- The Washington Times - Monday, November 22, 2010

The District is in such dire financial straits — one city lawmaker characterized it as a “crisis” — that officials are considering cuts to such sancrosant agencies as public safety and schools to ward off a growing fiscal 2011 deficit and a looming $345 million budget gap in 2012.

Social service programs and other discretionary spending face some trimming, but funding cuts in schools and public safety are inescapable, at-large D.C. Council member Michael A. Brown said.

“We have to look at programs that traditionally are not on the table,” Mr. Brown told The Washington Times. “Police, fire and schools. These are agencies that haven’t traditionally been on the table.”

By law, the city must establish and sustain a balanced budget and Mayor-elect Vincent C. Gray has promised a hard line against new taxes, which means the District will have to come up with major spending cuts quickly.

“This is a crisis situation,” said Council member Jim Graham of Ward 1, a minder of the city’s safety net and usually an opponent of cutting social services. “We have to consider everything.”

Their comments followed Mr. Gray’s announcement Monday that the budget deficit had grown from $175 million in September to $188 million.

In his road map detailing the budget woes, Mr. Gray twice targeted special-education funding: One bulleted item cited $31.7 million in cost overruns, and the other listed $10.1 million in unbudgeted raises and rent-cost overruns.

In the area of public safety, lawmakers cited overtime costs as a long-standing budget breaker, and said that lax internal-spending controls at various agencies put pressure on the city’s finances. The Fire and Emergency Medical Services Department, for example, overspent its overtime budget by nearly $9 million in fiscal 2008, $7.2 million in 2009 and $4 million this year.

But spokesmen for the city’s fire and police unions immediately criticized cuts in public-safety spending and suggested other places to find savings.

“I still do not understand how they are going to explain to the public that they’re going to have to be less safe,” said Kristopher Baumann, head of the union that represents Metropolitan Police officers. He said budget cuts that lead to fewer officers will mean less community policing and more crime.

“We’re going to have different expectations and a different vision about the way we police,” he said.

Mr. Baumann said excessive social service spending should be trimmed and fiscal accountability should be increased before anyone considers cutting public safety spending.

“That’s not good government. They keep saying we’re down to the bone but we’re not even through the meat yet,” he said.

Ray Sneed, president of the D.C. Firefighters Association, said he understands that “everyone is going to have to be held accountable” but that he thinks union officials should be consulted on the cuts.

“Hopefully, they go back and evaluate the budget and they won’t need to have to cut police or fire,” he said. “But if cuts need to be made, let us have the opportunity to sit at the table and be a part of the decision-making process.”

Mr. Sneed said some areas of the fire department, especially a recent growth in top-tier management positions, could be scaled back to reduce spending.

“I think you will see there are areas you can trim without an adverse effect on service delivery to the citizens,” he said.

The situation isn’t as bad as the mid-1990s, when the city didn’t have money to meet its payroll, and its financial and accounting records were in such a shambles that Congress and the Clinton administration created a control board to oversee D.C. affairs.

In this latest budget crisis, the city’s financial and data systems have helped pinpoint spending problems.

“The systems are in better shape, not perfect, but in very good shape,” said economist Alice Rivlin, a member of Mr. Gray’s transition team.

Mr. Gray offered few specifics on how he proposes to close the gaps, other than calling for a freeze on new capital projects, which could save the city $420 million over the next four years.

But his council colleagues were more forthcoming about cutting agency budgets and paying higher taxes.

Most of the city’s lawmakers support tax increases, and Mr. Brown said Monday that he will reintroduce his so-called millionaire’s tax bill, which the council rejected last spring. At the same time, the council also voted against an income-tax-raising plan by Mr. Graham.

“We will come to a meeting of minds on where the threshold should be,” Mr. Brown said.

On schools, Mr. Brown pointed out that spending has always been a contentious issue, especially since the mayor and council restructured governance in 2007, giving Mayor Adrian M. Fenty broad latitude to run schools while lawmakers gained the budget reins. Special education, which is under court supervision because of long-standing class-action lawsuits, has added to annual cost overruns.

Mr. Fenty and former schools Chancellor Michelle A. Rhee blamed the overspending on the council, saying it had shortchanged their budget requests.

Interim Chancellor Kaya Henderson leveled the same complaint Monday.

“Special education was underbudgeted for the last few fiscal years, which is leading to reports of overspending,” Ms. Henderson said. “In fact, special-education spending has remained constant for the past few years. DCPS has been working with [the office of the chief financial officer] to correct the reports and accounting which have lead to these reports.

“I am working with the mayor and CFO to make sure our budget is solid and financial systems correctly portray where we have areas of overspending,” she added, “but the issue as it relates to special education is underbudgeting in my estimation.”

But freshman lawmaker Mary Cheh of Ward 3 disagreed, saying the Rhee administration engaged in “smoke and mirrors” regarding all school spending.

“Since I’ve been here, first they tell us they do have the money, then they don’t. Then they tells us those numbers were placeholders. We have to have true numbers to solve the problem.”

The budget crisis leaves city leaders walking a tightrope of deadlines, as agency directors consider across-the-board cuts that could run as high as 13 percent.

The council will deliberate on and pass those stopgap considerations and send them to the outgoing mayor, who has vowed not to raise taxes. City leaders will have to take that record to Wall Street, which last year warned the city that unchecked spending could damage its bond and credit ratings.

With the local and national economies looking gray, the mayor-elect said he and other city leaders are trying to face the grim facts, including the possibility that additional spending pressures will emerge.

“Simply put … it’s time we distinguish between the projects we need versus the projects that we want,” Mr. Gray said.

He also promised residents and other stakeholders that he would not ask for “one single dollar in tax increases without first reassuring them that we have scrubbed the budget and found every last dollar in savings first.”

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