ANNOUNCING PLANS for a hearing on District finances, a House subcommittee pointedly mentioned the federal control board that oversaw city spending in the mid-90s. The reference to one of the most embarrassing periods in D.C. history may be good politics — and it’s enough to raise worries that a Republican majority that’s been unabashed about meddling in city affairs will meddle further. But if Congress allows itself to be guided by facts and the judgment of experts, it will loosen, not tighten, its control over the city’s budget.
The city’s fiscal 2012 budget is ostensibly the subject of Thursday’s hearing before the D.C. subcommittee of the House Committee on Oversight and Government Reform. Such hearings have traditionally been the domain of the Appropriations Committee, so there’s speculation about a broader inquiry into city affairs. D.C. Mayor Vincent C. Gray (D) and D.C. Council Chairman Kwame R. Brown (D) — currently the subjects of separate controversies — have been called to testify. Without diminishing the seriousness of concerns over Mr. Gray’s hiring decisions or Mr. Brown’s campaign finances, it’s important to distinguish those issues from the city’s fiscal health.
On that score, there’s no question. In testimony prepared for Thursday’s hearing, Alice M. Rivlin, senior fellow of economic studies at the Brookings Institution, details the city’s journey from “a financial basket case to a responsibly managed and fiscally healthy city.” As chair of the federal control board, Ms. Rivlin had a close view of city finances, and she believes D.C. residents and officials learned their lessons: “For more than a dozen years, D.C. has been a model of fiscal responsibility.” Matt Fabian, managing director of the independent research firm Municipal Market Advisors, said the District operates in “a highly conservative manner” with a strong financial management team and institutionalized financial controls. Even as the economy struggled, he found the District faring better than most other cities and states.
Ironically, one problem highlighted by Mr. Fabian was the recent possibility of a federal shutdown. Because the city’s budget is tied to federal appropriations, its day-to-day functions as well as its ability to make a June credit payment of $240 million would have been threatened. In fact, Mr. Fabian suggested that Congress loosen its federal oversight requirements. Pending before the committee since January is a bill by D.C. Del. Eleanor Holmes Norton (D) that would give the city control over its own, locally raised tax dollars. Prepared testimony by D.C. Chief Financial Officer Natwar M. Gandhi details how, because of congressional restrictions, the District is not able to react as “swiftly, appropriately or effectively as possible to meet the needs of residents and visitors.” If Congress is serious about the city’s fiscal viability, it would give local officials the tools they need to manage the city’s money.
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