- The Washington Times - Wednesday, March 23, 2005

D.C. Mayor Anthony A. Williams yesterday announced his fiscal 2006 budget, which included record spending for public schools and health care, $94 million in tax breaks for residents and plans to revitalize some of the city’s struggling neighborhoods.

Mr. Williams, a Democrat, said the $6.6 billion budget calls for “broad and progressive tax relief” for the first time since he became mayor in 1999.

The budget includes $2.2 billion in federal money.

The tax-relief package is divided into $53 million in scheduled cuts and $41 million in new ones, officials said.

Mr. Williams said the increase in the homestead deduction — from $38,000 to $60,000 — would save property owners about $211 each on their tax bills.

Low-income residents would get an income-tax break through an expanded Earned Income Tax Credit, he said.

The total “core local budget” of $4.4 billion is a 5.4 percent increase over the fiscal 2005 revised budget, according to documents.

Mr. Williams said the budget will change as D.C. Council members review it during the next two months before sending it to Congress for final approval. However, he expects no major changes.

“The general contours of this budget will remain intact,” Mr. Williams said.

D.C. Council member Jack Evans, Ward 2 Democrat, agreed with the tax relief, but said it might not result in lower property-tax bills because of skyrocketing assessments.

“Property taxes are not going to go down,” said Mr. Evans, chairman of the council’s Committee on Finance and Revenue. “They’re going to continue to go up.”

He was among several council members eyeing a mayoral run next year who praised Mr. Williams’ budget.

“This is an outstanding budget we all can appreciate,” said council Chairman Linda W. Cropp, at-large Democrat.

Mr. Williams acknowledged that the District has reached a “crossroads” amid concerns that the recent economic boom has turned the city into one of either rich or poor. But he said the proposed budget will spread the prosperity to often-neglected neighborhoods.

The budget will rely, in part, on cash reserves to pay for numerous capital-improvement projects across the city, particularly in the Anacostia neighborhood.

Under the proposed budget, cash reserves will be reduced from about $1.2 billion to $750 million, officials said.

Chief Financial Officer Natwar M. Gandhi said using surpluses will not hurt the city’s bond rating, which has risen to A- grade status from junk status in the 1990s.

“The function [of government] is not to hold cash,” he said. “The function of government is to provide services.”

Other highlights include $147 million to repair city schools, $22 million for 11 new charter schools and $16 million to redevelop property along several commercial corridors, including Georgia Avenue NW, Rhode Island Avenue NE and Alabama Avenue SE.

The budget also sets aside $13 million for the Anacostia Light Rail project. The six-stop, 2.7-mile rail line along the east side of the Anacostia River is expected to start in the fall of 2006.

The bulk of the spending will go to the city’s Health Department and school system.

The Health Department would receive a 5.1 percent funding increase for an overall budget of $1.7 billion. The school system’s budget would increase by 5.8 percent, to $1.1 billion.

The Metropolitan Police Department’s budget would increase by 1.2 percent, from $372.5 million to $377.1 million. The figures include a planned, 10 percent cut in overtime.

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