Even though D.C. Mayor Vincent Gray heralded his 2013 budget for its “fiscal discipline,” the District’s chief financial officer simultaneously warned the city could face significant challenges hitting some of Gray’s numbers.
In his letter certifying Gray’s $9.4 billion proposed budget as balanced, CFO Natwar Gandhi warned of six items, “each [of which] relies on programmatic changes that have been difficult to attain in the past.”
“If the changes do not materialize, spending pressures could emerge,” Gandhi said.
A “spending pressure” occurs when an agency nears exceeding its budget.
While Gandhi was circumspect on how much money could be at stake, the programs he listed as “budget items to monitor” have a combined value of hundreds of millions of dollars.
The six programs: D.C. Public Schools food service, Temporary Assistance for Needy Families, D.C. Healthcare Alliance, Employees Compensation Fund (formerly the Disability Compensation Fund), Non-Public Tuition, and Unemployment Compensation Fund.
The reasons for Gandhi’s warnings about specific programs vary from wondering whether the District overestimated its potential savings to concerns that the city’s bureaucracy might stall and fail to finish certain tasks by the Oct. 1 start of the fiscal year.
For TANF, Gray is betting that guidelines that reduce benefits for people who have participated in the program for 60 months will save the city $5.6 million.
But those savings, Gandhi wrote, could ultimately be dependent on whether the Department of Human Services — which administers the program — meets its cost-cutting forecast for 2012.
To save money on the meal program in public schools, Gray’s plan hinges on the completion of a contract that will move the District from paying the “cost reimbursement” rate to the cheaper “meals serviced” rate. The contract must be in place by Oct. 1, Gandhi said, or DCPS could potentially face a shortfall.
Pedro Ribeiro, a spokesman for Gray, said the administration expects to meet its goals.
“We’re confident that we can execute the changes,” Ribeiro said.
The D.C. Council ultimately must approve the final budget.
