D.C. Council Chairman Vincent C. Gray put his first stamp on the District’s shaky financial future by winning preliminary approval Tuesday of budget-balancing legislation that pares spending and pushes off inevitable tax increases until he becomes mayor next year.
The proposed cuts will close an immediate $188 million gap but aren’t deep enough to address a pending fiscal 2012 deficit, whose dollar amount is a moving target.
Two weeks ago, city officials announced that the District faces a $375 million deficit next fiscal year. But while debating the budget bill on Tuesday, lawmakers said the dollar figure could be as high as $500 million.
It’s “potentially overwhelming,” Mr. Gray said.
“Stop pretending the grim reaper isn’t at the door,” he told his colleagues. “The grim reaper is at the door.”
He and other lawmakers said the council must send Congress and residents the right message by cutting spending and reviewing all agency budgets and programs before budget talks begin anew in the spring.
“The worst message we could send to [the incoming] Congress is that we have spent our [reserve] balance fund, maxed out our credit and are now raising taxes,” said Ward 2 council member Jack Evans, who predicted the current spending pressures when he voted against the fiscal 2011 budget in May.
The spending problem “is just too big,” said Ward 4 council member Muriel Bowser, who said lawmakers should begin asking some tough questions.
“We have to ask can we afford the number of [job] positions we have,” she said. “Can we afford the number of programs we have?”
To ward off the gloomy outlook, lawmakers haggled over several tax-increase proposals before they voted on a stopgap plan crafted by Mayor Adrian M. Fenty and Mayor-elect Gray.
At the outset of the morning hearing, the belt-tightening measures, which include cuts to welfare benefits and other social-service programs, drew heckles from safety-net advocates, who have been pushing all year for income-tax increases. Protesters calmed down after several were escorted out of council chambers and when it became clear that six of 13 lawmakers, including incoming Chairman Kwame Brown, steadfastly stood with Mr. Gray against raising taxes.
The hearing wasn’t all about cutting spending.
Lawmakers agreed to restore $6.3 million to a job-training program, and Mr. Gray boosted one of his top priorities by restoring $1 million for early childhood education but compromised another.
He had planned to put $50 million into a rainy-day fund, but the proposal passed Tuesday calls for depositing $40 million in case the already gloomy forecast turns darker. It also calls for four furlough days to be tagged onto government-recognized holidays.
Legislators rejected several income-tax amendments, including a new measure by council member Harry Thomas Jr. of Ward 5, which would create a so-called jock tax, which Los Angeles and a few other major-sports jurisdictions levy against athletes.
Mr. Gray called the proposal a “worthy purpose” that “opens the door” to further discussions.
Another tax measure would raise income taxes on D.C. residents making a minimum of $75,000 a year and as much as $1 million.
Both amendments were shot down.
A final vote on the 2011 budget legislation is set for Dec. 21.