Members say city’s bond rating at risk under Fenty budget The D.C. Council is taking aim at Mayor Adrian Fenty’s effort to slash the city’s cash reserves, saying it imperils the District’s bond rating and threatens to push the capital back over the bankruptcy ledge.
Under the mayor’s budget, the city’s “fund balance,” which includes reserves to pay the District’s debt, would shrink by more than $300 million between fiscal 2009 and fiscal 2012. The fund balance is made up of money left over from previous years’ budgets.
The city’s “rainy day” fund, set aside for emergencies, would actually see an increase. But set-asides to pay the city’s debt and for legally mandated spending projects would shrink drastically.
Fenty’s proposal
Cuts to the city’s “fund balance”
Fiscal 2009: $920 million
Fiscal 2010 (proposed): $822 million
Fiscal 2011 (proposed): $656 million
Fiscal 2012 (proposed): $607 million
Fenty is scrambling to close a nine-figure budget gap in an election year. But memories of the mid-1990s, when the District went broke and was placed into congressional receivership, are long. “I think it’s a dishonest budget,” Councilwoman Mary Cheh, D-Ward 3, said Wednesday after a lengthy council breakfast meeting. “If we were to follow what he’s asking, it puts us in jeopardy … [of] bankruptcy and congressional control.”
Council Chairman Vincent Gray, a Democrat, is challenging Fenty in this September’s primaries. He said Wednesday that he thought Fenty’s raid of the city’s reserves was irresponsible.
“I’m very concerned about our bond rating,” he said.
Fenty spokeswoman Mafara Hobson said in an e-mail that the money would be restored after fiscal 2011, but the council says it has different math.
Gray has told his colleagues to go back to the agencies they oversee to look for ways of restoring the fund balance.
Even longtime Fenty loyalists on the council are stepping back. Jack Evans, D-Ward 2, said Wednesday that he’ll oppose the cuts to the fund balance.
