Mayor Adrian Fenty presented his fiscal 2011 budget to the D.C. Council last Thursday, on April Fools’ Day. The unintended irony was overwhelming.
On Feb. 5, Chief Financial Officer Natwar Gandhi had warned the council that the city was perilously close to hitting its 12 percent debt cap. Gandhi also admitted dipping into a fund set aside for Federal Emergency Management Agency-like emergencies.
The timing could not be worse. Last year, D.C.’s poverty rate hit 18.9 percent, the largest year-to-year increase in 15 years, according to the D.C. Fiscal Policy Institute. Unemployment more than doubled from 5.6 percent in 2008 to 12 percent in January.
The District was supposed to be in sound financial shape. Where did all the money go? Here’s just a partial list:
$1 million (out of a $1 billion school modernization fund) was spent on “improvements” to Bruce-Monroe Elementary School, which inexplicably still has rodents and broken water pipes;
$45 million was spent on the mayor’s controversial summer jobs program, which went $31 million over budget in 2008 while paying thousands of teenagers not to work;
$47 million was given to nonprofit groups that violated tax and business licensing laws, according to the city auditor;
$48 million in earmarks was steered to Councilman Marion Barry’s ex-girlfriend and other questionable charities;
$50 million was handed over to the privately owned Verizon Center, but a non-disclosure agreement prevents taxpayers from finding out how their money was spent;
$67.5 million will freeze property taxes for 10 years on Chevy Chase developer Steuart Investment Co.’s new high-rise in the gentrifying H Street corridor;
$84 million in contracts was illegally awarded to the D.C. Housing Authority to renovate city parks and recreation centers without council approval. At least council members complained about this one;
$126 million for “school support” over and above the $614.3 million in direct funding for teachers and basic classroom supplies for a still-declining enrollment;
$272 million for a convention center hotel project that violates all good government standards by being exempted from city procurement laws.
Note that these items alone represent about $740 million worth of waste, fraud or abuse.
Instead of demanding that Fenty properly account for every dime, the council allows him to get away with no-bid contracts, questionable development projects and unsustainable spending. The result is what David Mallof, first vice president of the Federation of Civic Associations of D.C., described to the Finance Committee as an ongoing “crash in slow motion.” Instead of hitting the brakes, council members were looking out the window.
Every cent in the working capital fund the city uses to pay its bills is either restricted or escrowed. A healthy minimum would be up to two months’ worth ($1 billion). The District has none.
Gandhi’s recent interest-only debt restructuring defers repayment, but future tax receipts will be sent directly to a third-party escrow agent. With budget shortfalls that could reach $600 million next year, the District will be stuck between a rock and a hard place if interest rates go up, which many experts predict they will do by year’s end.
Council members have been too busy taxing plastic bags, bribing students to study and approving gay marriage to question the policies that put the city’s future in such jeopardy. Finance Committee Chairman Jack Evans, D-Ward 2, recently spent only about 35 minutes conducting oversight while making cryptic comments about reviving the Control Board.
Here’s the message Fenty and the council are really sending to D.C. taxpayers: “Happy April, fools.”
Barbara F. Hollingsworth is the Washington Examiner’s local opinion editor.
