You may not know it, District Dime readers, but this is a really important week for the shaping of DC’s Fiscal Year 2013 budget.
Mayor Gray will release his budget on March 23rd. He and his staff need to finish their work ‘ so-called “pencils down” ‘ around March 13th in order to get the budget finalized by that date. This means that many key decisions on how to meet the city’s most pressing needs while presenting a balanced budget will occur over the next week.
This week’s District Dime will focus on the options that are likely to be laid out for the Mayor, and how we hope those discussions will go.
So what do we know so far?
Budget Gap: $164 million. The city’s budget director explained last week that DC faced a gap of about $200 million between the cost of maintaining current services and expected revenues. This reflects a widely reported $150 million gap, plus $50 million due to recent audits showing rising school enrollments. A new revenue forecast from Dr Gandhi last week showed $36 million in additional revenues, bringing the gap down to $164 million.
Many agencies will be lucky to get inflation increases. The starting point for every DC government agency’s budget will be its “current services funding level,” reflecting what it needs to support existing programs. In many cases, this mainly means an inflation adjustment. Given DC’s tight resources, agencies should consider themselves lucky to get even this. Mayor Gray already announced he will provide a two percent inflation increase in the “Uniform Per Student Funding Formula” used to fund DC Public Schools and DC Public Charter Schools.
What options will be on the table? The Mayor’s challenge will be to decide where to trim agency budgets below their inflation-adjusted mark and where to raise revenues to limit the need for cuts. If he is really lucky, the Mayor will identify options that save money without having to reduce services or raise revenues. But those are hard to come by.
These are the tough choices that government leaders must make. Last year, Mayor Gray’s budget reflected a reasonable balance of program cuts and revenue increases, but a closer review of the service cuts shows they fell especially hard on low-income residents. At last week’s forum co-sponsored by DCFPI, the Fair Budget Coalition, and Think Twice Before You Slice, the Mayor’s budget director suggested that his boss probably won’t propose rate changes for the city’s major taxes, and that cuts to public safety and education are difficult to make. Does this mean that another round of cuts to low-income programs is in store?
DCFPI certainly hopes not. We support the idea of a balanced approach, one that spreads the pain of service cuts as broadly as possible and that relies on a mix of revenue increases and cuts to public services.
Stay tuned as we explore these topics in more detail.
