Just say no

A decade ago, the government of the nation’s capital was broke. Employees and vendors were not being paid, and what little cash the city did have on hand essentially went to the highest-bidding agency. The fact that the city’s municipal bond rating was junk status meant that even the U.S. Treasury was reluctant to help bail the capital out of its financial miseries. With the help of Congress, the White House and a board of unelected overseers, the city made a complete about-face. After producing seven consecutive balanced budgets, Moody’s Investment Service on Wednesday upgraded the bond rating to A2 — its highest ever for the District. Notwithstanding that good news, we direct our concerns toward the mayor’s spending plans.

With the one hand, the Williams administration is proposing increases in fees and taxes that would raise the cost of living, and with the other hand, it is proposing giving a $340 million ballpark to the wealthy owners of Major League Baseball. These and other proposed spending policies, which Mayor Williams and other high-level officials shared with us in a breakfast meeting on Thursday, move the city in the wrong direction.

The tally on the mayor’s spending proposal for fiscal 2005 is $4.2 billion in local funds and $2.25 billion in federal and other monies. The mayor wants to increase taxes on businesses large and small, and to increase fees and fines on everyone who parks and drives in the city. Residents, for example, would pay double the residential parking tax ($30 instead of $15), and the costs of driver’s licenses and fees for parking meters will increase as well. All told, the parking goons will be on the prowl to generate at least $24 million for city coffers — and that’s on top of the $64 million they generated last year. All these and other public-works proposals must be given a yea or nay by Carol Schwartz, the “Republican” lawmaker who oversees such so-called revenue enhancements. The mayor deserves a rap on the knuckles from Mrs. Schwartz, not a pass in return for the favor he gave her in 2002, when Mrs. Schwartz led the council in exempting itself from D.C. parking regulations.

Our chief concern with the mayor’s budget plan is that the 9.6 percent increase in spending can only be supported by raising the cost of living and doing business in Washington. And while the mayor calls it “balancing pain and gain,” we urge the council to call it differently. Consider social services as but one example. With one in four residents eligible for Medicaid, the mayor proposes spending $93 million on health care for the indigent. It is a dubious figure because each year the District fails to win federal reimbursement on Medicaid — with most of the deficit spending the fault of mismanagement by either the school system, the health department or social service agencies. In the past decade, the District lost $246 million in Medicaid reimbursements. The only salvation is that both the chief financial officer, Natwar Gandhi, and the city administrator, Robert Bobb, have said they are committed to reforming the health-care system.

The mayor also wants to increase entitlements for ex-offenders, and expand child-care services and HIV/AIDS treatment. “Seventy-two percent of homicide victims were ex-offenders the past two or three years,” the mayor said.

Another area of significant spending increases would be primary and secondary education. This fall, the District will have a three-tiered public education system — traditional public schools, charter schools and vouchers for low-income children. The traditional and charter schools are set to receive $1 billion, with most of that being poured into a poorly monitored bureaucracy that cringes at every attempt to bolster reform or request to raise student achievement. Next school year will likely be more of the same, unless a highly qualified manager is brought in to resuscitate D.C. Public Schools, which has lost tens of thousands of students in the past decade. Fortunately, the city is expected to get eight new charter schools in fiscal 2005, so Mr. Williams will again boost funding (by $14 million). But the mayor’s calls to gain control of the school system’s billion-dollar budget and all that flows from it remain unanswered. Without a drastic shakeup of the school system, the mayor (who vowed to step down, if, given control of schools, he does not produce positive results) and the council would be pouring more good money after pitiful results and zero accountability. We urge City Hall to wage an honorable battle to take over and reform the school system. As Mr. Bobb told us, the stakeholders in Washington “ought to be ashamed” and “outraged” about our lousy school system.

The mayor cannot in good conscience defend his attempts to raise fees and taxes, and the city he governs cannot afford to build a new baseball stadium. Indeed, the infrastructure costs alone are fully one-third of the projected $340 million proposal. More importantly, studies prove that the projected revenues from a new stadium offer no substantial economic gains to the taxpayers who finance them. (Besides, the Baltimore Orioles are a short drive away.)

The mayor, who said his 2005 spending plan is about “balancing pain and gain,” did include some good policy moves, and we plan to discuss those aspects in future editorials. But it was the liberal spending and taxing plans that had this city drowning in red ink a decade ago. Before the mayor’s bad policies gain favor with lawmakers, we urge the council to send two distinct messages to the mayor. The first is that the legislature will inflict no more pain on residents and businesses. The other is that there is no gain, or golden goose for that matter, from fully financing a stadium with public money. So, the Williams plan is D.O.A. After the council delivers those messages, lawmakers can then begin discussions on how to spend taxpayer money to benefit taxpayers.