Fenty Proposes A Pared-Down Budget Increase

Mayor Adrian M. Fenty requested a 0.7 percent increase in local funds, far less than previous boosts.
Mayor Adrian M. Fenty requested a 0.7 percent increase in local funds, far less than previous boosts. (By Bill O'leary -- The Washington Post)
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By David Nakamura
Washington Post Staff Writer
Friday, March 21, 2008

D.C. Mayor Adrian M. Fenty yesterday proposed leaving about 550 government jobs unfilled and scaling back a recently approved commercial property tax cut as part of a 2009 budget request that dramatically curtails the spending increases of recent years.

In his submission to the D.C. Council, Fenty (D) requested $5.66 billion in local funds, an increase of 0.7 percent over this year's budget of $5.62 billion. That is a sharp belt-tightening move for a government accustomed to increases of up to 8 percent a year in the past five years.

Fenty's proposal aims to meet the constraints announced several weeks ago by D.C. Chief Financial Officer Natwar M. Gandhi, who said that the city faced a $96 million shortfall because of declining sales, income and deed taxes. Gandhi said yesterday that the mayor's proposal, which includes fee increases for emergency 911 services and basic business licensing, is balanced.

Fenty said he challenged agency directors to provide more services with fewer resources.

"The burden used to be on someone else to prove that the government did not need more money -- that's a ridiculous burden," Fenty said at a news conference. "The burden should be on us to prove to the citizens that we do need the money. There has got to be some hard work by the agency directors, and they are more than up to this."

Council members, who received the budget yesterday morning, had little time to review it, but their initial reactions were favorable. Seven of the 13 members joined Fenty at the news conference, and two sent statements of support.

"Over the past decade, our flush budgets have postponed tough decisions," said David A. Catania (I-At Large). "This exercise has resulted in thought about how to produce a more efficient, leaner budget that ultimately will produce more results."

Fenty has proposed a $773 million budget for D.C. public schools, which is about the same amount as this year for the 50,000-student system. Administration officials said $532 million would be allocated directly to the 141 schools, up $39 million from this year.

Fenty would fund a previously approved increase in the number of police officers from 3,800 to 4,200 next year.

The budget also allocates $61 million to building and preserving affordable housing. In July, Fenty told the Washington Interfaith Network, an advocacy group, that the city would commit $117 million to housing. His aides said that the pledge was never intended to be fulfilled solely through city operating funds and that the mayor would bridge the gap by dedicating city-controlled land and other resources.

The cost of a business license would double to $35 a year, and each phone line would be assessed an additional 23 cents for 911 services. The revenue projected from those increases is about $6 million.

Ed Lazere, executive director of the D.C. Fiscal Policy Institute, gave the mayor credit for a "sincere effort to find efficiencies and not cut services."

City Administrator Dan Tangherlini, who oversaw the budget preparation, said that about 1,000 government jobs are vacant. Under the budget proposal, the administration would leave 412 "non-critical" positions unfilled and hold 140 open slots in a "job bank" for agencies that would have to make a case for additional employees. The eliminations would save the city about $36 million in fiscal 2009, Tangherlini said.

He said the administration is not cutting staffing in schools, police and fire agencies. And no positions for correctional officers, social workers, nurses, sanitation workers or other front-line workers would be eliminated, Tangherlini said. The agencies that would be subject to the most cuts are public works (109 positions eliminated), motor vehicles (78) and mental health (61).

Fenty and Tangherlini said the downsizing of positions in the budget is unrelated to the early retirement program the administration announced in January, which could affect hundreds of workers. But they said agency directors will be expected to be mindful of both initiatives as they reprogram departments.

The administration has also proposed altering the commercial property tax cut that the council approved in January, phasing it in over three years and adjusting the tax rates.

Under the council's plan, all city businesses would be taxed 91 cents per $100 of assessed value on the first $3 million of the value of their properties. Above that, the standard $1.85 rate would apply. The plan was projected to save businesses about $96 million next year.

Under Fenty's plan, the tax rate for larger commercial properties would drop from $1.85 to $1.80. Properties assessed at $3 million or less as of Jan. 1 would see their tax rate reduced by 15 cents a year until 2011. That would mean a decline from $1.85 per $100 of assessed value to $1.70 to $1.55, and then to $1.40. That plan would save the businesses about $15 million next year and more than $100 million over three years, Tangherlini said.

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