For nearly 10 years, the District enjoyed one of the greatest economic booms in its history, thanks to the explosion of the housing market and construction - the remnants of which are still evident today. There are construction cranes all over town, vibrant new businesses, almost 10,000 new residents and a bustling night life. But times are changing, as Wall Street reminds us daily.
Unlike the 1990s, when Bill Clinton was president, there won’t be federal dollars and resources to toss toward City Hall. And that will be the case whether it’s a McCain White House or an Obama White House.
The unemployment numbers of 7 percent, or 23,700 people who are without work in the District aren’t that bad when put in perspective. While the unemployment figures are higher than the national average of 6 percent, they are a lot better than the 8.5 percent of 2004.
What is not better from a fiscal standpoint is spending restraint. There has been plenty of discussion of late between the D.C. Council and Mayor Adrian Fenty about how to fix the $131 million shortfall. But that’s the problem: It’s a lot of talk about a fix and no serious deliberations about trimming spending.
What City Hall needs is a little history lesson.
The Washington Times reported March 13, 2003, that then-Mayor Tony Williams proposed a $5.6 billion budget for fiscal 2004 but that the plan had a $323 million projected gap. The mayor’s plan was to raise taxes by 0.6 percent until 2006 on “wealthy” residents earning more than $100,000. That proposal also included increased fees to the tune of $129.4 million. “You cannot fee your way out of a deficit,” Council member Jack Evans said at that time. By the end of fiscal 2004, the deficit had vanished and a surplus appeared for all the reasons mentioned above.
Fast forward five years to the $5.7 billion fiscal 2009 budget. The good economic indicators are gone and “revenue growth has slowed considerably,” D.C. Chief Financial Officer Natwar Gandhi said in a June 9 letter to President Bush. Last year, seeing this possible outcome on the horizon, Mr. Fenty raised fees.
The deficit of 2004, while smaller than the current deficit, is similar to the one the city is experiencing now. So, what does the mayor plan to do? His current idea is to delay spending on a $10 million city-employee retirement program and cut $31 million by freezing positions and eliminating 200 vacant positions. There are other proposed cuts, too. But what he and lawmakers aren’t doing is reviewing policies and programs to determine whether they work or even question whether they are cost-effective.
The mayor and lawmakers should be telling voters and taxpayers that they are working diligently to make sure that city government lives within its means - because that is exactly what families are doing during these turbulent economic times.