The District will end the fiscal year having collected $51.1 million more than previous revenue estimates, thanks to stronger-than-expected income and property tax collections, according to new numbers from the chief financial officer.
The economic backdrop in the District “continues to look strong,” CFO Natwar Gandhi wrote in a letter to Mayor Anthony Williams and D.C. Council Chair Linda Cropp. This despite a slowing real estate market, fewer tourists and a relatively high unemployment rate for the region, at 5.9 percent as of September.
“The additional revenues are due mainly to stronger than forecasted growth in the individual and business income taxes as well as real property tax,” Gandhi wrote. “Stronger-than-expected growth in these taxes more than offset the weaker than expected receipts from deed recordation and transfer taxes, the sales and use tax, and the public utilities gross receipts tax.”
For the quarter ending Sept. 30, housing sales, both condos and single-family, were down 15.2 percent from a year ago, Gandhi said, while the hotel occupancy rate was down 7.6 percent.
Williams, who leaves office Jan. 2, said the strong collections have allowed for additional investment throughout the city and protected the bottom line in case of a downturn.
“I am pleased that the city’s healthy economy continues to generate better than expected revenue — this puts the government on excellent footing going forward,” the mayor said in a statement.
Previously approved D.C. Council initiatives, including $10.5 million to hire new police officers, will draw down the $51.1 million surplus to $39.6 million. The additional revenues should provide Mayor-elect Adrian Fenty some flexibility as he deals with a projected $87 million fiscal 2007 budget gap.
“I am committed to ensuring that the District’s budget supports the critical services that residents expect and deserve,” Fenty said in a statement. “Going forward, it will be important that we find new ways to make the government more efficient, so that we are prepared for any new challenges that await us in the future.”
Long-term risks to the economy
» National economic slowdown
» Protracted real estate market difficulties
» Cutbacks in federal spending
» Down stock market
Source: D.C. CFO Natwar Gandhi
