D.C. revenue exceeds projections by $89 million
The District will finish this fiscal year with $89 million more in its coffers than its June revenue estimate indicated, according to a revised estimate released Friday.
D.C. Chief Financial Officer Natwar M. Gandhi said the city should expect no significant changes to its revenue estimates in fiscal year 2012, which starts Oct. 1, because “stronger than expected real property tax revenue offsets estimated shortfalls in sales and income tax revenue.”
It is unclear how the influx of additional dollars in the current fiscal year will be used, but D.C. Council Chairman Kwame R. Brown is giving “serious consideration” to placing all of it in the city’s fund balance, his spokeswoman said.
“As my office releases the September revenue estimate, I want to reiterate my concerns regarding the use of this budget mechanism,” Mr. Gandhi said in a letter to the council and Mayor Vincent C. Gray.
Among these contingencies, the council decided to delay the implementation of a new tax on out-of-state bonds until the start of next year, because it would be unfair to retroactively tax bondholders.
Mr. Gray used a pocket veto to eliminate the delay, saying it was unwise to put $13 million in the city’s fund balance and take it back out to cover the cost of postponing the bonds tax.
Mr. Gandhi backed the mayor’s call in his letter on Friday, citing Wall Street rating agencies who had the voiced concerns about the depletion of D.C. reserves.
“In light of these factors, I urge you to consider setting aside the contingent budgeting mechanism and to use the additional FY2011 revenues as a first step to replenish the District’s fund balance,” Mr. Gandhi said.
Revenue estimates are expected to face a downturn in FY2013 and FY2014 for a variety of reasons.
“Recent economic developments, especially those relating to the Euro-zone debt crisis and the U.S. long-term fiscal stability, have increased uncertainty,” Mr. Gandhi said.
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