Mayor Gray has budget on the brain ‘ for good reason. One of his last acts as DC Council Chairman was to approve a large package of spending cuts, from social services to public works to public safety. Now as mayor, he faces an expected $400 million shortfall between resources and expenses for the coming year.
And already Mayor Gray has been pressed to say whether he will consider tax increases to tackle DC’s budget problems. Gray appears open to new revenues, although new Council Chairman Kwame Brown seems less inclined.
We agree with Mayor Gray that tax increases should be part of a balanced approach to the downturn. The real question is not about taxes but about services: Is the District collecting enough to provide the services that residents desire and to keep the city moving forward?
The answer is a clear “no.” The recession has pummeled the city’s tax collections. DC’s budget for this year is about $700 million lower than just a few years ago, reflecting multiple rounds of cuts affecting every part of DC government. The expected shortfall for the 2012 budget, which Gray must address over the next few months, could put even more important initiatives at risk.
This includes many efforts that DC residents support and want to keep going ‘ investments in public schools and public charter schools; new aquatic facilities, ballfields, and libraries; streetcars; and a health system that has reduced our uninsured rate to one of the lowest in the nation. These do not come cheap and cannot be maintained in the face of falling revenues.
There also are many looming challenges Gray mentioned in his inaugural address, including an “educational achievement gap that is simply unacceptable,” a “record unemployment rate,” and “too many families that feel unsafe in their own neighborhoods.” Those require resources, too, in addition to sound management.
How Mayor Gray approaches his first budget will be a defining moment of his first year. We think he is right to keep his eye on maintaining important services and attacking DC’s high unemployment, and to be open raising revenues to help offset the huge drop in tax collections caused by the recession.
Over the next few months, we look forward to a vigorous and open dialogue about the District’s tax system — how it can be modernized, how various leaks and holes can be plugged, and how it can be shaped to meet the resource needs of the city at this important time.
