Skip to main content

Frank DeFilippo: Baltimore’s Road to Insolvency

It’s an iron law of governance: Government can never do enough in an area where it previously did nothing.

The obvious begins and ends with the city of Baltimore. Herewith is a brief history of the city’s road to insolvency that the resident new generations may not know.

Back in the mid-19th century, Baltimore’s oligarchs got the bright idea that the city was too wealthy and independent to support the largely rural counties around it, so they decided to withdraw from Baltimore County and go it alone.

Baltimore is now only one of two major cities in the nation that are not contained within a county. The other is St. Louis. You can bet the good burghers in Baltimore County are delighted today.

Fast forward: In the early 1970s, Baltimore was strapped for cash, barely able to pay its bills and unable to support its many assets. Mayor William Donald Schaefer made a devil’s deal with Gov. Marvin Mandel, both Baltimore Democrats, with the help of the city’s lobbyist and human abacus, the esteemed Janet Hoffman.

The city began unloading its possessions. The first asset the city sold off to the state was then known as City Hospitals for the Indigent, the sprawling complex in East Baltimore that, through a couple of later transactions the state unloaded, is now the Johns Hopkins Hospital Bayview Campus and the anchor to that end of town.

At around the same time, the state was about to launch the nation’s first (and still only) unified transportation system under the proposed Maryland Department of Transportation. To fill out a couple of gaps in the master plan, the state needed Friendship Airport and the Baltimore Transit System, both owned by the city.

Schaefer grumped and groused that the city of Baltimore was surrendering its manhood by shedding its assets, a refrain he would repeat throughout his gig as mayor until he greenlighted Harbor Place, a glorified yogurt stand that he could point to with pride. Schaefer’s great skill was his ability to deflect the eye of the beholder from the bad to the bold.

Nonetheless, Mandel persuaded Schaefer to give up the city’s bus system for $25 million in cash. Friendship Airport was more difficult. But Schaefer was persuaded that the city lacked the resources to usher in the era of jumbo jets and increased air travel. Friendship needed longer runways, more and bigger terminals and parking galore to compete regionally with Dulles and Reagan National airports in the nation’s capital.

The state got Friendship, rechristened it Baltimore-Washington International Airport, later added the name of Thurgood Marshall, and the noisy airdrome off the Baltimore-Washington Parkway is now the leading airport in the region and among the fastest growing in the nation, due mainly to its competitive landing fees.

But Mandel, in a sense, replenished what he took from the city. To re-pot the vacancies, he built for Schaefer the World Trade Center, the Convention Center and to ferry outlanders to the newly gentrified downtown area, the Baltimore Metro System. Without those building blocks, Harbor Place might not have been possible (Schaefer was originally opposed to Harbor Place).

Mandel’s handouts to the city are the gifts that keep on giving. The School Construction Program was originally conceived as a way to relieve pressure on the local property tax, and not as a permanent state growth program to relieve local governments of the responsibility for schools.

Frank A. DeFilippo

School construction funding has become an annual competitive beg-a-thon among local governments. It developed when Mandel and his numbers-crunchers were unable to figure a way to equalize the property tax. At the time, Calvert Cliffs was in development which virtually wiped out property taxes in Calvert County.

It was unfair, the thinking went, that a single county should get sole financial benefit of such a massive project. From that failure the School Construction Program was born and today is a major financial prop to local subdivisions.

Gov. Larry Hogan (R) has commandeered $400 billion from the “lockbox” casino proceeds for school construction, raising questions of whether bricks-and-mortar were Democratic legislators’ intended use when they proposed earmarking casino funds for education.

When Schaefer became governor, among his first acts was to win passage of a budget amendment that allows Baltimore City to shift money from its share of state gasoline taxes – which are designated solely for road and highway maintenance – to help balance its general fund budget.

And along the way, the state has assumed financial responsibility for the Baltimore Zoo, the city’s prison system and through the Maryland Stadium Authority, management of downtown’s twin ball yards.

Schaefer also added Baltimore’s light rail system which connects most of the city’s Tinker Toy attractions along its tracks from Hunt Valley to Thurgood Marshall-BWI Airport.

Comes now Mayor Catherine Pugh, tambourine in hand and full of tough talk, trying to save one of Baltimore’s few remaining, but fading, attractions ­– Pimlico Race Course. And right behind her, attempting to salvage another, even more compelling, institution is the Baltimore Symphony.

It is important to note here that the city has no actual claim on Pimlico and its birthright, the Preakness, other than sentiment. Nor does the state have an interest in the symphony other than to preserve a touch of culture in the impoverished city.

Pugh is beckoning Pimlico’s owners to the table to negotiate. Trouble is, the city doesn’t control the deal, nor does it have anything to negotiate with. It doesn’t own the track, it doesn’t own the Preakness and it certainly doesn’t have the estimated $424 million to replace the track, as has been proposed.

The owners of Pimlico, which races 10 days a year, are plunking their resources into Laurel, which races 60 days a year, where they are considering moving the Preakness after 2020.

But there are studies, and there are studies. The latest, an in-house study by the Baltimore Development Corp., concludes the economic spinoff from the Preakness to the city amounts to more than $50 million.

By contrast, symphony musicians are playing without a contract. Its supporters are asking $3.2 million from the state to help stabilize the symphony’s finances and keep the ensemble intact. The state already contributes to various cultural activities through the Maryland Arts Council.

“I am certain that after the dust of centuries has passed over our cities, we, too, will be remembered not for victories or defeats in battle or in politics, but for our contribution to the human spirit.” Those are the words of President John F. Kennedy.

Any way you cut it, Baltimore City has become a ward of the state.


Our stories may be republished online or in print under Creative Commons license CC BY-NC-ND 4.0. We ask that you edit only for style or to shorten, provide proper attribution and link to our website. Please see our republishing guidelines for use of photos and graphics.

If you have any questions, please email editor Danielle Gaines at [email protected].

To republish, copy the following text and paste it into your HTML editor.


Creative Commons License AttributionCreative Commons Attribution
Frank DeFilippo: Baltimore’s Road to Insolvency