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CITY FINANCES

Mayor Will Press for Stimulus Money

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D.C. Delegate Eleanor Holmes Norton, the city's chief financial officer Natwar M. Gandhi, and D.C. Council Chairman Vincent C. Gray talk about the release of a report by the D.C. Appleseed Foundation, which asserts that despite 11 years of balanced budgets, the District still has a financial structural problem and needs more federal assistance. Video by Hamil Harris/The Washington Post

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By Theola Labbé-DeBose and Hamil Harris
Washington Post Staff Writers
Friday, December 12, 2008

D.C. Mayor Adrian M. Fenty plans to press federal officials for money for the District from the economic stimulus package that President-elect Barack Obama and federal lawmakers are discussing.

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"We are preparing to ask for money from the stimulus, and we're putting together a package right now," said mayoral spokeswoman Mafara Hobson. Hobson said more details on the needs outlined in the city's request would be released in the next several days.

The news of Fenty's plans comes as states are analyzing their budgets and compiling wish lists amid job losses and shrinking tax revenue in the declining economy.

Fenty's announcement came on the heels of a report released yesterday by the nonprofit group D.C. Appleseed, which is calling on the incoming administration to offer the city more financial help. The report focused on the District's unique status as a local and federal city, which means it must shoulder extra financial responsibilities.

Walter Smith, Appleseed's executive director, said the report, which has chapters written by experts on the District's finances and history of governance, had been underway for more than a year. Smith said the national discussion of bailouts for Wall Street and U.S. automakers presents an opportunity to discuss the District's fiscal needs.

"The federal government is poised to invest billions in infrastructure in a number of jurisdictions across the country, and the District of Columbia has as strong a case as" anyone else, Smith said.

But Smith outlined some of the report's findings about what makes the District's financial picture unique. The city funds programs that usually are run on the state level -- child welfare, public assistance and Medicaid, for example -- but has a smaller tax base upon which to draw.

It also has federal restrictions and responsibilities. For example, the city is barred by Congress from taxing the U.S. government, which occupies more than 40 percent of D.C. land.

Those responsibilities lead to revenue shortfalls, Smith said. According to a Government Accountability Office report, the District's obligations translate into a "structural deficit" of $1 billion annually.

Fenty (D), Del. Eleanor Holmes Norton (D-D.C.), D.C. Council Chairman Vincent C. Gray (D) and council member David Catania (I-At Large) attended yesterday's news conference.

Local lawmakers have appealed to both Democratic and Republican administrations to assist the District. In 1995, when the city's $335 million budget deficit led Congress to impose a federal governing board, Norton appealed to then-Speaker of the House Newt Gingrich, who, after attending a community meeting at Eastern High School, pledged that he would help make the District "the best capital city in the world."

Two years later, President Bill Clinton signed the Revitalization Act, and eased some of the District's funding issues by pledging more federal aid for some programs. The District eventually produced 11 years of balanced budgets.

But the Appleseed report notes that the city is back where it was when it was bankrupt -- appealing to federal officials to recognize the District's status and its financial burdens.

Obama transition spokesman Nick Shapiro said the team is "receiving input from mayors and governors in shaping the [stimulus] plan."

The report is available online at http://www.dcappleseed.org/newsandupdates/.


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