Williams Submits His Final Budget

Plan Trims Income Tax, Boosts Schools, Libraries

In his final budget, D.C. Mayor Anthony A. Williams offered a $7.5 billion spending plan yesterday that would stabilize local expenses at just under $5 billion, proceed with a planned cut in income taxes and devote significant new funds to public schools, city libraries, housing programs and police pay raises.

The budget includes few major innovations, a stark contrast with last year, when Williams (D) unveiled a series of initiatives to rebuild poor neighborhoods, revitalize city thoroughfares and find jobs for D.C. residents.

But the mayor would continue funding for those programs while making small increases elsewhere. For example, he would pay for dental care for the first time for poor adults and expand Medicaid coverage to hundreds of children in working families, a move city officials termed "historic."

Williams's budget calls for no broad-based tax increases. However, the mayor is seeking to boost tax revenue on residential home sales by $47 million by raising the deed recordation fee to 1.5 percent, from 1.1 percent. And he would nearly double the fee for 911 emergency service by increasing the monthly charge on D.C. phone bills to $1.45, from 76 cents.

Williams called the package "one of our strongest budgets ever," saying it would rein in government growth while funding "targeted investments" in programs District residents have identified as priorities.

"I think we've accomplished a lot in the city," Williams told reporters during a briefing at the John A. Wilson Building. "We've embarked on a huge, ambitious portfolio of activities, particularly last year in the State of the District [address]. And I thought it was important to just live up to the commitments we've already made before . . . we do new things."

Given the absence of sweeping proposals, Williams said, he will not make a final State of the District speech. Instead, the mayor, who is not seeking reelection, said he will deliver a "wrap-up message" before he leaves office in January.

Members of the D.C. Council gave the budget a polite reception. Council Chairman Linda W. Cropp (D-At Large) praised the mayor for increasing education funding, including an expected $223 million for school modernization. "On the whole," Cropp said, "I think it's a budget we can embrace."

But in a year when seven of 13 council members are seeking higher office or reelection, council members made clear that they want some changes.

Cropp, who is running to succeed Williams, said she worries that the mayor's plan to raise the deed recordation tax would hamper first-time home buyers. Cropp said she would urge an exemption to the tax increase for houses that cost less than $500,000.

It was unclear yesterday how such an exemption would affect revenue from the tax increase, which the mayor proposes to use to fund recommendations from a housing task force, including expanded rental assistance, new housing for middle-class buyers and the homeless, and the designation of a coordinator to oversee housing programs.

Other council members criticized Williams for failing to expand the police force. Although the mayor's budget would devote an extra $66 million to the police department, most of it would go toward pay raises of up to 5 percent a year, officials said. Council members Phil Mendelson (D-At Large), Jim Graham (D-Ward 1) and Vincent B. Orange Sr. (D-Ward 5) said they would seek money for more officers.

Orange, who also is running for mayor, said more housing, better schools and more economic development "means nothing without being protected."

Adrian M. Fenty (D-Ward 4), the third council member running for mayor, said Williams's final budget lacks vision. "It just seems to take last year's programs and figure out how we can pay for them instead of analyzing what programs are needed," Fenty said.

Others were more charitable. Ed Lazere, executive director of the D.C. Fiscal Policy Institute, praised Williams's decision to embrace the housing task force recommendations. John Hill, chairman of the mayor's library commission, thanked Williams for proposing an infusion of cash to renovate neighborhood libraries, expand their collections and extend their hours.

And council member David A. Catania (I-At Large) called the proposed expansion of the city's Medicaid program "one of the most exciting things I've seen in the District of Columbia in terms of health care."

Currently, the city pays for dental coverage only for children covered by Medicaid, not adults, Catania said. And the city pays for Medicaid medical coverage only for children whose parents earn less than 200 percent of the federal poverty level, or $44,000 for a family of four.

Under the mayor's budget plan, that limit would be raised to 300 percent of the federal poverty level, or $66,000 for a family of four, making the District one of the most generous jurisdictions for children in the nation, Catania said.