In passing this year’s city budget, which went into effect July 1, the Baltimore City Council had to balance a sizable deficit, despite continued growth in revenues, while also facing looming federal policy impacts on local businesses and institutions and city priorities. Before ultimately passing the budget 13-2, the City Council debated issues including immigration, the risks of losing federal grant funding and federal layoffs, taxation, agency vacancies, and energy costs. Council members also used their legislative power to shift funding sources between agencies. City revenues remain strong as key sources continue to show steady growth. The Mayor proposed additional revenue sources from fees on waste disposal and raising the per-trip fee for taxis and rideshare services. There will be some reductions in staffing at city agencies as funding for positions that are currently vacant were reduced or eliminated.
Federal Impacts
Major changes in federal employment, spending decisions, and policies have the potential to affect the city’s budget this year and for years to come.
The federal government’s tariff policy could have an inflationary effect on city expenses. Even if the city saw gains in manufacturing employment, it could be offset by higher prices for goods and services, as manufacturing accounts for only 3% of jobs in the city. Higher costs mean department budgets and funding for construction and maintenance projects won’t go as far. Tariffs could also spike material and equipment costs and slow down economic activity. Over the long term, the city may face recurring budget gaps as it adjusts to a higher-cost environment.
Baltimore City has 12,000 federal jobs. With looming cuts to federal programs, these workers are at risk of losing federal employment, which tends to have higher salaries than state, city, and private-sector jobs. City officials estimate that if 1,000 federal workers living in Baltimore City are laid off and find employment at the average private-sector wage, the city could see a reduction of approximately $672,000 in income tax revenue. This loss could increase to as much as $2.9 million if those individuals do not find new jobs or move out of the City. Other federal impacts include cutting grant funding for research institutions, universities, and healthcare providers, which have resulted in paused or eliminated economic output. The multiplier effect of federal layoffs and funding reductions has an unprecedented impact on the city and could disrupt long-term growth for both the city and the state.
Immigration
Federal immigration raids and attempts to deport millions of undocumented immigrants, particularly from Central and South America, are harming Baltimore families and communities and will also affect the region’s economy. Other recent federal actions have suddenly changed the legal status of thousands of foreign workers who did previously have work authorization. Baltimore was recognized as a national leader in promoting economic opportunity for immigrants by the American Immigration Council. In 2023, Baltimore was designated as a refugee resettlement city by the Biden Administration and began initiatives focusing on refugee resettlement such as Global Refuge. More than 80% of Maryland immigrants had legal status as of 2021, including more than half who were naturalized citizens, based on data from the Comptroller of Maryland.
Given their growing participation in the city’s economy, deporting immigrant Baltimoreans could have significant impacts at the local level. Immigrants account for 21% of Maryland’s workforce and have a 72% labor-participation rate – higher than U.S.-born residents. In Baltimore, immigrants account for 11% of the city’s workforce and have a 69% labor force participation rate. Maryland’s future depends on immigration as the U.S.-born population has been on the decline due to an aging population and decreased birth rates.
Immigrants from Central and South America are one of the largest immigrant groups contributing to the vibrancy of the city. According to data from the U.S. Census Bureau’s annual American Community Survey, the Latino population has been the only ethnic group in the city to experience consistent growth in recent years, increasing by about 20,000 people, or 79%, from 26,000 in 2010 to just over 46,000 in 2023. During that period, the city as a whole lost nearly 56,000 residents. The share of the total population identifying as Latino increased from 4.2% to 8.2% during this period. From 2010-2023, the share of immigrants living in Baltimore City rose from 43,000, or 6.9%, to 51,000, or 8.8%. These data suggest that mass deportation will have wide-ranging socio-political and economic consequences across Maryland and Baltimore.
Budget Overview
Budget Total – $4.63 billion
- Operating Budget – $3.7 billion, up 6.35%
- Capital Budget - $932 million, up 27.24%
State Aid – $226 million
- $144 million operating budget, down 6.3%
- $81 million capital budget, up 20%
Federal Aid – $281 million
- $216 operating budget, up 4.7%
- $65 million capital budget, down 29.2%
General Fund Revenue – $2.6 billion, up 11% from the prior budget year
- $2.4 billion general operating budget
- $149 million capital budget
- Excluding revenue redirected from special funds, the increase is about 8%.
Revenue Changes
- Taxicab and Transportation Network Company Excise Tax – $5.9 million in FY26, up 69% from FY25. The city will increase the per-ride charge from $0.25 to $0.38 for any trip initiated or ending in the city.
- Landfill Tipping Fee and Solid Waste Surcharge – $18 million in FY26 up 85% from FY25. This includes the proposed increase in the combined charge for the tipping fee and solid waste surcharge from $67.5 to $135 per ton.
- EMS Revenues – $78 million in FY26, covers the cost of Emergency Medical Services, previously marked as special funds, is now reflected in the General Fund with no changes to services. Additionally, there is a 20% increase to EMS fees for non-Medicaid
- Traffic Camera Fees – $3.4 million from traffic camera violations with six new cameras to be installed and 60 repurposed.
- Fines – $6.5 million from an increase on fines for waste-related activities such as littering and illegal dumping.
Revenue
Property Tax – $1.2 billion, up 4.9% from FY25
- $94.2 million in tax credits excluding the homestead credit, down 6.7% mainly due to expiring credits.
- Tax Credits % of Real property
- 8.6% excluding homestead
- 11.8% including homestead
Income Tax – $493 million, up 5.8% from FY25
- Net growth in taxable income above $30,000
- City unemployment rate up to 4.1% same as national average, higher than state average of 2.8% in calendar year 2024.
Non-education State Aid – $101 million, down 5.8% from FY25
- Reduction mainly due to reduced state funding for teacher retirement funds, which were a part of state budget cuts the General Assembly approved earlier this year.
Income Tax Disparity Grant allocation – $79.1 million
Other
- Opioid Restitution Fund - $36.7 million. This will be split between these agencies:
- Fire – $5.2 million
- EMS programs focused on reducing the number of non-emergency 911 calls.
- Health – $6 million
- Establishes the Division of Overdose Prevention within the Health Department
- Homelessness – $3 million
- Enhance services in the city’s shelters. This funding will ensure the city has adequate beds to provide shelter for men, women, and families along with additional shelter capacity during the winter.
- Office of Recovery Programs – $18 million
- Allocated to nonprofit organizations named in specific settlements.
- Funds will be allocated for substance abuse and overdose programs and services, including treatment, recovery, harm reduction and social determinants to health associated with the opioid epidemic
- Also includes supporting additional staff responsible for coordinating and overseeing grant agreements
- Law – $1 million
- For ongoing litigation regarding the impacts of the opioid epidemic in Baltimore.
- Mayor’s Office – $3.5 million
- To fund positions supporting guidance and oversight.
- Fire – $5.2 million
Capital Fund
- General funds $149 million
- Federal funds $65 million
- State funds $81 million
Agency Budget Details
Department of Health
$200 million, down 4% from prior fiscal year
- Three positions funded by grant funds now funded by general funds.
- $850,000 for B’more Healthy Babies program, leveraging 100% Medicaid match.
- Reduction in anticipated Pregnant Women With Dependent Children, Administrative Care Coordination, and Women Infants and Children Supplemental Food grant budgets by $5.17 million. The reduction is an alignment with expected grant allocations and not a loss in services or enrollment.
- Removes three vacant positions in EMS services
- Reductions in temporary administrative staff
- $14.8 million grant reduction in the Ryan White Program, which provides comprehensive treatment services to HIV-positive people.
- Allocating $7.85 million from the Opioid Restitution Fund to support the city’s opioid response within the Health Department. This funding will support 25 new positions.
Department of Housing and Community Development
- Operating Budget $88 million
- Shifting positions and funding between sub agencies
- Allocating $2.7 million to the Mayor’s Vacants Initiative to support new and mid-year positions
- Transfers six staff from Office of Zoning to Planning, shifting $600,000 in funds.
- Adding eight positions to community outreach services
- Federal Community Development Block Grant allocation will be $19 million, down 11% from the last budget year. While specific data are not available, this could mean fewer resources available for housing and community development services.
- Capital Budget $83.4 million, up 6% from prior fiscal year.
- $30.6 million for the Impact Investment Area Program which supports high-impact investments in underserved neighborhoods.
- $6.5 million for the Affordable Housing Trust Fund
- $6.0 million for Baltimore Development Corporation’s (BDC) capital budget which includes $2 million for a new small business assistance program
- $1.5 million for BDC’s Façade Improvement Grant program which supports enhancements to the exteriors of commercial and industrial buildings.
Baltimore City Public Schools
$410 million city share of school funding, up 3.3% from prior fiscal year.
- Increasing the city’s local share to city schools by $3 million.
- Increasing funding for the city’s contribution towards Baltimore City Public Schools retiree health benefits by $10.4 million.
Department of General Services
- Operating Budget $194 million, up 7.7% from prior fiscal year.
- The budget includes $37.5 million for the replacement of 226 fleet vehicles.
- Reductions in staffing and shifting staff to various other sub-agencies.
- $2.7 million in federal and special grant appropriations to support green energy projects in infrastructure.
- Federal – $1.9 million
- Special – $800,000
- Capital Budget $16.8 million, down 40% from prior fiscal year.
- $16.8 million for capital projects for City office buildings, libraries, police stations, senior and health centers, and the Convention Center.
- $8.1 million for replacing HVAC at the Southeastern and Eastern Police District stations.
Baltimore Police Department
$614 million, an increase of 3.5% from prior fiscal year
- The budget eliminates funding for some currently vacant positions while adding some additional civilian support and sworn officer positions, for a net total of 38 additional civilian positions and 69 sworn positions compared to the current budget. The overall budget for overtime pay is $40.3 million. This includes increases of $2.3 million for civilian personnel and $8.4 million for sworn personnel.
- Reducing staff vacancies and turnover to support overtime pay
- Creating nine new civilian positions that will allow 15 positions to return to patrol functions and reduce overtime costs
- $19.6 million in State Aid for Police Protection to support both phases of the professionalization and recruitment efforts in the department
- $11.4 million in State Crime Reduction Block Grant Continuation to fund 69 sworn positions to assist public safety efforts through community patrols and targeted violence initiatives
Baltimore Fire Department
$362 million, up 10% from prior fiscal year
- Net increase of seven fire suppression and emergency rescue personnel
- An increase of $3.2 million in federal and state grant appropriations
- Transferring all costs for the service from a Special Fund to the General Fund
- Eliminating the EMS Special Fund and transferring all EMS costs to the General Fund.
- $165,000 for EMS training recertification materials, equipment, and other costs
- $3.3 million increase to purchase fire equipment and apparatus for fire facilities maintenance and replacement.
- $5.2 million for EMS services among others from the Opioid Restitution Fund
- Allocating $500,000 to create additional positions within Fire Code Enforcement
Transportation
- Operating Budget $236 million, up 6% from prior fiscal year.
- $983,000 in increased fleet costs
- $5.9 million in grant funding to support the Circulator Bus service
- $2.8 million in federal funding for bus replacement
- $2.5 million state grant funding for Circulator operations
- $360,000 for grant funding to support electric vehicle purchases
- Reduces seven staff positions
- $5.4 million for the I-83 speed camera program for the cost of operating the program and capital investments for I-83
- Capital Budget $164.5 million, down 6% from prior fiscal year
- $94 million in Highway User Funds, which come from state taxes on gas, titling, and other fees on motor vehicles
- $38.5 million for street resurfacing
- $12.6 million for sidewalk reconstruction and repair
- $94 million in Highway User Funds, which come from state taxes on gas, titling, and other fees on motor vehicles
Public Works
- Operating Budget $773 million, up 65% from prior fiscal year
- $11.3 million increase is due to projected increases in staff costs in Water Management
- Transferred 27 positions from across subagencies to Administrative-Water/Wastewater and five positions to Administrative-DPW
- $5.1 million, or 17% increase to contractual services supporting the City’s water billing customer information system
- An increase of $10.3 million, or 6%, in the Wastewater Management services, mainly due to supplies
- An increase of $5.2 million, or 21%, to Surface Water Management, including increased spending for contractual services and increased debt service payments
- Public Works – Capital Budget $562 million, up 42% from prior fiscal year.
- $533.7 million for ongoing improvements to the Water, Wastewater, and Stormwater utility systems.
- GO Bonds – $29 million
- Revenue Bonds – $328.5 million
- $21 million for renovations for the future Eastside Transfer Compost Facility
- $3 million to expand the Quarantine Road Landfill
- $20 million for the Middle Branch Resiliency Initiative
- $533.7 million for ongoing improvements to the Water, Wastewater, and Stormwater utility systems.
Recreation and Parks
- Operating Budget $79 million, up 5% from prior fiscal year
- $2.6 million for operating costs for three recreation centers that will reopen this fiscal year following major renovation – Chick Webb, Parkview, and Gardenville – creating 15 new positions total
- $2.2 million from the Community Development Block Grant for the renovation of Dawson Center, an after-school youth center, among other STEM and summer programs
- Overall budget for special facilities management reduced by $1.3 million
- $7.3 million for a new sub-agency established for facility maintenance of Rec and Park buildings and pools providing safe public access to Recreation and Park facilities. Funds transferred were from park maintenance as well as funded by grants and support 28 positions
- Continuing state funding of $10 million from Program Open Space, with $7 million dedicated to operating expenses and $3 million to support ongoing capital projects
- Capital Budget $30.3 million, up 59% from prior fiscal year
- $12.6 million in funds going to
- $5.0 million for City Springs Park
- $3.6 million for CC Jackson Park expansion
- $3.1 million for improvements to Clifton Park
- $0.9 million for design of Lillian Jones Recreation Center improvements
- $12.6 million in funds going to
Glossary of Budget Terms
AGENCY: An organization authorized by the Mayor and City Council to operate in the best interest of the public. Each agency is obligated by the City Charter to submit a budget request outlining projected costs of operation for the upcoming fiscal year to the Director of Finance and/or Planning Commission, as applicable.
APPROPRIATION: The legislative authority to spend and obligate a specified amount from a designated fund account for a specific purpose
CAPITAL BUDGET: The appropriations for capital projects, which comprise the first year of the Capital Improvement Program. The Capital Improvement Program is a longer-term plan spanning multiple years for scheduling repairs, renovations, or new construction of public facilities.
FISCAL YEAR: The time frame to which the annual budget applies. The city’s fiscal year is July 1 through June 30.
FUND: A sum of money segregated for specific activities. Use of this money requires adherence to special regulations established for each type of fund. The funds identified within Baltimore City’s budget are the Capital Fund, Conduit Enterprise Fund, Convention Center Bond Fund, General Fund, Internal Service Fund, Parking Enterprise Fund, Parking Management Fund, Special Grant Fund, Special Revenue Fund, Stormwater Utility Fund, Water Utility Fund, and Wastewater Utility Fund.
GENERAL FUND: A central fund into which most of the city’s tax and unrestricted revenues are budgeted to support basic city operations and pay-as-you-go (PAYGO) capital projects.
OPERATING BUDGET: A plan, approved by the Mayor and City Council, for appropriating funds to agencies to support their day-to-day activities and services of city government.
OVERTIME: Payments to employees eligible for additional compensation for services rendered after a regularly scheduled work period subject to negotiated labor contracts and the federal Fair Labor Standards Act.
REVENUE: Income generated by taxes, fines, penalties, notes, bonds, investment income, property rental, user charges, federal grants, State grants, private grants, county grants, and miscellaneous services.
SPECIAL FUNDS: Established to budget for revenues derived from certain State, federal, and private governmental grants, as well as other revenue sources that are restricted to expenditures for specific purposes.
TAX CREDIT: An incentive that lets taxpayers subtract an amount from their owed tax based on specific qualifications.
WASTEWATER UTILITY FUND: Established to budget for the operating and capital expenses of the City’s sewage facilities.
WATER UTILITY FUND: Established to budget for the operating and capital expenses of the City’s water supply system.