure rate and a 60% decline in homicides compared with five years ago. Leeds described targeted “tiger teams” focused on parking enforcement, traffic calming, forestry, street sweeping and other operational improvements.

Members pressed how the city will close the projected FY26 gap. Sedamy said the administration expects to use one‑time resources, including portions of the rainy‑day fund and FEMA reimbursements that had been held for capital, while also proposing to revisit snow budgeting practices — the FY27 snow line was increased by roughly $2 million but officials said they will evaluate historical activations to better set recurring budgets and carry forward savings in low‑activation years.

The administration also briefed the committee on other revenue and expenditure nuances: a projected $6.2 million gain in investment earnings (supported temporarily by ARPA residual balances), a $2.9 million improvement in net parking receipts, an expected $5.3 million shortfall in speed‑camera revenue after fewer relocations and behavioral changes, and several grant and tax‑credit adjustments. Several council members asked for follow‑up materials on specific items, including camera locations, VA‑tag impacts on camera revenue, and memoranda of understanding around school property turnover.