- The Washington Times - Thursday, October 3, 2002

A potential $323 million shortfall in the District's $5.8 billion budget for fiscal 2003 had local leaders scrambling this week to make cuts and raise revenue with increased fees, new taxes and other new revenue sources.
The D.C. Council, following the budget plan presented by Mayor Anthony A. Williams and options offered by Chief Financial Officer Natwar M. Gandhi, filled the gap in part by passing $136 million in tax and fee increases.
Tax cuts for businesses were put on hold. Council members raised parking-permit fees and fines, taxes on alcohol, cigarettes and housing sales while instituting taxes on formerly tax-exempt, out-of-state bonds. Officials expanded automated traffic enforcement.
The increases were passed after city officials trimmed $201 million from city agency budgets cuts that could lead to the elimination of programs like after-school care. The final, with a few alterations, totaled about $337 million in cuts and new revenue a figure the District's number crunchers hope will get the city through the fiscal year.
The spending plan, an amendment to a budget originally sent to Congress in June, is now complete after more than two weeks of negotiations.
The revisions must be approved by Congress, which requires the District to rebalance the budget when revenue projections change.
"No one person in the [council] is happy about everything in this budget," said council Chairman Linda W. Cropp, at-large Democrat. "But this bill does address the significant $323 million deficit. I applaud the council for being able to move this budget in such a truncated period."
Others were more critical of the process.
"Overall, I am pleased we got something passed," said D.C. Council member Jack Evans, Ward 2 Democrat and chairman of the council Committee on Finance and Revenue. "But I am sure we did not take the right approach by relying to heavily on raising taxes and fees. Raising taxes doesn't cut expenditures, so we are never going to catch up. As a result, we are going to find ourselves in a deficit situation in 2004."
Mr. Evans criticized council actions to tax out-of-state bonds, calling it "foolhardy," because it will affect the city's seniors many of whom shifted their investments from stocks to bonds during the faltering economy.
He, like other council members, said he wished the cuts had focused on eliminating more jobs, particularly those with higher salaries.
"In January 1999, we had 272 people working for the government earning more than $100,000," he said. "Today we have 522. That is 92 percent growth. It seems to me these are areas we should be looking at."
Council members make $92,000 per year themselves.
Two members David A. Catania, at-large Republican, and Sandy Allen, Ward 8 Democrat refused to support the budget.
Mrs. Allen said the budget is "built on the backs" of lower-income residents and those most vulnerable and most in need of social programs.
She concurred with Mr. Williams that the wealthy residents of the District should pay more in taxes to help the city during this tough time.
Mr. Catania did not disagree with her but said the biggest problem with the budget is mismanagement and misplaced priorities.
The Williams administration announced yesterday its looking for further ways to trim the budget.
City Administrator John Koskinen said the administration has set a goal of trimming the use of government-issued cell phones by 30 percent. Mr. Koskinen says about half the phones issued to his staff are being taken out of circulation.
D.C. Council member Phil Mendelson, at-large Democrat, extracted a promise from D.C. school officials yesterday that the school district would spend at least $496 million of fiscal 2003 on local schools instead of central administration. The deal also bars them from shifting any costs from the administration to the schools. In return, the council deleted language dictating this expenditure in the budget act being submitted to Congress.
Council members have sought to protect local school dollars since last spring.
"This guarantees that the money will go where the kids are the local schools," Mr. Mendelson said.
School board member Tommy Wells, District 3, said yesterday that while the $29 million budget cut would hurt, it could have been much worse.
"They were talking about as much as $100 million," he said. "The reason that it was only $29 million was because the parents and advocates came forward. Still, it's a lot of money."

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