Embattled D.C. Chief Financial Officer Natwar Gandhi on Thursday offered a rosy picture of the District’s finances for this fiscal year, predicting the city will end 2008 with an $80 million surplus.
Gandhi edged up his revenue estimates for the year by $50 million over his September forecast, thanks in large part to the continuing strength of the city’s property market. Total general fund revenue in 2008 is projected at $5.19 billion, Gandhi said.
Into 2009 and beyond, however, the outlook gets murky, and the growth is expected to slow dramatically.
“The revised estimate is made in an environment where current indicators for both the D.C. and the national economy are mixed, and difficulties in real estate and financial markets point to an unusual amount of uncertainty about the course of the economy over the next several years,” Gandhi wrote in a letter to Mayor Adrian Fenty and D.C. Council Chairman Vincent Gray.
Gandhi is struggling to restore faith in the District’s financial management in the face of the largest corruption scandal in D.C. history. The new estimates come less than a month after two tax office employees were charged with pilfering at least $20 million from the treasury by defrauding the property tax refund process.
The amended revenue estimates reflect the continuing strength of the city’s real estate market. While sales and gross receipts taxes are slated to drop in 2008, total property taxes are projected to increase over 2007 by nearly $200 million, or roughly 13 percent, the CFO said.
“As the District continues to exceed economic expectations, my administration will work to make sure that we use our funds to best address the needs of the residents of the District of Columbia,” Fenty said in a statement.
Gandhi also announced that the District sold more than $600 million in bonds and tax revenue anticipation notes on Wall Street this week to finance fiscal 2008 cash flow and longer-term obligations.
