- The Washington Times - Tuesday, March 19, 2002

D.C. Mayor Anthony A. Williams yesterday proposed a city budget of $5.6 billion for fiscal 2003 that would increase spending in the District by nearly 5 percent an increase predicated on the city's postponing previously announced income-tax cuts until 2004 or later.

Mr. Williams, a Democrat, said he expects overall revenue to increase by about 3 percent during the next year. He's recommending that a projected $200 million spending gap be sealed with $90 million in spending cuts, coupled with the postponement of income-tax cuts passed by the D.C. Council three years ago.

"I don't believe the further reductions in the income tax as provided in the Tax Parity Act of 1999 can be realized in the coming fiscal year," Mr. Williams said. "The simple truth is we cannot afford [it]."

The spending plan to take effect next October if passed by the D.C. Council in June will be the first since 1996 to be proposed solely by elected city officials without the oversight of a presidentially appointed financial control board.

The plan was praised yesterday by the majority of D.C. Council members. Seven of the 13-member council's 11 Democrats provided something of a cheering section for mayor, joining him behind the podium at a news conference at One Judiciary Square.

"The financial authority is gone. This is the mayor's budget," said council Chairman Linda Cropp, at-large Democrat. She added that although there may be minor tweaking before the final budget is passed, the mayor's proposal is largely supported by most of the other council members.

For example, Adrian Fenty, Ward 4 Democrat, said the idea of repealing the Tax Parity Act is "for the basics so that the mayor can continue providing very basic service delivery."

Harold Brazil, at-large Democrat, added: "I think the tax cuts, or the implementation of the earlier tax cuts, was ignoring reality."

Some council members, he said, have been "blinded by this aura of a tax cut." The tax cut is just not feasible "when there's ample evidence of mounting deficits."

Other members of the council who joined the mayor yesterday included Phil Mendelson, at-large Democrat; Sandra Allen, Ward 8 Democrat; Vincent B. Orange Sr., Ward 5 Democrat; and Jim Graham, Ward 1 Democrat.

Carol Schwartz, one of two Republicans on the council, said she was satisfied with much of the proposed budget, but she views the delay of planned tax cuts as a problem. "I hate to see [Mr. Williams] take away any part of the tax parity pledge and renege on it," she said during a telephone interview. "To me, your word is your bond."

Mrs. Schwartz added one of the biggest problems is trying to get comparable income-tax rates with the Maryland and Virginia suburbs and other states around the country. "We have the highest income-tax rate in the country, and we need to try to bring [the D.C.] rate more in line with that," she said.

At-large council member David Catania, the only other Republican on the council, said he hasn't yet reviewed the entire budget but, "from a quick look at it, you have nearly $270 million more in spending [than you did last year], and that doesn't look like an austere budget."

In justifying the deferral of the Tax Parity Act, the mayor cited the need to tighten the city's financial belt in the wake of the events of September 11. He also made repeated reference to a study released Friday by D.C. Federal City Council, a business and civic advisory group that is predicting a $500 million deficit for the city by fiscal year 2005 if spending isn't brought under control.

The study commissioned by the group calls for postponing the tax cuts and spending reductions of between $110 million and $160 million by 2005.

The spending cuts called for in the proposed 2003 budget won't reach the $150 million target identified by the report as a goal over five years, Mr. Williams said. "To get the rest of the way, I will review their report and continue identifying every opportunity to reduce costs in this government while still protecting critical investments in neighborhoods and city services."

The proposed budget does include more $32 million in tax relief geared to reducing property and business taxes. For homeowners who have received notices of property assessment, the budget calls for capping single year increases at 25 percent.

The 2003 budget proposal also calls for spending increases in the following specific areas compared with fiscal year 2002:

• Public Safety-Justice: $646 million, 2 percent increase.

• Public Education: $1.2 billion, 11 percent increase.

• Human Services: $2.4 billion, 35 percent increase.

• Public Works: $320 million, 7 percent increase.

It also marks the first time since Mr. Williams took office in 1999 that his staff will have to prepare spending plans for all city departments. Several court receiverships that controlled foster care and other human services programs have ended over the past 12 months.

The mayor pointed out that administrative costs outlined in his 2003 budget total $279 million, a 2.5 percent decrease from this year. "Let's not forget how much we have already achieved," he said. "We have reduced the full-time work force of this city by roughly 12,000 employees in the past 10 years."

Mary Shaffrey contributed to this article.

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