D.C. budget director Comer S. Coppie testified yesterday that he was told two months in advance that former President Ford planned to propose a $10 million reduction in the 1978 U.S. payment to the city, but did not tell other city officials - including the mayor - about the proposed cut.
Mayor Walter E. Washington and other stunned city leaders did not find out about the proposed reduction until Jan. 17, when the White House released its federal budget proposal. It was the first time in years that the White House has not asked for the full federal payment from Congress for which the city is eligible.
The recommendation of a $290 million federal payment for the fiscal year beginning next October instead of the $300 million most city officials were counting on leaves the District's adopted budget - which by law must be balanced - with a possible $10 million gap.
Coppie told members of the City Council during a hearing yesterday that he did not pass the information on to the mayor because he had received it in a discussion about the federal budget and he felt information about the federal budget should be released by the President.
"That was an error in judgment on my part, a serious error," Coppie said. "I think I could have (told others about the cut) and should have."
At the time that Coppie was informed of the reduction by Peter Fannen of the Office of Management and Budget on Nov. 16, the City Council was in the process of preparing the city's budget and revenue package for fiscal 1978.
Council leaders said yesterday that had they known of the cut in the federal payment then they probably would not have cut $10 million from the proposed $1.2 billion budget that was approved in December.
Council leaders felt that the 11th-hour notification of the reduction could create another hurdle to their efforts to gain greater financial automony and more money for the city as well as possibly set a bad precedent for future federal payments.
"It creates a battle we have to fight that could have serious consequences if we fail," said Council Chairman Sterling Tucker. "It was going to be hard enough to get the $300 million from Congress if the President had recommended it. Now, with that kind of strike against us at this point, it will be terribly, terribly uphill."
Other Council members were sharply critical of Coppier, who has been the city's chief budget official for more than seven years.
"I think that that was just shameful and disgraceful, said Julius Hobson (Statehood-at large). "This is inexcusable, particularly when we were working on the budget at that time."
"Here we have one member of the executive branch going around with very, very important information and not even sharing it with his boss," said Willie J. Hardy (D-Seven).
"I think it's incredible that he didn't tell the mayor," said Marion Barry (D-at large), chairman of the Council's finance and revenue committee. "It was a breach of trust and sensibility."
Mayor Washington was not in his office yesterday because of a sinus condition. He said through a spokesman that no administrative reprimand would be made against Coppie.
"The mayor clearly considers this to be an isolated instance with Mr. Coppie," the spokesman said. "Mr. Coppie has already said it was a judgmental error. The mayor accepts that. It's now time to tend to the larger issue of how to get the $10 million back."
Last week, the mayor sent a four-page letter to Thomas B. (Bert) Lance, who was sworn in Sunday as OMB director asking for reinstatement of the $10 million. Council members said yesterday they plan to follow suit, and are prepared to work in tandem with the mayor's office on any additional efforts that may be necessary.
The federal payment is the U.S. government's annual allocation to the District to reimburse the city for the loss of property tax revenues from tax-exempt federal buildings and the additional municipal costs of being the nation's capital.
In 1974, a five-year escalating federal payment ceiling was established. A ceiling of $280 million for the current year was set, and Mr. Ford requested all of it. Congress appropriated $259.8 million of that amount last year and an additional $20 million supplement has been requested by Mr. Ford in the Jan. 17 budget proposal.
The amount requested by the President usually is trimmed somewhat by Congress. In the case of fiscal 1978, Congress could appropriate the full $300 million in spite of Mr. Ford's recommendation, but most city leaders consider that unlikely. Instead, they hope to persuade the Carter administration, which is on record favoring expanded home rule for the District, to request the full amount.
Coppie said he was given no firm reason for the proposed cuts when first informed Nov. 16. However, in a Jan. 14 letter to the mayor announcement the reduction - which the mayor did not receive until jan. 21 - Paul H. O'Neill, then deputy director of OMB, breifly explained the rationale.
"The allowance provided for the federal payment in 1978 maintains a reasonable relationship to other city revenues in light of the need for overall restraint on federal spending," O'Neill wrote.
O'Neill also pointed out that the proposed budget supported the District's request to alter the federal payment schedule for water and sewer costs incurred by federal properties. That alternation would bring a one-time-only payment of $20.4 million to the District government.
Coppie said his not telling the mayor was partially influenced by his knowledge that while the Ford administration would propose the federal budget, the D.C. budget would not be transmitted to Congress until after Mr. Carter was in office.