Earlier this week, we talked about how the District found itself in a $200 million hole in the current fiscal year. The Mayor’s plan to close that gap is to restructure debt (a $50 million savings), take $100 million from a variety of special funds that are running surpluses, and reduce spending in 40 agencies by $99.4 million.
Is this the right approach?
Broadly, yes. Taking a balanced approach that involves both revenues and budget cuts makes sense. But there are questions about where the surplus funds come from, and the way the agency cuts were made is questionable.
DC’s budget includes too many small, specialized funds. Taking unspent funds from them may make sense, but it is really important to know which funds these monies are being pulled from. Many special purpose funds support critical District services such as workforce development training and repairs to apartment buildings to bring them up to code.
The $99 million of cuts are tied to agencies where current spending is below the approved budget. In other words, an agency that was under-spending in the first quarter of the year had its budget cut for the entire year. Sounds pretty good, right? An agency isn’t spending all of their funds so maybe they just don’t need all the money. Well, it turns out to not be that simple. A review of the cuts shows that in some cases the funding actually was very critical.
For example, $3 million was cut from the Department of Human Services budget, despite the fact that this agency has been overwhelmed with people that need the government’s help amid record unemployment in the District. Previous cuts have already forced the agency to close two front-line service centers and eliminate nearly 100 front-line positions. The cuts also include $6 million to the DC Department of Employment Services, which is likely to force the agency to eliminate a new adult training program. When one in eight DC residents is out of work, does it make sense to take money from programs that might help them get a job?
This raises the question of why the cuts were made this way. They don’t appear to reflect strategic policy choices. What is clear is that many of these cuts have real impacts for DC residents. Wouldn’t it be better for the Mayor to decide how to pare back services based on an established set of priorities?
These are important issues as DC continues to struggle with the worst recession in decades and as Mayor Fenty and the DC Council prepare to craft a new budget for next year. Of course, budget cuts will need to happen. The goal should be to make cuts as wisely as possible ‘ maintaining programs to keep residents who’ve encountered turbulence during the recession at a cruising altitude along with preserving services most important to the city’s quality of life and long-term health.
