The D.C. government's massive financial crisis has worsened by at least another $11 million because tax revenues are lower than anticipated, city officials said yesterday.
As of the end of April, the city had collected $8.7 million less in tax revenues than anticipated in the current budget year, with most of the shortfall coming in property taxes, according to a confidential report obtained by The Washington Post.
D.C. Department of Finance and Revenue Director Carolyn L. Smith said that her office anticipates the shortfall for the entire fiscal year ending Sept. 30 will be at least $11 million.
To meet the new revenue shortfall, Mayor Marion Barry will have to cut city services still further, lay off more government workers or raise taxes, although it was uncertain last night which tack he might take.
The city is already engulfed in serious financial problems, with a $170-million budget deficit projected by the end of the fiscal year. To offset the deficit, Barry has proposed eliminating 1,540 city jobs, 403 through actual layoffs, raising taxes and license fees by $24 million, and seeking additional funds from Congress.
The now-outdated revenue estimates, made in January, were used in formulating Barry's proposals to balance the city's budget, Smith said. Those proposals must now be revised to account for the $11-million revenue shortfall if the city is to avoid running a deficit or carrying over expenses into next fiscal year.
Barry's budget-rescue plans have encountered significant opposition and now seem in danger of total collapse. Barry's city administrator, Elijah B. Rogers, said last week that the District will probably not have a balanced budget this year.
The revenue report was prepared by Smith's office and distributed to administration officials and members of the City Council, but was not publicly released.
In addition to highlighting the revenue shortfall, the report also indicated that through April the city had received $60 million less in federal and private grant funds than expected.
But budget officials said that the $60-million figure does not take into account monthly variations in the flow of grant funds. They said that despite the report there is not yet any reliable way of determining whether expected grant funds will be diminished for the entire fiscal year.
Smith's report indicate that while revenues from some taxes -- including the personal income levy -- are higher than expected, the increases are more than offset by a $17.5 million decrease in property tax revenues through April.
Smight said some of the shortfall was caused by the city's failure to send out bills on time. March property bills for some banks, savings and loans and other large institutions were delayed several weeks due to a foul-up in the District's computerized billing system, Smith said.
In addition, she said, more D.C. resident than expected signed up for the city's $9,000 "homestead" property tax exemption, further reducing property tax revenues.
Smight said that the portion of the property tax shortfall created by the late billings would be recovered before the end of the fiscal year. But she added the portion caused by increased use of the homestead exemption, in conjunction with a general overestimation by her office in property tax revenues, would create most of the overall $11-million revenue shortfall anticipated for the fiscal year.
Revenues from some other taxes are also down, the report shows. These include the gasoline tax, down $1.1 million; the automobile excise tax, down $1.3 million; and inheritance taxes, down $800,000.
Income taxes, on the other hand, are running $8.1 million higher than expected through April, while corporate franchise taxes and revenues from the one percent deed recordation tax charged at the time of sale or transfer of property are also up.
Barry and his aides have consistently contended that their January revenue projections were on target, with Barry telling a reporter several weeks ago, "Things are holding steady." Barry could not be reached for comment on Smith's report yesterday.
The disclosure of the revenues shortfall is the latest is a series of setbacks for Barry's budget proposals which he first announced on March 6 and then revised last month to call for sharper reductions in city services. Crucial House of Representatives action has cut his $61.8-million request to the federal government by $33 million. Meanwhile, the City Council has set no firm date to act on the mayor's tax package.
In another budget development yesterday, petitions bearing an estimated 10,000 signatures protesting proposed reductions in the D.C. police budget, were presented to Barry by Calvin Rolark, co-chairman of the Police Chief's Advisory Council.
The signatures, which Rolark said were collected over the last two weeks from the general public, asked the mayor to budget sufficient funds to keep the force at its current authorized strength of 4,865.
Rolark said reduced financing previously ordered and currently being considered by Barry would force the dropping of 454 positions in the current and coming fiscal years. Of these, about 200 would be by layoffs.