A projected cash crunch the District faces this year and next threatens to compel government-wide spending cutbacks, but the city’s number crunchers expect the balance sheet to stabilize well before the fiscal 2008 spending plan is adopted.
Chief Financial Officer Natwar Gandhi is projecting an $87 million hole for fiscal 2007. The list includes $32 million for increased Medicaid enrollment, $27.4 million for the Mental Retardation and Developmental Disabilities Administration — money that should be federally reimbursed, according to aides to Mayor-elect Adrian Fenty — and $8.6 million for additional staff and maintenance contracts at St. Elizabeth’s Hospital.
Pressures and policy initiatives for fiscal 2008 expose a projected $215 million hole, including $32 million for higher Medicaid use and rates, $11 million for costlier special education transportation and $56 million for higher labor settlements and fixed costs, such as fuel, utilities and rent.
Unforeseen fluctuating costs crop up every year, said Maryann Young, Gandhi’s spokeswoman.
“This is the budget process,” she said. “This has not been identified as a ‘shortfall.’ Shortfall usually means there are few or no alternatives to closing a budget gap, and … there are options here.”
“We are really serious about making sure that government isn’t growing at an unsustainable rate and making sure we’re making efficient use of local money and getting the most out of federal and Medicaid dollars,” one Fenty aide said.
Similar pressures “have been present through four of the last five budget cycles,” Young said, and projections are bound to change from one month to the next. But as a standard response, she said, D.C. agencies have been asked to reduce their 2008 budget proposals by about 8 percent, a move that represents “prudent fiscal management.”
Other “pressures” in Fiscal 2007
» Higher-than-budgeted MRDDA salaries, $1.4 million
» Foster care staff hired to meet court order, $983,000
» More bed space at the Correctional Treatment Facility, $3.3 million
» D.C. Council transition space, $2 million
