The congressional vote to keep the District of Columbia operating on last year's budget - possibly until next September - will block $168 million in new municipal construction projects while crippling a stepped-up tax collection program and a drive against welfare cheats, city officials said yesterday.
Congress, unable to agree on the city's plan for a downtown convention center, sidestepped the issue Wednesday by simply renewing last year's city budget and making it effective for the entire 1978 fiscal year, which runs to next Sept. 30.
Unless Congress has second thoughts after it returns in January, its action means the city has the power to spend $1.1 billion on operations, which is at least $115 million less than what it had proposed. Moreover, the city must squeeze at least $65 million in pay increases for its employees out of the reduced budget.
The congressional action also means that the city's entire capital outlay program of $168 million will be shelved for the year.
Deferred projects include a new $35-million municipal office building, a $56.7-million downtown campus for the University of the District of Columbia, the modernization of two vocational training centers, a new fire house, a library in the Lamond Riggs area of northwest Washington and numerous sewer, water and highway projects.
Also deferred is a start on the convention center, for which the city has requested at $27 million appropriation, chiefly for land acquisition on the site near Mount Vernon Square NW. The ultimate cost of the project is estimated at $10 million.
In the main city's operating budget for 1978 would have provided very few new or enlarged programs.
Among the largest were the proposed addition of 180 employees in the Department of Human Resources and 48 employees in the Department of Finance and Revenue.
The human resources employees would be assigned chiefly to screening and checking for welfare cheating. The finance and revenue employees would audit tax returns, collect delinquent taxes and gear up for the planned annual reassessment of real estate.
The legislation that extends the City's old budget instead of enacting a new one is part of a larger measure that also provide funds to run the U.S. department of Labor and Health, Education and Welfare. It was awaiting President Carter's signature last night.
During two days of congressional debate on the measure, the District of Columbia was scarely mentioned and its budgetary problems were ignored entirely.
The city is in the current budgetary situation because for more than a century, its annual budgets have been treated as though it were a department of the federal government. This is so despite the fact that two-thirds of the city's expenses are paid from locally raised taxes.
In September, the President proposed that the city be granted budget autonomy, freeing it from the control of Congress. But that would not come until 1982 at the earliest.
The deadlock that may force the city to live all year within last year's budget resulted from a confrontation between the two congressional subcommittee chairmen who oversee D.C. appropriations, veteran Rep. William H. Natcher (D-Ky.) and freshman Sen. Patrick J. Leachy (D-Vt.).
Natcher supported the city's convention center plan, and the House followed his lead in voting its approval Leahy opposed the plan, and the Senate voted its rejection.
When the two men met as conferees to work out differences between House and Senate versions of the budget, both took hard lines on the convention center. After two meetings> the conference sessions broke off hopelessly deadlocked.
Natcher, who has remained silent on the matter came up with the plan to extend the city's 1977 budget through fiscal 1978 - a clear signal that he unbending in his support for the center and will not meet with Leahy unless the senator changes his mind.
Leahy responded in a statement published in the Congressional Record that was distributed yesterday.
The city's official position of insisting upon the convention center is "no longer responsible with regard to the city government's central responsibility for operation of the entire city."
If city officials will drop the convention center financing request and work on a compromise plan. Leahy said the House-Senate conferees could quickly reach agreement on a regular budget.
D.C. budget director Comer S. COppie, speaking for Mayor Walter E. Washington would not comment on Leahy's statement. COppie said the city still hopes for the eventual enactment of a regular budget.
There will be "serious implications for the city if we do not get an ultimate (regular budget) for the 1978 fiscal year," Coppie said.
Coppie said the mayor has told him to prepare a detailed report on what effects the extension of last year's budget would have if no steps are taken to enact a new budget.
Based on that report, Coppie said the mayor probably will consult the City Council and arrive at a course of action - possibly a request to Congress to take further action.
Coppie said the city's problem is not cash, but the right to spend it. The budgetary deadlock deals only with expenditures and has no effect on the collection of taxes. The continuing resolution approved by Congress this week provides a federal payment to the city of $276 million the amount Leahy has recommended to finance a regular budget if one is considered.