D.C. Council members expressed concerns over some portions of Mayor Adrian Fenty’s 2011 budget proposal on Monday, saying that some of the funding was unsustainable and might hurt the city’s ability to borrow money.
Several council members said they were worried that the proposed savings account withdrawal of $264 million to help close the budget deficit could lower the District’s bond approval rating, making it more expensive for the city to borrow money in the future.
“It’s the underpinning of everything we do. If perchance our bond rating were to be [lowered], it raises our borrowing costs,” said Councilman Jack Evans.
But Fenty defended his spending proposals, saying that if he did not tap into the savings fund, he would have been forced to cut budgets for city programs.
The District’s chief financial officer, Natwar Gandhi, assured the council that the savings account spending “by itself” would not hurt the city’s bond rating. The bond rating agencies also consider a municipality’s financial management, Gandhi said.
The current balance of the city’s savings account, he said, is approximately $920 million.
Council members also sparred with the mayor over how he would fund his proposed $101 million in pay raises for teachers. About $65 million of this tab would be picked up by private grants, while taxpayer dollars would fund the rest.
“We’re talking about a huge sum of money here that I cannot identify in the budget. … Where is it?” Chairman Vince Gray asked the mayor.
Fenty responded that Schools Chancellor Michelle Rhee would answer the question during her testimony on Tuesday, but Gray shot back that “this is way above her pay grade.”
“I don’t think every mayor should know every dollar in the budget … but we’re talking about an issue involving education, which is your top priority,” said Gray, who is challenging Fenty in the 2010 mayoral election.
Councilman Marion Barry also slammed the mayor for not indicating where the money would come from. “Let me ask you a question: Is this the chancellor’s budget or your budget?” Barry said. “I think the mayor of the District of Columbia … ought to be able to tell this council where the $100 million is coming from.”
Fenty invited the council members to e-mail him or call him with their questions. “There are questions that I guess I’m not going to have the answer to sitting on the dais,” he said.
