IN THIS REPORT Marion Barry Charts The new structure of the D.C. government. The mayor's office loses influence in the District. Details Key elements of the District plan include tax breaks and financial incentives. A timeline shows the city's form of government changing several times since 1967.

Senate Passes Budget Bill for District

The Senate passed a $4.2 billion District budget bill last night after Republicans separated the city's financial affairs from a controversial school voucher plan that also was approved.

Splitting the voucher issue from the D.C. budget will allow the District's spending plan to be approved in the House as early as this week and then to be sent to President Clinton without the threat of a veto hanging over it, congressional leaders said.

Supporters of the vouchers, which would provide about 2,000 D.C. students with up to $3,200 each to pay tuition at private schools, say the plan would give District children a way to escape beleaguered public schools. But Clinton has said he would veto a bill that included the vouchers because it would undermine support for public education.

The Senate action virtually ensures that the District will not have to cut spending by $100 million as a result of delays in congressional approval of its spending plan. It also means the overhaul of nine major District agencies by the D.C. financial control board will have the funding necessary to go forward.

Del. Eleanor Holmes Norton (D-D.C.) said the Senate ratified the balanced budget proposed by the District's elected officials and the control board. And both Norton and Rep. Thomas M. Davis III (R-Va.) said the House was likely to endorse the Senate version of the city's budget and send a District bill to the White House.

"It is a sensible, rational approach," Norton said last night. "It is not a perfect bill, but under the circumstances, it is a good bill."

Although the 1998 fiscal year began Oct. 1, the District has been operating under a series of temporary spending measures. Congressional approval of its budget has been delayed by debates over vouchers and immigration issues unrelated to city spending.

The delay has been costly. The city was scheduled to receive a $190 million federal contribution on Oct. 1, but the funds cannot be transferred until the city's budget is approved. As a result, the District has been forced to borrow from the U.S. Treasury to pay its bills, Norton said.

"To have the city borrowing at the beginning of the year tells us about the costs of delay for a city already behind the eight ball when it comes to money," Norton said.

Sen. Lauch Faircloth (R-N.C.), chairman of the Senate Appropriations subcommittee on the District, said the D.C. budget bill reduces spending in many areas other than public safety. He also said it provides the necessary funding for a broad-based federal rescue package for the city that Congress passed last summer.

Although the city's 1998 budget is balanced, the District has a deficit of roughly $500 million accumulated from years of overspending. The budget bill approved by the Senate would reduce that deficit by about $200 million.

Norton said she is unhappy that the bill restricts the use of federal funds to pay for abortions in the city, but she said she is glad the bill does not contain language that would have forced the struggling University of District of Columbia Law School to close in the middle of the academic year.

Faircloth noted that the bill contains $8 million to pay for improvements in the city's Department of Public Works, the Fire Department and other agencies operating under the control board. Teams of consultants will provide the board with detailed strategies later this month on how to implement the changes.

"The passage of this bill will ensure that the work goes forward to restructure the city's finances and impose some much-needed management reforms," Faircloth said. "This budget is balanced one year ahead of the schedule set by Congress in 1995 when it created the control board."

After the District budget was held up in the Senate by disagreements over vouchers, an accord was reached yesterday to put vouchers in a separate bill. Both bills were approved last night in the Senate by voice votes, rather than roll call votes, with the District budget linked to two other federal spending bills that also were pending.

Although she is opposed to vouchers, Sen. Barbara Boxer (D-Calif.) supported putting the matter on a separate bill so the District budget legislation could move forward. "It is a way to resolve a problem that right now is very contentious on both sides," Boxer said.

The House passed a D.C. budget bill containing vouchers by a single vote earlier this fall, but House leaders have repudiated that legislation and sought to garner support for the Senate version of the city's budget instead. Rep. Charles H. Taylor (R-N.C.), chairman of the House Appropriations subcommittee on the District, is opposed to the Senate version of the city's spending bill since it lacks restrictions on the control board's power.

Taylor initially crafted a bill that prohibited the control board from moving forward with plans to install a new computerized financial management system for the city and limited its authority in other areas. After Taylor refused to eliminate those provisions, House leaders stripped him of authority over the bill and asked Davis, chairman of the House Government Oversight subcommittee on the District, to devise a workable compromise.

Taylor has been attempting to persuade Republicans to vote against the District budget bill. "The control board has now replaced the mayor and council as the supporter of the status quo and the `give us the money' demands, rather than buckling down to streamline the bureaucracy," Taylor wrote to his House colleagues.

Davis said that although some of Taylor's ideas will be incorporated in the bill, it will not change dramatically. "I'm sure Taylor won't support the bill, but I'm sure we will pick up enough Democratic votes to ensure passage," he said.