The District of Columbia’s financial picture remains solid, with a surplus in the hundreds of millions complemented by a growing population, good financial management and a thriving economy.
That is the conclusion of Jeffrey DeWitt, the District’s chief financial officer (CFO), in a Jan. 24 letter to Mayor Muriel Bowser (D) regarding the 2018 Comprehensive Annual Financial Report.
District law requires the CFO to submit the report to the mayor each year.
DeWitt said during 2018, the city’s financial and economic standing “continue[d] to be strong.”
“The District’s population continued to grow [through 2018], reaching 702,455 as of July 2018 and the job market continued to improve,” he said. “There were 7,100 new jobs created during the fiscal year, with an unemployment rate of 7.3 percent.”
DeWitt said the District ended 2018 with a $205 million surplus.
Bowser lauded the conclusions of the report.
“For the 22nd consecutive year, the audit opinion is unqualified [unmodified],” she said. “For the fourth year in a row, the auditor found no significant deficiencies or material weaknesses, which demonstrates our continued financial discipline and sound financial management. The District’s finances continue to be among the strongest of any jurisdiction in the nation and this has allowed us in fiscal year 2018 to continue providing a fair shot to D.C. residents by increasing funding to public education, homeless services, affordable housing and public safety.”
A portion of the $205 million surplus — about $80 million — has to be set aside for a “rainy day fund” to be used in emergency situations by District law, which didn’t sit well with some observers.
“At a time when residents and businesses are still suffering from the shutdown, using some of the surplus would help them and provide needed stability for D.C. economy,” said Ed Lazere, executive director of the DC Fiscal Policy Institute. “Leaving money in the bank when it can be used to tackle challenges like affordable housing actually is fiscally irresponsible. Investing now in D.C.’s long-term needs will have long-term payoffs.
“The surplus and rainy day fund should be used to tackle D.C.’s greatest challenges and unexpected circumstances that arise,” he said.
Council Chairman Phil Mendelson (D) said the report is “both good news and bad.”
“Of course, everyone will focus on the fact we ended last year with a surplus of $205 million,” he said. “Spending was within budget and revenue exceeded estimates. Great! However the surplus has already been set aside for other purposes.”
Mendelson hailed the fact that the rainy-day fund’s potency increased from 54 to 58 days, meaning that’s how much cash the District has in case of a financial emergency such as a federal government shutdown or a natural disaster that would require local funds to be utilized. However, he said the city needed to continue to stay on a path of fiscal soundness.
“The District is in a stable place financially but we must remain cognizant of our spending, especially in the wake of the recent partial government shutdown,” Mendelson said, noting that DeWitt also said the District lost more than $11 million during the recent shutdown in another report.