D.C. Schools Might Snare Tax Windfall

"It's unlikely that this kind of scenario will continue," Jack Evans (D-Ward 2), chairman of the council's Finance and Revenue Committee, said of the surplus. "Clearly, paying down our debt is the number one [use] that our finance advisers recommend."

Phil Mendelson (D-At Large) agreed.

"I pray to God we don't spend it all," he said. "We need to reduce our borrowing. These windfalls from revenues should be used for capital investment."

Fenty is under pressure to deliver on his pledge to improve the struggling school system, his top priority. He took direct control of the schools away from the Board of Education in June, fired Superintendent Clifford B. Janey and appointed Rhee as chancellor.

During his campaign for office last year, Fenty said the school system, which has a budget of almost $1 billion, did not need more money. Rather, he said, the system must eliminate waste and spend its budget more wisely. Despite lobbying by Janey in the spring, Fenty declined to increase the schools budget for fiscal 2008.

Fenty wants $12 million of the surplus to upgrade school facilities, part of a $120 million "school stabilization" program announced last month by school construction chief Allen Y. Lew. (The remainder of the stabilization funds have been earmarked through existing resources, administration officials said.)

Also, the mayor's proposal would use about $17 million for the central office restructuring plan -- $7 million for severance packages and $10 million for back pay owed to some employees.

In the next few weeks, Fenty and Rhee plan to ask the council to suspend personnel laws so Rhee has the legal authority for her restructuring effort.

Staff writer Nikita Stewart contributed to this report.