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Posted at 12:03 PM ET, 09/27/2010

Gandhi delivers grim news: Another $175 million shortfall

Sales tax revenue in the District has fallen dramatically, helping contribute to more bad budget news for the D.C. government, Chief Financial Officer Natwar M. Gandhi told officials Monday morning.

The city's revenues for fiscal year 2011, which begins Friday, are estimated to be off by $100 million, primarily because of a drop in sales and income taxes. Gandhi met with Council Chairman Vincent C. Gray (D) and Council member Jack Evans (D-Ward 2) Monday morning with his estimate.

Other contributors to the projected $175 million deficit include about $25 million in cost overruns by D.C. Public Schools and at least a $33 million shortage in Medicaid funding due to cuts by Congress.

"It's much worse than we thought," said Evans, chairman of the Committee on Finance and Revenue.

Gray, who defeated Mayor Adrian M. Fenty in the Democratic primary, is considered the presumptive mayor in the heavily Democratic city and will probably try to tackle the problem. But Fenty, who remains mayor until January, is responsible for presenting the council with a plan to address the shortfall.

By Nikita R Stewart  |  12:03 PM ET, 09/27/2010

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