- Associated Press - Thursday, January 30, 2014

WASHINGTON (AP) - District of Columbia officials would violate federal law if they spent the city’s local tax dollars without approval by Congress, despite a referendum approved by voters last year that gives the city that power, the investigative arm of Congress said Thursday.

The opinion issued by the Government Accountability Office represents a setback for district leaders in their longstanding quest for “budget autonomy” - the ability to spend tax dollars collected locally without subjecting them to the uncertainties of federal budgeting.

District voters approved the referendum by a more than 4-to-1 margin in a special election last April, and it took effect on Jan. 1. The referendum amended the city charter to say that local tax dollars are not subject to congressional review. It also allows the city to set its own fiscal year. The city follows the federal fiscal year, which begins in October, complicating school funding.

The city brings in about $7 billion a year in local tax revenue, accounting for roughly 70 percent of the city budget. District leaders have balanced the city budget for more than 15 consecutive years, and the city ended the last fiscal year with a $417 million surplus. Democratic Mayor Vincent Gray has used the city’s longstanding fiscal health to argue that Congress shouldn’t interfere with the budget process.

But in the wake of the GAO opinion, the mayor’s office made clear it would not enforce the referendum if that meant violating federal law.

“While we are disappointed, we are not surprised by the GAO’s legal opinion,” Pedro Ribeiro, a spokesman for Gray, said in a statement. “While we will continue working to secure both budget and legislative autonomy for the district, we intend to comply with all federal and local laws.”

Although Gray voted for the referendum, he has said he was “dubious” about it, and Attorney General Irvin Nathan warned in a memo that it might not be legal. City leaders and Del. Eleanor Holmes Norton, a Democrat who represents the district in Congress, have also pushed for Congress to pass a bill granting the city more control over its budget. A bill introduced by Rep. Darrell Issa, R-Calif., has bipartisan support but hasn’t made it to the House floor.

Groups that advocate for greater autonomy for the city pursued the referendum as a way to give the city additional rights without having to persuade a gridlocked Congress.

Congress made no effort to overturn the referendum, but it’s rare for Congress to pass resolutions disapproving of district laws. Rep. Ander Crenshaw, R-Fla, who chairs an appropriations subcommittee, asked the GAO to weigh in.

“We conclude that the provisions of the Budget Autonomy Act that attempt to change the federal government’s role in the district’s budget process have no legal effect,” Susan Poling, the GAO’s general counsel, wrote in the opinion.

The city would violate the Antideficiency Act, a law dating to the 19th century that prevents federal agencies or employees from spending money they don’t have, if it began spending its budget without a Congressional appropriation, Poling wrote.

The committee concurs with the GAO’s findings, said Jennifer Hing, a committee spokeswoman. House Republicans had previously called the referendum “an expression of the opinion of the residents, only.”

Kimberly Perry, executive director of DC Vote, one of the groups that pushed for the referendum, said the GAO has no authority over the district government, and she urged the mayor to follow “the will of the people” and enforce the measure.

Norton said in a statement that she would continue to defend the referendum while working to pursue budget autonomy legislation. She said she believes such a bill could pass this year.

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