There’s good news and bad news in Mayor Adrian Fenty’s last budget proposal as chief executive of the District of Columbia.
The good news is that the revised fiscal 2011 budget does not include any tax increases for D.C. residents. In October, Fenty also ordered city agencies to cut their total expenditures by 10 percent and issued a mayoral order freezing government hiring.
However, cuts to popular programs were also needed to plug a $188 million budget hole. These cuts are not only necessary, but many are long overdue, including a major reduction in the mayor’s Summer Youth Employment Program. The revised budget scales the summer jobs program back to the original six weeks and limits it to 12,000 participants instead of the free-for-all that went millions over budget and paid teenagers to do nothing.
Council members will soon be besieged by advocates for this and other programs on the chopping block. But they need to keep their focus on the big picture.
In the past six months, Chief Financial Officer Natwar Gandhi reduced the city’s 11.75 percent debt load, which was perilously close to its 12 percent borrowing limit, to 10 percent. But this feat was not accomplished by paying down the debt or negotiating more favorable interest rates. No, Gandhi merely extended the timeline so that the city will be paying interest only for the next five years, shifting the repayment burden to future taxpayers for money that the D.C. government has already spent and ensuring that any future borrowing will be at higher interest rates.
This fiscal year, D.C. taxpayers will pay $412.9 million to service $7 billion in long-term debt, including the city-built baseball stadium. Compare that figure to the $6 million the mayor wants to cut from the Department of Transportation’s sidewalk, road and alley repaving fund. D.C.’s capital plan already contains hundreds of millions of dollars worth of major renovation projects, including a makeover of the central library and the Metropolitan Police Department headquarters that will keep city residents in hock for decades to come.
A city that has to resort to payment extensions to meet its basic debt obligations has no business spending additional money on a streetcar system, a city-financed hotel, a new soccer stadium or any of the myriad “economic development” ideas that depend on other people’s money for their success.
