It's time for D.C. to make some tough budget trims

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Wednesday, September 29, 2010

THE DISTRICT STARTS a new fiscal year Friday with the sobering news of a $175 million shortfall. It's clear that spending cuts will need to be made -- and the sooner, the better. It's critical that outgoing Mayor Adrian M. Fenty work closely with the man expected to succeed him, D.C. Council Chairman Vincent C. Gray, to meet the looming challenge.

Chief Financial Officer Natwar M. Gandhi this week released revenue projections showing a dramatic drop in sales and income tax collections. Adding to the bleak fiscal picture is an unexpected loss in federal Medicaid funding and possible spending pressures in special education and the city's takeover of United Medical Center. Lest officials think there's an easy solution to the problem, Mr. Gandhi pointedly warned that the city's emergency funds are at "rock bottom." In other words, the decisions that were put off by Mr. Fenty as he ran for reelection -- and enabled by Mr. Gray and the council -- can no longer be delayed. The city's depleted reserves are no longer available as a cushion to support unaffordable spending.

There's no doubt that the transition in administration from Mr. Fenty to Mr. Gray complicates the picture. Mr. Fenty must recommend a balanced budget, but it is Mr. Gray whom voters elected to set next year's spending priorities, and it is the council that will have the final say. Mr. Fenty might be tempted to punt the hard decisions to the council, but he's uniquely positioned to offer guidance on where cuts can be made. Not only should he know where the government fat is, but his lame-duck status affords him the luxury of making recommendations without regard to political consequences.

Clearly, though, the buck falls to Mr. Gray in his dual role as chairman of the council and presumptive next mayor. How does he balance the expectations of his supporters against the realities of the city treasury? Will he opt to downsize government or, as some are suggesting, push to raise taxes? Cuts are less painful if they are spread out over a whole year, so it's important that whatever decisions are made be implemented well before January, when Mr. Fenty leaves office and Mr. Gray is expected to be sworn in as the city's next mayor.

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