Dr. Natwar Gandhi has never been one to overstate the District’s financial well-being. To the contrary, the chief financial officer has been known to low-ball the city’s revenues, in part to dissuade the mayor and city council members from spending cash they did not have.
This is one reason Gandhi has earned the nickname “Dr. No.”
So when Gandhi wrote in a letter to city officials this week that the city’s revenue stream has essentially remained even, everyone in the District building interpreted it as great news and breathed a sigh of relief. Gandhi’s last few revenue reports have predicted drops in tax revenues in the hundreds of millions of dollars.
Translation: The bleeding has stopped. In current business parlance, flat is the new up.
“Although the general economic outlook has improved somewhat since the June revenue estimate,” Gandhi wrote, “uncertainty is still great, and risks remain for both the national and local economies.”
This is “Gandhi-speak” for “don’t get too excited, we’re not out of the woods, yet.”
Compare this to the economic hardship reports coming from our neighbors.
A month ago, Virginia Gov. Tim Kaine told the General Assembly the state would have to cut $1.5 billion from its budget. Kaine said the state had already cut $5.6 billion from the budget during the past two years; the revenue shortfall from the summer amounted to $1.2 billion.
Maryland Gov. Martin O’Malley has already reduced the state budget by more than $4.3 billion, but he said last month the state was short an additional $700 million. He suggested furloughs, salary cuts and layoffs for state workers.
Once-flush counties such as Montgomery and Fairfax are bleeding cash and cutting back, too.
The District has had to cut its budget over the past year, but not so close to the bone. There has been pain, the city has cut funds to nonprofits, some teachers will lose their jobs, but the city is coming back to fiscal health.
“The bottom may have been reached,” Gandhi tells me. “At least we’re not expecting to lose another $100 million.”
What makes D.C. more resilient that its neighbors?
Location, location, location; and upscale jobs.
“Washington is hot property,” Gandhi says. “People want to come here.”
D.C.’s revenues from real estate transfers — commercial and residential — are expected to increase.
And though the District’s overall unemployment rate is more than 10 percent, most of those losses are in low-scale jobs. Tax revenues from professional jobs are up 5 percent over the last three months, Gandhi reported. More than half of D.C.’s jobs are in government, health care and education.
“All three areas are still growing,” Gandhi tells me.
The only bad side to the District’s relatively rosy economic picture is that it undercuts the city’s occasional push for a commuter tax. Our poor neighbors might need the cash more than we do.
E-mail Harry Jaffe at [email protected].
