The District of Columbia government has formally notified Congress that apparently for the first time, the city expects to spend more money in a fiscal year than authorized by Congress -- $25 million more in the fiscal year ending Sept. 30.
Budget Director Gladys W. Mack, in a letter to Rep. Julian Dixon (D-Calif.), chairman of the House D.C. Appropriations subcommittee, hedged slightly in alerting Congress to the overspending, using the word "may" instead of "will," but it is clear from her letter that no other outcome is possible.
The District has often in past years spent more than it collected in revenues, which accounts for its cumulative deficit that is expected to reach $409 million by the time this fiscal year ends.
But this is apparently the first time in recent memory that any District administration has knowingly exceeded not only its income but its congressional spending limit.
Because it has not happended before, it is not clear what the consequences will be. Overspending a congressional appropriation is a violation of federal law that could theoretically subject Mayor Marion Barry to prosecution if Congress is not satisfied with his explanation. But officials in the city government and in Congress regard that as extremely unlikely.
More probable is a request from the city Congress for a second supplemental appropriation for the current fiscal year, which would in effect legalize what the city has already done.
Capitol Hill sources said such a request would not improve the mayor's relations with Congress when he is now asking Congress for hundreds of millions of dollars in new financial aid, borrowing authority and loan guarantees.
Mack's letter told Dixon of "expenditures by the District of Columbia government of funds that in the absence of a supplemental appropriation act may require" a notice of "deficiency" to be filed with Congress.
It said "current projections reflect that expenditures for the Fire Department, the Department of Human Services, the Department of Corrections, the Department of Transportation and for fire pensions may exceed available appropriation."
The city's total appropriation for the current year including the first supplemental approved by Congress in July, is $1.4 billion.
Barry has already predicted that the city will end the year $125 million in the red -- that is, will spend $125 million more than it takes in.
But Mack's letter is the first official acknowledgement that a deficit of the magnitude would also carry the city beyond its appropriation, or authorization from Congress to spend.
Most of overspending is in welfare and Medicaid payments, and Barry has pledged publicly that those will never be suspended as long as he is mayor. In the absence of congressional action, however, the money for them will have to come out of tax revenues already earmarked for other programs.
Barry said at a press conference yesterday that the agencies indentified in Mack's letter were "underfounded" -- a euphemism for overcommitted -- in the current fiscal year. But he said he did not anticipate asking for another supplemental appropriation until the total deficit is calculated by the city auditors. Their report is due Feb. 1.
In the meantime, Barry said, "we will do whatever the law requires" to remain in technical compliance with the federal antideficiency act. The Mack letter to Dixon was the first step in that legal process, but it is not clear what the second step will be.