Can you believe, District Dime readers, that the Big Day ‘ the vote on the fiscal year 2012 budget ‘ will be upon us tomorrow? We are crossing our fingers that Chairman Brown will share his final budget proposal sometime today, giving all of us at least a little time to review it. (We appreciate that the Council’s budget office is working diligently to meet that goal.)
While waiting for that, you should know that one of the huge issues to be discussed tomorrow is how to use revenues that are likely to be identified after the budget is adopted. DC’s CFO will release new revenue forecasts in June and September, and it is widely expected that they will show an increase in revenue collections due to an improving economy.
The decisions over how to use those funds ‘ to restore budget cuts, add to the city’s savings, or reverse tax increases ‘ are incredibly important. Here’s how the DC Fiscal Policy Institute thinks additional revenues should be allocated:
- Move expenses from the capital budget to the operating budget: The Council is likely to vote tomorrow to keep some expenses in the capital budget that really belong in the operating budget. If additional resources are identified in June, the Mayor and Council feel that additional resources should be used first to move all expenses to the operating budget — and we agree.
- Put aside a little in saving. DC’s fund balance has fallen in recent years, as the city used reserves to maintain services during the recession. Dr. Gandhi and the Council Chairman think it is time to start building it back up. DCFPI agrees, sort of. We think that there are other more pressing issues right now ‘ like preserving services that have been cut ‘ and we think the city’s fund balance will grow based on plans the Council adopted last year. Chairman Brown wants to save half of all new revenues, but we think the figure should be much smaller, since any amount will show the city is moving to build savings.
- Restore budget cuts. DC residents overwhelmingly say that protecting services is very important to them ‘ and that they are concerned about cuts to services like mental health and disability assistance. The additional revenues should be used as much as possible to restore cuts to things like Interim Disability Assistance, the Housing Production Trust Fund, victim’s services, mental health services, and child care.
- If anything is left, cancel the proposal to increase income tax withholding. Mayor Gray’s budget would require additional income taxes to be withheld from every working DC resident, even though most of us already get tax refunds (meaning that our withholding is already adequate, thank you). This proposal has received much criticism but has not been addressed due to its $41 million price tag. If we have the money to fix it, we should.
This plan promotes fiscal responsibility, protects services that residents want and need, and could even ease the tax crunch for working DC residents. What’s not to love about it?
