Less than two months into the 2012 fiscal year, I was already hearing projections indicating some agencies were overspending. That was troubling. Mayor Vincent C. Gray had identified financial stability as a key area for his administration. But the Department of Employment Services was having what finance officials euphemistically call “spending pressures” because of an uptick in unemployment compensation claims. The Department of Corrections was predicting an increase in its population. The General Services Agency, created through consolidation of more than five agencies, was morphing into a budget buster — not a budget saver — according to Wilson Building sources.
Further, the D.C. Public Schools faced a $6.5 million deficit, instigated partly by the loss of a federal grant. The Board of Elections and Ethics hadn’t budgeted for the upcoming election and was short by $1 million — as was the Office of the Chief Technology Officer.
Eric Goulet, the mayor’s budget director, acknowledged there were problems. But he said they had been resolved and future overspending would be addressed swiftly.
“The mayor set up a spending pressure taskforce,” Goulet told me recently, adding he and his team had been aggressively tracking agencies financial performance. Where there was overspending, directors were required to develop “gap closing plans,” that would keep them within their existing budgets.
He acknowledged requests have been sent to the council to move money around at the elections board and the technology office, where officials failed to include the cost of renewing software licenses. Other “reprogramming” resolutions are expect to be forwarded.
“I think the mayor should get credit for focusing on this,” said Goulet. The previous administration often waited until mid-year, exacerbating the problem; the result was cuts in services and near depletion of the city’s reserve funds.
I was prepared to celebrate Gray’s fiscal management progress. But the pompoms were knocked from my hands by reports he was considering increasing the city’s debt cap, currently set at 12 percent of the District’s general fund revenues. That would spell disaster.
The Washington Business Journal’s Michael Neibauer reported Gray talked about the issue during an event sponsored by the D.C. Chamber of Commerce. “What I am trying to figure out is would we potentially imperil our bond rating if we took on more debt?” Gray said.
How could it not? Moody’s Investors Service Inc., already has given the city a negative outlook on its bonds.
Most state governments — even the feds — have been developing strategies for reducing long-term debt. It’s baffling the District’s chief executive, huddled with business leaders, would talk about adding to the financial burden of this city’s taxpayers.
Goulet told me there was a misunderstanding: “The mayor has said in no uncertain terms he is not seriously entertaining amending the debt cap.”
But why did the mayor broach the topic in a room with an audience that included developers salivating for incentives made possible by tax increases or borrowing? Could it be that Gray just can’t shed his pandering ways?
That may be his affliction. But I’m in the mood to celebrate. So, three cheers for Gray’s clamp down on agency overspending.
Wait. Do you think he’s just telling me what I want to hear?
Jonetta Rose Barras’s column appears on Monday and Wednesday. She can be reached at [email protected].
