D.C. still haunted by federal takeover

Washington Post Staff Writer
Monday, January 31, 2011

He once called it a "rape of democracy."

But ask Marion Barry now whether the federal government's move to take control of the District government was good for the city, and the mayor who watched it happen sees things differently.

"Under the circumstances, yes, it was," said Barry, a D.C. Council member (D-Ward 8). The financial control board "was able to do some things that needed to be done that, politically, I would not do, would not do, would not do" - for example, ordering the firings of about 2,000 human-service workers.

The District faces the most politically difficult budget decisions since that era, and officials are contending with the legacy of the most humiliating episode in the city's 36 years of home rule. From 1995 to 2001, day-to-day management of most D.C. functions was wrested from city officials and placed in the hands of a five-member federally appointed panel.

The financial control board might be gone, but the prospect that it could be resurrected is figuring prominently with some city officials.

"The grim reaper is at the door, and, frankly, I will not sit here and be a part of any exercise that results in having a control board come back to the District of Columbia," Mayor Vincent C. Gray (D) said before a vote on a measure to close the city's budget gap in December, when he was still D.C. Council chairman.

D.C. officials estimate that the coming budget will have a shortfall that could reach $600 million. Although the city is much stronger economically and has balanced its budget every year since 1997, elected officials have not been shy in bringing up the past. The scale of the fiscal challenge is reminiscent of the $722 million budget deficit that led to the control board's creation. A new Republican majority in the House has also stirred memories.

"We have a Republican Congress coming in in January that would like nothing better than to take over this city again and say, 'We told you so,' " D.C. Council member Jack Evans (D-Ward 2) said at the same December meeting, waving 1995-vintage news clips from the dais.

Alice M. Rivlin, a former presidential budget director who served as chairwoman of the control board from 1998 to 2001, said it is "very unlikely" that the board could return. "It's part political rhetoric and part concern that we not slip back," she added.

But that is thanks, in large part, to the changes of the control era. And some say fears over the panel's reappearance prove that the control board is still doing its work.

'Turned the city around'

The D.C. Financial Responsibility and Management Assistance Authority - better known as the D.C. financial control board - technically still exists. But it is dormant and will remain so as long as the city avoids several conditions, such as failing to make its payroll, defaulting on bonds or not funding its pension obligations.

Changes dating to the control era have made those events unlikely. A 1997 reform package ended the practice of offering a yearly federal payment to the city. In return, the federal government assumed the city's debts, took responsibility for the city's courts and prisons, increased the rate for Medicaid reimbursements and took over the city's long-underfunded employee pensions.

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