The D.C. Council on Monday slashed, froze and shifted nearly $180 million its current budget, closing a projected $131 million shortfall while setting aside millions more in the likely case that the economic situation worsens.
The emergency budget resolution, said Council Chairman Vincent Gray, will “address the reality of declining economic conditions that are all too apparent.” Tough choices abound, he said, but each will “prepare us for potentially worse news in the coming months.” The measure was approved unanimously.
The gap-closing initiative, a blend of proposals offered by Gray and Mayor Adrian Fenty, slashes $55 million outright from the 2009 fiscal year budget and sets aside $46 million in a reserve fund to be used if the deficit widens, as most council members predict.
“If they’re right, it would translate to further reductions,” Gray said. “I’m hopeful that it won’t.”
Establishing a reserve was key to the budget balancing initiative, council members said. But to do that, millions of dollars once dedicated to several popular programs were shifted into a rainy day fund, including $11 million for down payment assistance, $8 million for homeless housing programs and $442,000 for library upgrades. Those dollars will revert to the general fund if Chief Financial Officer Natwar Gandhi projects the District’s cash flow will slow further.
In a letter sent to Gray last week, Fenty indicated that some council cuts could have a devastating impact on programs for low-income residents. The Department of Housing and Community Development, the mayor said, might eliminate the down payment program for first-time home buyers altogether “because administrative costs would be excessive compared to the number of people served.”
In a statement issued by his office Monday, the mayor said he would abide by the council’s decisions.
Ward 8 Councilman Marion Barry, chairman of the housing committee, urged a two-week delay in the vote, citing the potential impact on housing programs. Barry ultimately voted for the gap-closing plan.
“Let’s take our time to fine tune this budget, find this money, and then we can sleep at night because we’ve done the right thing,” Barry said.
The budget cuts approved Monday include $2 million for the rent supplement program, $174,000 for adult job training, $115,000 to establish an Office of Youth Mentoring, $8.5 million to launch the Healthy DC health insured program, and $25,000 to expand diabetes education and screening,
The Department of Motor Vehicles’ plan to install SmarTrip chips in all D.C. drivers’ licenses was eliminated, saving $680,000. The Metropolitan Police Department will have to do without new office furniture, saving $100,000.
“Times were good, money was flowing,” said Ward 2 Councilman Jack Evans, recalling March, April and May when the council passed the budget. “We had no reason to believe the good times would come to an end. We should have, but we didn’t. What we’re doing is acting very responsibly today.”
But the plan sparked outrage among advocates for D.C.’s low-income and homeless populations, who argued their constituents were taking a disproportionate hit.
“This is when government should be stepping to the plate,” said Martin Trimble with the Washington Interfaith Network. “It should not be abandoning the most vulnerable as we head into these perilous economic times.”
Trimble and about 75 low-income advocates worked the Wilson Building halls on Monday, calling on the council to rescind a $20 million tax cut for small businesses instead of cutting housing programs. They had little impact.
