Jack Evans guided me to the corner of the budget classroom Thursday, turned me to the wall and stuck a dunce cap on my head. The veteran chairman of the city council’s finance and revenue committee said I needed a refresher course on city finances. My last column, he said, was dumb and dumber, because it mixed capital spending with operational spending.
Guilty!
What steamed Evans was my suggestion that council members consider cutting capital projects, rather than social service program that affect poor people. One of those projects — the O Street Market — lies on the far eastern side of Evans’ Ward 2, which stretches from Georgetown through downtown to Shaw. The council has committed $46.5 million toward refurbishing the historic market. It would be nice to think that taking it off the books would help close the $220 million budget gap D.C. is facing. But it will not.
The hard facts are that the District’s numbers no longer pencil; revenues have not kept up with costs for the past two years. Unlike the federal government, D.C. cannot run a deficit. So it’s time to start following the money.
Chief Financial Officer Natwar Gandhi is scheduled to kick off the budget season today by delivering the bad news in person to the council: This year the government is $220 million in the red; he expects the shortfall to reach $473 million next year, unless the mayor and the council intervene.
But how?
Fenty has started off by punting. In a letter to the council, he promised to send his budget plan by April. That’s a month after the council starts its work. He’s either abdicating or stalling. Besides, his plan would spend more of the city’s reserves.
“We can’t do that,” says Evans. “It’s not a solution.”
The council is split along racial and political lines.
There’s the tax and spend group, led by Marion Barry. They would raise taxes: income, property, sales. The money would pay for social services, public safety and schools, which soak up 70 percent of the budget.
But D.C. already has the highest income and sales taxes in the region. Corporate income taxes are second highest in the nation. Barry and his allies have their eyes set on raising residential property taxes.
Bad idea. Squeezing the middle class homeowners will make the nation’s capital a city of very rich and very poor. Time to cut spending.
“Are we prepared to freeze the education budget as we did last year?” Evans asked. Cops and services to homeless will have to be cut, too. “It’s pain, pure and simple.”
But necessary.
Besides, Barry’s crusade to raise taxes rings a bit hollow — since he has had a spotty record paying his own taxes for the last decade.
E-mail Harry Jaffe at [email protected].
