- The Washington Times - Sunday, December 31, 2000

''The financial state of the District is sound." So says Natwar Gandhi, the District's chief financial officer. In fact, he says, the District is expected to post a surplus for FY 2001. Unbelievable, is it not, that in five years the city has moved from bankruptcy to budget surpluses? Not for long, though.

The District now finds itself staring down a significant budget gap in the current fiscal year, say Mr. Gandhi and the city's deputy mayor for day-to-day operations, John Koskinen. What that means is the District began spending at a fast clip, putting out more than it is sucking in in taxes and other revenues. Presently, the shortfall stands at $200 million, Mr. Gandhi says, but could be as wide as $250 million.

Closing such a wide gap between now and next Sept. 30 might mean deep cuts in public works, library and recreation services and public safety all the non-negotiables taxpayers took off the table two years ago. For example, the fire department, Mr. Gandhi says, is penciled in with $4.5 million in "spending pressures." But the department plans to erase at least $3 million by cutting training, overtime and fire prevention services, among other things. Even that seems tame compared to a worst-case scenario, which meant cutting nearly half of the city's 33 fire stations, one in 12 police officers, one in four libraries, thousands of subsidized day-care slots and several hundred jobs.

Interestingly, the budget cuts, city officials now say, will not be as deep as initially anticipated because the city can dip into "rainy day" funds. Congress recently gave that go-ahead. So because of Capitol Hill's blessings the city can tap up to $123 million to help close the gap and relieve the "spending pressures."

Notwithstanding the financial troubles over at D.C. General Hospital, the city appears to be reverting to its habits of old spend now and pay later. Mr. Gandhi and Mr. Koskinen deny that. While they admit the hospital and related safety net programs must be restructured, and indeed are being restructured, to save taxpayer money, they dispute accusations that they are overspending. They instead cite "unforeseen" expenses.

The D.C. Council, which a few weeks ago pressured Mr. Gandhi and Mr. Koskinen on the causes of and solutions for the budget shortfall, is as eager to get its hands on the rainy day funds as the mayor. Congress, however, saved the day or so they all say.

Whatever the defense of the existing budget gap, the fact is the city did extremely well for three years, and not just any three years. It curbed and carefully planned spending for three consecutive years. Hence, the surpluses. Alas, the fiscal straitjacket originally strung by former control board Chairman Andrew Brimmer is unraveling quickly unraveling.

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