- The Washington Times - Thursday, February 1, 2001

The District of Columbia just wrapped up its fourth straight year in the black, but even the city's most optimistic supporters predict Washington will need help from Congress and Wall Street if that trend is to continue.

"I think the long-term outlook is not so encouraging," said Rep. James P. Moran, Virginia Democrat and member of the House Appropriations District of Columbia subcommittee.

"It's like a toddler that's taken several steps on its own, but I don't trust it to walking down the street on its own," Mr. Moran said of the D.C. government's recent handling of its finances.

This week, the city posted its fourth consecutive balanced budget and reported a surplus of nearly $241 million.

The improved finances mean the city likely will be freed of the oversight of the congressionally created financial control board, established in 1995 to guide the city back to fiscal health.

The board which includes financial and government advisers appointed by the president won't officially dissolve until Sept. 30, but members are expected to meet Wednesday to certify the audit and restore co-opted budget and policy-making powers to the mayor and the city council.

The 1995 law creating the board remains, and could be utilized if the city again sinks into red ink a possibility that troubles the city's financial leaders.

Natwar M. Gandhi, the city's chief financial officer, agreed the city has caught a lucky break over the last several years, as the economy has boomed and tax collections soared.

"Heaven forbid we should be in a recession. We would be in the soup," Mr. Gandhi said. "Then the city would have to make a choice of not having a deficit, so the city would have to cut services because I don't think the city wants to have a control board again."

The city's $241 million surplus can be attributed to the profits that D.C. residents and businesses racked up in the bullish stock market, Mr. Moran said.

The city would be unwise, he said, to count on that income-tax windfall in the future.

"The stock market generated income that was unprecedented," Mr. Moran said.

In addition to the recent depression of the stock market and talk of a recession, the city's population is shrinking, leaving it with less of a tax base, Mr. Moran said.

According to the U.S. Census, the city's population of 572,059 in 2000 was a 5.7 percent decrease from 1990.

"I think the middle-class families with children continue to leave the city and go to Prince George's County. It's largely due to the [poor] school system," Mr. Moran said. "The city's physical infrastructure is going to require a significant investment over the next few years."

One way the city can avoid having another control board watch over its shoulder, Mr. Gandhi said, is to have a dedicated stream of revenue flowing to the District from the federal government.

Mr. Gandhi and other city leaders are supporting Delegate Eleanor Holmes Norton's proposed commuter tax credit.

Mrs. Norton, the District's nonvoting representative in Congress, insists the bill would not create a tax. Rather, the legislation would divert to the city treasury roughly $400 million in taxes the District's federal workers already pay to the federal government.

Mr. Gandhi said Congress needs to approve a revenue stream that would provide roughly $400 million to $600 million to help pay for services used by federal workers who don't live in, or pay taxes to, the District.

Mrs. Norton and others in the District may be expecting more money than they'll actually get, Mr. Moran said.

"I would be surprised if there is a substantial infusion of federal money over the next few years," Mr. Moran said. "With the commuter credit, it doesn't take any money out of commuters' pockets, but it is a pretty expensive supplement."

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