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Taking note . . .

Observations about public affairs in the nation's capital

by the editor of The Common Denominator

TAX AND SPEND: Mayor Tony Williams and the current D.C. Council have reaped glowing accolades in the news media during the past four years for their cooperative spirit in crafting balanced budgets to rid the city of its congressionally created financial control board, but history may not be so kind in evaluating their financial management skills.

In fact, management reform remains an elusive goal for the District's bloated government - despite being a main part of the control board's charge from Congress. In good economic times, when unanticipated extra money flows into government coffers, there's little incentive for politicians to bite the bullet. Some former control board staffers even acknowledge that the city's speedy recover from insolvency in the mid-'90s had more to do with the country's general economic prosperity than with any actions taken by the city's independent chief financial officer, the control board or elected officials.

Then the terrorists struck. Tourism, a mainstay of the District's economy, hit the skids. With the onset of U.S. military action in Iraq and Code Orange security alerts restricting access to some major tourist attractions in the nation's capital, local government tax revenue is suffering.

So how have the mayor and the council responded? With the city's legendary financial acumen, of course - by increasing local spending.

Councilman Jack Evans, who chairs the council's Committee on Finance and Revenue, recently acknowledged his own complicity in voting last June to approve a fiscal 2003 budget that was more than $400,000 out of balance and has needed to be cut twice. Evans, whose schooling in economic matters makes the mayor's much-touted credentials pale, cautioned his council colleagues during an April 1 budget-cutting session against making the same mistake again.

Councilman David Catania was even less diplomatic in his remarks, laying much of the blame for the city's current budget problems directly at the mayor's feet. Catania noted that spending of locally generated D.C. funds has increased by about 30 percent on Mayor Williams' watch.

CFO Natwar Gandhi's office confirmed for The Common Denominator that the city's local budget has soared from $2.8 billion budgeted in fiscal 1998 to $3.8 billion proposed by the mayor for fiscal 2004. At the same time, the federal government assumed responsibility for the city's unfunded pension liability, its judicial system and many inmate-related expenses that formerly were borne by the D.C. Department of Corrections. The city also closed down its only publicly funded hospital.

As D.C. residents watch taxes, fees and penalties soar, they might also wonder what happened to all of those multimillion dollar surpluses at the end of each of the control board years.

Copyright 2003, The Common Denominator