Friday, March 21, 2008

D.C. Mayor Adrian M. Fenty yesterday proposed a $9.4 billion city budget for fiscal 2009 that has no new taxes for residents but includes fee increases and changes a commercial tax-relief program approved by the D.C. Council earlier this year.

The budget proposal, the second in Mr. Fenty’s term, calls for a 1 percent increase in local, nonfederal funding — from $5.62 billion in fiscal 2008 to $5.66 billion next year — and is only a slight increase from last year’s total approved budget of $9.1 billion.

The mayor’s first budget included a proposed local spending increase of roughly 8 percent.

“Without any question, you would describe this as a fiscally conservative budget,” said Mr. Fenty, a Democrat.

However, the budget proposal includes a plan to increase the monthly, emergency-telephone surcharge imposed on most D.C. residents — from 76 cents to 99 cents. And Mr. Fenty wants to increase fees for riding in an ambulance, which can be paid for by insurance companies and Medicaid.

The proposal also calls for increasing the cost of applying for a basic business license and establishing new fees for obtaining a general business license and general-contractor endorsement.

Mr. Fenty called the 911 and basic-business-license increases “nominal.” Increasing the 911 fee would bring in nearly $4 million for the city and the business-application fee increase would help bring in $2.2 million in revenue, according to budget estimates.

The ambulance fee increase — an attempt to reduce the number of nonemergency ambulance transports — would bring in roughly $7 million.

Council member Phil Mendelson, who opposed Mr. Fenty’s attempts to increase the 911 fee from 76 cents to $1.55 in last year’s budget, said this year’s proposed increases amount to tax increases.

“We can’t continue to expand government when the country’s in a recession and do it through tax increases,” said Mr. Mendelson, at-large Democrat.

Mr. Mendelson also said he would again fight the 911 fee. “I would say there are tax increases in this budget,” he said.

The council is scheduled to hold hearings on Mr. Fenty’s budget in the coming months.

The spending plan also follows assertions by D.C. Chief Financial Officer Natwar M. Gandhi last month that the District faces a $96 million budget gap due in part to the struggling national economy and a commercial property tax-relief package for small businesses passed by the council in January.

Properties valued at $3 million or less would be taxed at a rate of 91 cents per $100 under the council’s approved cuts, while any assessments above that value would be taxed at a rate of $1.85 per $100.

Mr. Fenty has proposed phasing in the cuts over three years, which would save the District roughly $81 million in fiscal 2009. The mayor’s plan also would adjust the rate for higher-valued properties to $1.80, while those at less than $3 million as of the first of this year would have their rate eventually fall to $1.40.

The move would require council approval to repeal the previous legislation.

The budget also includes plans to increase the property-tax rate on vacant properties from $5 to $10 per $100 of assessed value. The council gave preliminary approval to the increase earlier this month.

Council Chairman Vincent C. Gray, who co-introduced the bill, said members will work with Mr. Fenty “to ensure that the budget we implement is fiscally sound, but also sensitive to the needs of the District’s residents, particularly in the areas of education, public safety, health and human services, and tax relief.”

Mr. Fenty said officials also were able to trim city expenditures by eliminating vacant positions that did not directly serve D.C. residents and by working with agency heads to eliminate unnecessary expenditures.

Officials cut funding for at least 550 out of 1,000 empty positions, saving the city nearly $36 million. Agencies can appeal to reclaim some of the positions if they are needed, said City Administrator Dan Tangherlini.

“I think it’s important to point out that most of the vacancies we took have been vacant for a long, long time,” said Mr. Tangherlini, who led the development of the budget. “A vacant position provides no services to the citizens of the District.”

The spending proposal also includes $773 million for D.C. public schools.

Mr. Fenty said $532 million will be dedicated to individual schools, a roughly $40 million increase over last year’s amount and one that will help pay for hiring more art and music teachers and expanding pre-kindergarten.

The budget also proposes spending $6.5 million for the Metropolitan Police Department to reach 4,200 sworn officers; $2.5 million to fund ShotSpotter gun detection and surveillance camera initiatives; $60.8 million for affordable housing and $60 million for street and lighting improvements.

Mr. Gandhi said the budget proposal as presented yesterday is “fiscally prudent” and balanced and will enable the District to maintain good standing on Wall Street.

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