Operating vs. Capital Budgets

The City of Baltimore's budget is divided into two separate budgets: 

  • Operating Budget, managed by the Department of Finance, funds programs, services, staff, and supplies. 
  • Capital Budget, managed by the Department of Planning, funds physical infrastructure projects such as building new community centers, roads, and water system infrastructure. Learn more about the capital budget through DOP. 

 

Two swimmers hanging on the edge of a pool with swim caps, googles, and kickboards. A staff member sitting at the edge of the pool talking with them.
Picture of Rita Church recreation center, in the image you can see the side of the building and a pool behind a fence.
Operating funds are for the staff and equipment for the pool.
Capital funds are to build the pool and recreation center.
City Revenue Sources 

The operating budget has three main sources of funding, General Funds, Grant Funds, and Enterprise Funds. More details on the City's revenue sources can be found in the Preliminary Budget and Executive Summary budget publications.

General Funds are the City's largest source of funding, representing approximately 65% of annual operating revenue. Revenue sources for the General Fund include local taxes paid by residents, businesses, and visitors. Specific taxes include property tax, income tax, recordation and transfer tax, and hotel and parking taxes. The General Fund also includes certain direct aid from the State based on funding formulas defined by the legislature and other sources of funds managed by the State. Local policy makers have the most flexibility over how these funds are spent.

Grant Funds are received from the federal and State governments, as well as private grantors. These funds represent approximately 17% to 18% of annual operating revenue. Grant Funds are legally required to support specific programs and initiatives and cannot be used for other purpose.

Enterprise Funds, which represent approximately 18% of the City's operating revenue, are collected through user charges for City services. Water, wastewater, and stormwater fees are examples of user charges that get projected as Enterprise Funds within the budget. Enterprise Funds are self-sustaining, meaning that fees received from users go directly back into supporting service delivery.

City Expenditures

Baltimore City began the process of Outcome Budgeting with the Fiscal 2011 budget. This process focuses on funding programs and services that deliver the best results for City Priority Outcomes defined by the Mayor. Throughout the years the specific steps of the process have changed, but the City continues to focus on how the work of agencies will drive change in Priority Outcome areas. The current Priority Outcomes for the City are: 

  • Enhancing Public Safety
  • Prioritizing Youth, Older Adults, and Vulnerable Populations
  • Clean, Healthy, and Sustainable Communities
  • Equitable Economic Development
  • Responsible Stewardship of City Resources
  • Modernizing Public Infrastructure

More information about Outcome Budgeting and funding by Priority Outcome and agency can be found in the budget publications.

Operating Budget Process

The planning process for Baltimore’s budget begins in August. The major milestones in the operating budget process are described below.

1. Current Level of Service (CLS) | August to October

The budget planning process starts with projections to determine the cost of providing the same level of service in the upcoming year. This projection serves as the baseline for the preliminary budget and assumes that the City will maintain the same level of services, but adds necessary costs, such as extraordinary inflation, or removes prior year one-time costs, such as a new software or study. The CLS budget also includes changes across agencies, such as cost of living adjustments for salaries, negotiated pay increases, or changes in health benefit costs. Based on CLS, BBMR assesses whether the City expects to be operating with a surplus or deficit, which informs strategic planning and guidance for agencies in developing budget proposals.

2. Agency Budget Proposals | November to December

Following the CLS analysis, the Mayor issues budget guidance for City agencies and offices. This guidance is used by agencies to prepare proposals summarizing their performance goals, service level priorities, and funding plans to achieve these goals. 

3. Operating Budget Recommendations | January to March

Budget proposals are submitted to BBMR for review and preliminary recommendations. Proposals are evaluated through a set of criteria.

4. Preliminary Budget | April

The Mayor utilizes recommendations from BBMR to develop a balanced budget reflecting the Administration's priorities. The Preliminary Budget summarizes major revenues and lays out the proposed spending plan for the upcoming year. The Preliminary Budget is introduced to the Board of Estimates (BOE) for consideration.

5. Board of Estimates Review | May

The BOE holds a series of hearings with agencies and residents to understand the recommendations outlined in the Preliminary Budget. Residents offer feedback through their testimony during the annual Taxpayers' Night. The Mayor has the opportunity to propose modifications to the Preliminary Budget based on feedback received during this stage. The BOE compiles its recommendations into the Ordinance of Estimates that is referred to the City Council for consideration.

6. City Council Review and Approval | June

Following the introduction of the Ordinance of Estimates, the City Council holds agency hearings and a second Taxpayers' Night. Fiscal 2024 was the first time in 125 years the City Council had the opportunity to amend the budget through transfers across City services with General Fund appropriations. This change was the result of a charter amendment passed by voters in 2020.

7. Budget Goes into-effect | July

Upon Council enactment and the Mayor's signing, the new budget is in-effect on July 1st. 

Outcome Budgeting

In Fiscal 2011, Baltimore implemented Outcome Budgeting. The process required agencies to make service‐level budget proposals that justify investments in strategies geared towards achieving citywide outcomes and goals. Although the process has evolved significantly over the past decade, the underlying principle remains the same: to not only keep Baltimore’s budget sustainably balanced, but also to get the best use of City resources by devoting resources to services that achieve the best results for our residents.

Strategic planning for the budget process is centered on a set of Pillars, which are broadly defined goals for the City. Although these have been modified and adjusted to reflect the priorities of each Mayoral administration, similar themes are common. 

The  Fiscal 2027 budget was built around Mayor Scott’s six citywide Pillars: 

  1. Prioritizing Youth, Older Adults, and Vulnerable Communities
  2. Enhancing Public Safety
  3. Clean, Healthy, and Sustainable Communities
  4. Equitable Economic Development
  5. Responsible Stewardship of City Resources
  6. Modernizing Public Infrastructure.

Budget Process

The budget process operates in a cycle that repeats each year: First, develop a strategic plan; next, budget resources in a manner informed by the strategic plan; and finally, track performance against the plan. A more detailed description of the budget process is provided below.

Budget Process Cycle

Baltimore’s Outcome Budgeting system became a national best practice and serves as a model for local governments across the country.  In Baltimore, Outcome Budgeting led to innovative service delivery mechanisms and a cultural shift within agencies. Greater use of data and evidence during the budget process has improved outcomes for residents in many of the City's priority policy areas.  Read the Results for America Case Study: Outcome-Based Budgeting in Baltimore.

Other Ways to Explore the Budget

In addition to downloading the budget data below, you can also engage with the budget by: