- The Washington Times - Monday, October 1, 2001

The D.C. government turned a major corner yesterday when the D.C. Financial Responsibility and Management Assistance Authority, better known as the control board, went out of existence yesterday, the last day of fiscal year 2001.

Actually, the control board didn't exactly go out of existence. Technically, under its original authorizing legislation, the control board only goes dormant and can be reconstituted if the District fails to balance its budget. In other words, all D.C. leaders must stay vigilant in our efforts to ensure that finances stay in order.

With the "passing" of the control board many people are taking a look back and asking questions about its performance. Has the control board repaired the District's finances? Did they successfully reform, modernize and streamline the D.C. government?

Given that the original purpose of the control board was to address the District's financial situation, I would say the answer to the first question is yes. And, while the second question can't be answered yes, there is still much improvement in the performance of the government. However, a little history is in order.

Throughout the late 1980s and the early 1990s, both the District and the nation as a whole were in an economic downturn. Revenues were declining nationally and locally. On a national basis, the federal deficit tripled to unheardof numbers. However, unlike the District of Columbia, the U.S. government is not required to balance its budget.

Locally, the District's finances were problematic. Although I and other council members proposed spending cuts and aggressive cost-saving measures, the mayor and a majority of the D.C. Council did not react. The economic downturn of the late '80s, combined with the District's rapidly expanding payroll, resulted in a massive cash crisis. Shortly after he began his fourth term in 1995, then-Mayor Marion Barry announced a $700 million shortfall. As a result, the District could not even borrow money on a short-term basis to run the government.

The only real alternative to restore some confidence and the ability to access capital was a control board. In the six years since it was formed, the District's finances have improved dramatically. However, what many people do not realize is that the single most important factor in the District's financial recovery was the Revitalization Act of 1997.

This legislative measure transferred responsibility for almost $1 billion on expenditures from the D.C. government to the federal government. In return, the D.C. government agreed to stop the annual $600 million federal payment since the federal government itself was in need of financial assistance.

In the end, the Revitalization Act, combined with the controls adhered to by the control board, the mayor and the council have put us in a strong financial position. So on this basis, the control board was a real success. All those who served, on a voluntary basis, deserve our thanks in particular, the first chairman of the control board, Andrew Brimmer, for his role in gaining the confidence of the marketplace in the early days of the District's financial dilemma. Also praiseworthy is Mr. Brimmer's successor, Alice Rivlin, whose tireless insistence on returning the government to local control deserves all our gratitude.

Many people are critical of the control board in regard to the efforts outside the financial arena. True, there are many, many areas of D.C. government that are still far from reformed. I know that any community meeting I attend will include at least several questions about a lack of police officers on the street and problems with some area of public works. However, some (often much) progress has been made in addressing these decades-old problems.

Still, it is incumbent on the locally elected officials to manage the government and remain fiscally responsible. Beginning today, we are on our own. It is up to us: Mayor Williams, Council Chairman Linda Cropp and the other 12 council members to make this government work. Literally, the eyes of the world are on us.

Ironically, we are entering into this new era of independence just as our local revenues have been severely impacted due to the events of Sept. 11. In fact, we are starting the new fiscal year today with the possibility of an $80 million to $100 million revenue loss. This is our first challenge in the post-control board era and it will be major.

As such, Council member David Catania and I intend to introduce emergency legislation tomorrow that will aid D.C. businesses in the hospitality and tourist areas, which have experienced severe economic hardships in the aftermath of the terrorist attacks.

Specifically, this relief package will provide up to $100 million in low-interest loans and loan guarantees to qualifying businesses to help them through the next several months. Many of our hotels, restaurants and related businesses are experiencing sharp declines in revenue industry experts place it at $10 million daily. Simple math shows that over a six-month period, losses will approach $2 billion.

Rather than see wholesale closings and bankruptcies, Mr. Catania and I believe bridge loans are the best solution to helping local entrepreneuers get through the crisis. At the same time, we are asking Congress to allocate $2 billion in direct relief to our tourist industry. Combined, these measures will significantly aid one of our most important local industries.

While this is the first of many challenges we will be facing on a regular basis, it is still important to watch. The question is, does the will, which eluded us 10 years ago, exist now for District officials to make the hard and necessary fiscal decisions?

D.C. Council member Jack Evans is chairman of the finance and revenue panel and represents Ward 2.

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