Since Mayor Vincent C. Gray pocket-vetoed the D.C. Council’s decision to delay a new tax on municipal bond proceeds last week, he’s taken it on the chin from legislators, starting with Chairman Kwame R. Brown.
Gray punched back today in a seven-page letter presenting five “clarifications” to veto objections lodged by Brown and other council members. Though Gray begins by saying he does “not want to engage in a back-and-forth exchange of letters,” the missive is unusually aggressive.
In the letter, Gray presents the veto as necessary to preserve the District’s reputation on Wall Street. Gray said in an interview with the Post’s Nikita Stewart earlier Monday that the letter was necessary to help Brown understand that “the fundamental issue is around our bond rating.”
“Did you see what happened with the bond ratings lately?” he asked.
More specifically, the letter touts Gray’s own fiscal bona fides and pushes back on Brown’s contention that it was the council, not Gray, that moved decisively to replenish the city’s savings, which the bond tax delay would sap.
”Under every scenario,” Gray wrote, “the budget proposed by the Executive would have resulted in more dollars flowing into the fund balance, by law, than the equivalent budget approved by the Council.”
Gray also fought Brown’s notion that the relatively piddling amount of money at stake — about 0.2 percent of the local funds budget — would not vex Wall Street. It’s not the amount, he argues, but the fact that city leaders promised raters to rebuild the savings in a particular way.
”Dr. Gandhi and I feel that taking $13.4 million from the Cash Flow Reserve sends the wrong symbolic message that the District is not dedicated to keeping its financial commitments,” he wrote. “This symbolism is critical to both our reputation and our ratings.”
Gray relayed this message from bond raters: “[I]f you propose something, then you need to be prepared to stick with what you proposed, because if you don’t keep your commitment, we will never believe you when you make the promise again.”
The council’s decision to “change its mind in only a month and a half appears to be erratic,” Gray continued, “and does not portray the steady and firm approach that I believe we need to send to Wall Street.”
Gray also got personal in the letter, responding to claims from Brown and Mary M. Cheh (D-Ward 3) that he had “ambushed” lawmakers with the veto. He pointed out he’d not only made his feelings plain in letters delivered prior to previous budget votes, but Gray said he had lengthy meetings with Brown last Tuesday, before the veto deadline.
He signed off with a conciliatory note: “I ... hope that this debate only strengthens our collective resolve to strengthen the District’s financial health.”
The full letter:Gray letter to Brown on Pocket Veto