BALTIMORE (WJZ)— Mayor Stephanie Rawlings-Blake hits highs and lows in her State of the City address.

Political reporter Pat Warren addressed Baltimore’s City Council Monday.

Cutting costs, lowering property taxes and finding new ways for the city to do business. The mayor provided a broad outline of ways to improve the state of the city.

Mayor Rawlings-Blake got an enthusiastic greeting but her State of the City message had some potentially grim prospects for the city.

“The simple arithmetic of declining revenues and increasing expenses and our denial of it have been the enemy of progress,” said Mayor Rawlings-Blake.

There are dire predictions in a report released last week that Baltimore could face a shortfall of nearly $2 billion over the next 10 years. The city has had to handle a fiscal crisis aggravated by a weak economy, a disintegrating infrastructure and employee pension and health care costs.

Monday, she promised bold new initiatives to fill the gaps.

“We must make our government smaller and more efficient. We need to invest in technology and automation, streamline workflow and break down the silos of bureaucracy to improve productivity and save our taxpayers’ dollars,” she said.

Mayor Rawlings-Blake’s budget plans fall into the categories of eliminating the deficit, modern investments and re-working the tax structure.

“I will not allow the structural deficit to be balanced solely on the backs of Baltimore City residents and employees. Not on my watch. Tourists, commuters, tax-exempt entities and private developers will be a part of the long-term solution,” she said.

The report issued last week by Public Financial Management cites employee pension and health care costs as a critical budget factor.

“Baltimore’s pension system for civilian workers is the only large system in Maryland that doesn’t require an employee contribution. That must change,” she said.

The mayor is also promoting trash removal user fees.

Mayor Rawlings-Blake told council members that she has never been one to sugarcoat things.

Click here to read the full transcript of the mayor’s State of the City Address.