Local
District is facing years of budget shortfalls
By: Michael Neibauer
Examiner Staff Writer
December 22, 2008
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The $127 million shortfall for 2009 is “manageable,” Chief Financial Officer Natwar Gandhi said Friday, soon after briefing the D.C. Council on his revised estimates. The council, when it closed a $131-million gap last month, set aside $47 million in case the economic outlook darkened. Gandhi also is projecting an $80-million-plus revenue surplus for fiscal 2008, which closed Sept. 30.
“My expectation is we will have enough surplus to take care of this,” Gandhi said.
But the worst is yet to come. Gandhi is now projecting that the District will collect $304 million less in 2010, $330 million less in 2011 and $328 million less in 2012, than he estimated in September. Individual income tax revenues are down and business income tax revenues are tanking, as are deed and economic interest revenues tied to the frozen real estate and credit markets.
“There will be pretty severe cuts,” said Ward 6 Councilman Tommy Wells, chairman of the human services committee. “It’ll hit human services. It can’t be just all human services. We may have to cut our schools budget, certainly take a look at it. Nobody gets held harmless.”
Council Chairman Vincent Gray told The Examiner that he’s not convinced that “we won’t face additional problems in 2009” when Gandhi returns with yet another forecast on Feb. 15. As for 2010, Gray said, the problems are “incredibly formidable.”
“I think everything does have to be on the table,” Gray said. “You look at his forecast, it is sobering.”
A spokeswoman for Mayor Adrian Fenty did not respond to calls for comment.
Gandhi warned that the deep recession is likely to continue for at least another year and a half.
This may be an opportunity “to look at where we’re spending money and where we may lack discipline,” said Ward 3 Councilwoman Mary Cheh. The city has been “too lax and maybe too ready to give away tax dollars for this, that and the other thing without thinking about tomorrow.”
The revised estimate for 2009 includes a minuscule bump in sales tax revenues, perhaps attributable to the upcoming presidential inaugural. But Gandhi said he expects the inauguration, despite the million-plus visitors, to have only a “marginal” effect on the city’s bottom line.
