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Posted at 06:02 PM ET, 10/05/2010

Gray predicts $350-$400 million shortfall

D.C. Council member Vincent C. Gray (D), the presumptive mayor, predicted today that he and the other council members will have to close a $350 million to $400 million shortfall before they approve the fiscal 2012 budget next year.

Gray's prediction, on top of the $175 million gap in the existing year's budget, is likely to renew talk of massive spending cuts or higher taxes.

On Monday, Mayor Adrian M. Fenty (D) issued a hiring freeze and announced that many agencies will have to cut parts of their budget by about 10 percent to try to prevent the shortfall from worsening. On Tuesday, the council voted to impose similar reductions in its budget and that of independent executive branch agencies that receive local funds.

But Gray stressed to his colleagues that difficult choices will have to be made in the coming weeks. The more they cut from the budget this year, Gray said, the less difficulty they face next year when they agree on a fiscal 2012 spending plan.

"It will certainly make it easier if you make the decisions in (fiscal) 11," Gray said. "It will also help (fiscal) 13 and 14."

Gray is refusing to rule out layoffs or a tax increase. He will become mayor in January if he wins the Nov. 2 general election. In the coming days, he may have to decide whether he prefers to raise taxes or pursue layoffs this year, while he's chairman, or whether he wants to wait until next year as mayor.

When a reporter asked Gray whether it would be smarter politically to pursue a tax hike as chairman or mayor, he replied, "that depends on whether I want to raise taxes at all."

"My first choice is I want to look at expenditures," Gray said.

-- Tim Craig

By  |  06:02 PM ET, 10/05/2010

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