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Spending gap delays budget
Mayor considers service cuts, higher fees and taxes
(Published March 22, 2004)

By KATHRYN SINZINGER
Staff Writer

A wide range of increased government fees and fines, as well as specifically targeted tax increases and a new "health care provider tax," are among options that Mayor Anthony A. Williams has proposed to help forge a balanced budget for the District in fiscal 2005.

The options to increase the D.C. government’s revenue, totaling about $102 million, are contained in draft documents the mayor presented to the D.C. City Council behind closed doors last week to support his request that the council extend a statutory March 22 deadline for the mayor to submit his proposed city budget for the next fiscal year.

"He said he couldn’t have the budget ready [by the deadline]," said Councilwoman Carol Schwartz, R-At Large, who supported the council’s unanimous voice vote March 17 to give the mayor until March 29 to submit his budget.

The Common Denominator reported on its Web site (www.thecommondenominator.com) March 15 that the Williams administration has been struggling to close a $250 million spending gap in next year’s budget. The new budget documents presented to the council last week, which are circulating among many advocacy groups that closely watch the D.C. budgeting process, show a "revised gap" of $281.5 million in the draft budget.

Among the $31.7 million of "adjustments" that apparently had not been included in the earlier $250 million budget gap: $3 million to provide operating funds for a new youth detention facility under construction on Mount Olivet Road NE, $2.3 million to fund "summer programming and employment for youth," $2.2 million to give pay raises to non-union D.C. government workers and $3 million "to fully fund HCSN [Health Care Safety Net] contract at the required $96 million level."

The documents also include about $100 million in "expenditure cut options" to help close the budget gap. Among program cuts being considered is a $20 million cap in new contributions to the District’s Housing Production Trust Fund, which supports increased affordable housing, or the complete elimination of any new contributions to the fund during fiscal 2005 – which would free up $40 million to cover other government expenses. Also proposed is the elimination of the $10 million Neighborhood Investment Act funding that the council recently approved and elimination of a $2.4 million plan to bring the city’s recycling program in-house. Most of the remaining options would either eliminate or reduce funding for Medicaid-related programs.

An aide to Councilwoman Sandy Allen, the Ward 8 Democrat who chairs the council’s Human Services Committee, said Allen planned to discuss the proposed health-care related cuts with City Administrator Robert Bobb. The mayor has charged Bobb with primary responsibility for crafting his administration’s fiscal 2005 budget.

Councilwoman Schwartz said she planned to meet with Bobb also to note her objections to proposed program cuts and fee increases in the Public Works, Motor Vehicles and Transportation departments.

"I’m certainly going to try to hold those type of governmental functions harmless," said Schwartz, who chairs the council’s Committee on Public Works and the Environment. "There are other ways to do the cuts."

Among the "other ways" to cut spending that Schwartz said she thinks the mayor should consider is elimination of many personal services contracts and an across-the-board five percent decrease in city contract expenses.

During his weekly press briefing on March 17, Mayor Williams announced that the budget gap had been reduced to about $80 million. The draft budget documents, a copy of which The Common Denominator obtained, show that reduction being achieved by eliminating the planned replenishment of $58.7 million that had been borrowed from the Tobacco Settlement Trust Fund for non-health-related uses in previous budget years and through various other non-specific reductions and transfers in expenditures.

Among options for increasing revenue, the documents propose higher fees for residential parking permits, driver’s licenses and parking meters. An additional six photo radar cameras to catch speeding motorists and an additional 10 cameras to catch red light runners are proposed to net an additional $7.9 million in revenue for the city budget. Increased enforcement of towing and booting regulations could produce an additional $2.2 million and a new "streetlight maintenance fee," which would be passed on to consumers as part of their PEPCO bills, could bring in another $10.2 million.

New or increased taxes, totaling $58.4 million, account for the bulk of options listed to provide additional revenue. The documents propose a $20 million increase by raising personal property taxes on businesses and a $21.7 million increase by raising the city’s tax on commercial parking fees from 12 percent to 18 percent.

A new "health care provider tax" would impose a 1.2 percent tax on the District’s hospitals and an 8 percent tax on nursing homes to bring in $16.7 million.