A Balanced Budget for D.C. Now, But What About Fiscal 2013?
This week, the D.C. Council met at its annual retreat to review legislative priorities, receive briefings from various officials and make plans for the coming year. We also recently received the audit of the fiscal 2011 budget – known as the Comprehensive Annual Financial Report (“CAFR”), an event of particular interest to me as Chair of the Council’s Committee on Finance and Revenue.
First, the good news from the fiscal 2011 CAFR: the District sustained its 15th annual balanced budget and unqualified “clean” audit. In short, our finances today are a far cry from the desperate straits we faced in the mid-1990s. The audit also confirmed we have no “material weaknesses” (we had two in fiscal 2008) and reduced our “significant deficiencies” from five to two. I am glad we have made meaningful progress on our internal control systems. Every year, the District spends millions of dollars on various audit functions – not only the CAFR, but also the operations of the D.C. Auditor and the Office of the Inspector General. A few years ago, we decided to pool all this information more systematically and bring in under-performing agencies to submit remediation plans to correct the deficiencies. This new approach has begun to pay off.
We finished fiscal 2011 with a surplus of nearly $240 million, which now resides in our savings accounts. While I am glad that our financial position remains so strong, this surplus has caused a lot of anger among the hundreds of thousands of District residents who were asked to pay a number of new taxes and fees in last year’s budget, which I voted against. Before we rush to spend this money on an ever-expanding government, I think we need to take a hard look at making more sustainable spending choices. We have already received briefings on the status of the current fiscal 2012 budget by Mayor Gray and are expecting the upcoming fiscal 2013 budget submission from the mayor in late March. While we have a windfall now, indications are that the mayor will seek to spend all of this money and more to address potential gaps in the budget if he does not begin to spend within his budget.
Every year, seemingly, we face “spending pressures” in the middle of the fiscal year. As it is February, the mayor has the opportunity to review these problems and take corrective action so that we end fiscal 2012 with a balanced budget. A more difficult challenge will be the work of the mayor and the council to balance the fiscal 2013 budget. Unfortunately, the government has built in cost increases every year, so that we pass the biggest budget in our history each year in spite of the difficult economic climate. No other state goes through recessions without making tough spending choices as a result. Clearly, this spring we will have some very serious challenges facing us and many tough decisions to make. I hope that with your help we can convince the mayor and my colleagues to find efficiencies within existing agency budgets by making tough choices rather than simply increasing taxes every year.
Before the budget is released, we first go through the performance oversight process. Over the past two weeks, I have sent a number of questions to the agencies under my purview to collect data on agency structure and recent spending. After I review what has worked and what has not, I will be in a better position to make recommendations on adjustments to the agency budgets for next year. Thanks for your support during this process, and please feel free to contact my office as well as to my colleagues to share your views.