D.C. residents will know in the next week the specifics of the District's FY 2013 budget when Mayor Vincent C. Gray (D) releases the state of the city's finances to the D.C. Council first, and the public shortly after.
Gray, 69, is scheduled to send his budget to the D.C. Council for approval on March 23. He said that a lot of work has gone into crafting the document.
"We are still working on it and will probably release it at the 11th hour," the mayor said half-jokingly. "We are facing challenges with this budget situation."
Gray, who talked about the budget during his bi-weekly press conference on Wed., March 7 at the Department of Employment Services headquarters in Northeast, said that the city "is looking at about $115 million in budget reductions."
"We are far and away and at a different place from 1995," he said. At that time, the District was dealing with a $500 million shortfall and the U.S. Congress mandated a control board to exercise power over the District government's spending until 2001.
Gray mentioned the surprise surplus from late 2011 at the State of the District Address that he delivered on Tue., Feb. 7.
"The financial health of our city continues to improve and just recently we announced that we ended 2011 with one of the largest budget surpluses in our history – $240 million," he said.
The city's good financial standing however, has some residents questioning the wisdom and priorities of its leaders. The announcement of the $240 million surplus had business leaders who included D.C. Chamber of Commerce President and CEO Barbara Lang demanding that the city give back the money which came as a result of the overpayment of taxes and fees, and community activists such as the Rev. Graylan S. Hagler arguing that excess city money should be used exclusively to help struggling Washingtonians.
Hagler is the pastor at Plymouth Congregational United Church of Christ in Northwest.
D.C. Councilmember Michael Brown (I-At-Large) thinks Hagler has a point, although he acknowledges that any surplus according to city statutes is required to be directed to dedicated funds to keep the city solvent.
"We have to explain to D.C. residents that we have a $200 million surplus that we can't use," Brown, 46, said. "I am concerned that programs that help poor people will continue to be sliced."
Since the surplus was discovered, there have been differing views among city leaders on what the 2013 budget may possibly look like. There was a recent spat between Gray and Natwar Gandhi, the city's chief financial officer, on how much the District will take in during the next fiscal year.
Gandhi said that the city will accrue $71 million more than he originally forecast, and Gray wasn't happy about it.
"I am concerned that your revenue projections may be unrealistically low," the mayor wrote in a letter to Gandhi that became public on Wed., Feb. 29. "Although the numbers you provided me yesterday are positive, I am unclear that your modeling accurately incorporates the many positive trends currently underway in the District."
Gray questioned Gandhi's accounting methods based on factors such as the city's population growth, declining unemployment, and economic growth. Gray's contention is that with these factors in play, the city should be seeing a higher assessment of the 2013 budget.
"It is difficult for me to believe that the revenue impact of these positive trends in Fiscal Year 2013 will be as insignificant as you currently project."
Gandhi is known for his conservative estimates, and he generally argues that it is best to err on the side of anticipating lower revenue, instead of wild speculation based on the expectation of higher estimates.
Gray's $115 million figure, which is an off-hand estimate based on information he is getting from Gandhi's office, is disputed by staff at the D.C. Fiscal Policy Institute in Northeast. The Institute studies poverty in the District and makes recommendations to political and business leaders on how to alleviate it.
Elissa Silverman, a staffer at the Institute, said she believes the deficit will be closer to $164 million and has proposed ways to close the budget gap.
Silverman, on the Institute's Web site on Wed., March 7, said Gray should use "pay-as-you-go" for capital projects instead of borrowing; require higher-earning couples to report their incomes together instead of separately; reduce unnecessary deductions and exemptions and apply the sales tax to more purchased services such as pet care, barber and beauty services.
"Taking these options would bring a balanced approach to the Fiscal Year 2013 budget," she said.
Whatever the deficit happens to be, some residents think Gray should focus on economic development.
"The mayor should put more money in the areas east of the Anacostia River," said Maurice Thornton, who lives in Southeast. "We need revitalization east of the river and more money needs to be put into school construction and improving technological access in the inner city."
Thornton, 27, is the vice president of Le Vound Inc., a design and construction company in Southeast.
"When the city puts money into an area, the area looks better. The reason that downtown or the area by Nationals ballpark looks nice is because the city invested money in those places," he said. "The city should do the same for Ward 7 and Ward 8."
Brown said that whatever budget the mayor proposes on March 23, he should not forget the city's indigent.
"It is people of color [who] rely on government in this city for survival," he said. "They are the ones who rely on housing vouchers and [government programs] to keep food on the table. We just cannot keep cutting people out."