Election season is usually filled with hope and promises, but yesterday we received a major dose of reality. In a morning meeting with the District’s Chief Financial Officer, DC Council Chairman Vincent C. Gray’who will likely be our next mayor given his victory in the Democratic primary’learned the District faces a $175 million shortfall for upcoming Fiscal Year 2011. The good news is that Gray has been thinking about how he would manage DC’s budget if elected, and our presumptive mayor has said he will consider both revenue increases as well as cuts in services to balance the budget.
Today, DCFPI sent Chairman Gray a letter applauding this balanced approach.
Though a budget gap was not unexpected, the nearly $100 million drop in revenues was a distressing sign that the sluggish national economy continues to impact the District. The declines are in two of our three biggest revenue sources: sales taxes and income taxes. People are making less and spending less, which means the District has less money, too.
Right before the September 14 primary election, Gray spoke to the Washington Business Journal about his approach to dealing with the expected budget gap. He said he wanted to look “very closely at reductions” and also at “any revenue options.”
As the Chairman emphasized in his campaign’s jobs and economic development plan, high unemployment is a “ticking time bomb” that has a harmful, cascading effect not only on individuals but on the city as a whole. Unemployment corrodes our tax base, strains our social service capacity, and limits what people spend at our local and small businesses. Right now, nearly one out of 10 residents across the city seeking employment can’t find a job. Even those who are working want training and resources to help get better paying jobs. We cannot meet our workforce development needs through a cuts-only approach to budget shortfalls.
To help us get through this crisis and move toward recovery, it’s important for the District to maintain and enhance crucial investments in areas such as workforce development, education, human services and affordable housing. Of course, we need to trim where we can. But DC’s budget has been cut back sharply during this painful recession. As Chairman Gray noted in the Business Journal, there’s not one single way to solve a problem this big. Revenue increases need to be a part of the discussion and solution.
We congratulate Chairman Gray both for his election victory and for his balanced approach to our tough fiscal challenge. We will be talking more in upcoming weeks about revenue solutions, and we look forward to working with the Chairman, as well as Mayor Fenty and the entire DC Council, on making them a critical part of our budget-balancing approach.
