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Mayor, Officials Receive Praise for Surplus

James Wright | , WI Staff Writer | 2/2/2012, 11:18 a.m.

Some Want Extra Funds to Help Residents

City officials are patting themselves on the back for the District being able to amass a budget surplus. But critics suggest that whatever success the city enjoys has come at the expense of ordinary residents and businesses. The budget windfall has been fueled by exorbitant parking fees, the five cent bag tax, higher taxes for local businesses and increased income taxes for the wealthiest D.C. residents.

And even as elected officials crow about their success the news belies the grim reality on the ground. While the District is not in as dire straits as other jurisdictions, the pain felt by the 2008 economic meltdown and a stubborn recession has spared the lives of middle-class and low-income residents.

President and CEO of the D.C. Chamber of Commerce Barbara Lang reacted to the news by saying, "We want our money back."

"We call on [D.C. Mayor Vincent] Gray to exercise some fiscal responsibility and refrain from spending any surplus, especially when the Chief Financial Officer has projected further shortfalls in revenue for fiscal year 2013 of over $100 million," Lang said. "However, we at the chamber would go even further; it is our contention that rather than simply banking the money it should be used to revoke the income tax increase placed on residents and the new business taxes put forth in the fiscal year 2012 budget. It is time for the government to rein in on spending instead of squeezing residents and businesses."

An audit conducted by the accounting and management firm of KPMG said the District ended the year with $240 million more in revenue and savings than expenditures and an increase in the city's Fund Balance to $1.1 billion over the $890 million in the fund at the end of fiscal year 2010. D.C. Mayor Vincent Gray said that he is pleased that the city is doing well financially.

"One of my top priorities in office has been to stabilize and rebuild the District's financial health after years of spending down our crucial savings account," Gray, 69, said. "I'm proud that, despite a very challenging economic climate and difficult budgetary choices we were forced to make, the District government saved well, spent wisely and put ourselves in excellent shape for the future."

Despite the District's good fortunes the rest of the country and many of the city's residents are being buffeted by an economic storm that shows no signs of abating. The Rev. Graylon Hagler, senior minister at the Plymouth Congregational Church of Christ in Northwest, said a surplus should benefit struggling Washingtonians.

"The surplus should be spent on social services," Hagler said. "People are having a rough time and the government should be there for them. The government should take care of its citizens."

Gray, in a press conference Monday with Chief Financial Officer Natwar Gandhi, D.C. Council Chairman Kwame Brown (D), D.C. Council members Jack Evans (D-Ward 2) and Vincent Orange (D-At-Large) (in the audience), said controlling spending, instituting a hiring freeze on unfilled personnel positions and managing spending pressures has produced the surplus along with growth in the city's population and strong consumer spending. Gandhi said the city's commercial real property is a boon to it as well as the capital markets' positive view of the economic development taking place.