D.C. Council rejects tax hike, backs welfare cuts to close gap

By Tim Craig
Wednesday, December 8, 2010

The D.C. Council approved a city spending plan Tuesday that avoids higher taxes but includes far-reaching efforts to control spending on welfare programs, including a controversial move to start cutting off direct assistance after five years.

On a day that saw public protests at the John A. Wilson Building and sparring among council members over the city's obligation to care for its neediest residents, the council passed a series of amendments to close a $188 million shortfall in the current fiscal year's budget.

The vote is viewed as a warm-up to negotiations in the spring over the fiscal 2012 budget, when council members and Mayor-elect Vincent C. Gray (D) will face a projected $440 million shortfall. And although the council refrained from raising taxes Tuesday, most members agree that the debate to come will not be about whether to raise taxes but on whom and by how much to raise them.

"The District of Columbia is in desperate straits.. . . The Grim Reaper is at the door," said Gray, the council chairman. "There is hard work that needs to be done at this stage to make this city fiscally solvent."

The District has fared better than many other cities during the economic downturn, but city leaders say the slow pace of recovery has caught up with the city as sales and income tax proceeds decline.

As the council refined cuts proposed by Mayor Adrian M. Fenty (D) in late November, Tuesday's budget session offered a glimpse into how Gray would govern as mayor. He will be sworn in Jan. 2.

Gray fended off efforts to raise taxes, and he had money restored for job training, healthy school lunches, early-childhood education and cleanup crews that serve commercial areas outside downtown. The council can make additional changes to the budget when it meets in two weeks.

Gray also showed a willingness to tackle two areas that in the past have escaped the budget ax: money for city schools and the federal-local Temporary Assistance for Needy Families welfare program.

Fenty - along with former schools chancellor Michelle A. Rhee - has been fiercely protective of school funding, but Gray persuaded his colleagues to put $31 million of the system's $758 million annual budget in a reserve fund until school officials can prove that it's needed. Gray said his approach is a sign that he wants to "scrub" the school budget for potential savings in the coming years.

Gray, who headed the city's Department of Human Services in the early 1990s, stunned advocates for the poor by pushing through a proposal to gradually cut welfare benefits for residents who have been in the TANF program for more than five years.

Following the lead of council members Marion Barry (D-Ward 8) and Yvette M. Alexander (D-Ward 7), who suggested that the welfare program needed to be reigned in, Fenty proposed in November a 20 percent cut in the monthly benefit of anyone in the program for more than five years. About 40 percent of the 17,000 city families enrolled in the program have been receiving benefits for more than five years. They receive an average of $370 a month.

But Gray slipped an amendment into the budget that would greatly expand the cuts, which could force thousands of residents off the rolls. Under Gray's plan, starting next year, a recipient in the program five years or longer would lose 40 percent of the monthly benefit, and the cut would grow to 60 percent in fiscal 2013.

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