Mayor Marion Barry, contradicting earlier promises, warned yesterday that he may propose increased taxes next year because the city stands to lose an estimated $69.2 million in federal funds due to Reagan administration budget cuts.
The District government "may have to increase the already heavy local tax burden to provide critical services or maintain such services at an acceptible level," Barry said in a prepared statement he released at a press conference yesterday.
In recent months, Barry has promised repeatedly that he would propose no increased taxes for 1982. He did not detail any specific proposed tax increases yesterday, but said that if he does request an increase it will not cover the total $69.2 million loss the District faces in federal funds.
Previously, city officials had estimated a $66 million loss as a result of the cuts, but Barry said the figures have been revised to total $69.2 million. This year, he said, the city is receiving $370 million in federal grant funds. Next fiscal year, the figure will be approximately $301 million.
In addition, according to a report on the cuts Barry released yesterday, the loss of the grant funds will create a ripple in the city's economy that will reduce the District government's income, sales and franchise tax recepits by $15.7 million, creating a total projected loss of $85 million.
The 19-page report details the anticipated impact of the cuts in the various affected city programs, headed by an estimated $20 million decrease in the federal contribution to the District's Medicaid program, which provides medical care for poor and elderly residents.
It predicts a $10 million loss in funds for the D.C. public schools, including reductions in programs for handicapped and other special students and less support for reduced-price school lunches and other food programs.
The report projects a $12.7 million loss in employment funds, much of it in the federal Comprehensive Employment and Training Act (CETA) program, causing a loss of about 1,600 jobs.
The largely unskilled former CETA workers will be at a disadvantage competing for private-sector jobs, and many of them probably will end up on the welfare rolls, the report asserted.
A projected loss of $6.7 million in housing funds likely will raise the rents of public housing residents from 25 percent of income to 30 percent, the report projects. This action, recommended by Congress, would "force some renters out of public housing," according to the report.
The housing cuts also would eliminate a program to help low-income residents weatherize their homes, reduce funds for construction of public housing and eliminate a $202,500 grant to support historic preservation activities.
Cuts in grants to the city's massive Department of Human Services would lead to 25 percent reductions in various programs. Such programs provide services to expectant mothers, support emergency shelters for the homeless, help low-income residents pay energy bills, provide nursing services to the elderly, combat venereal disease and others.
In addition, there would be a $5.2 million cut in the city's basic welfare program, Aid to Families with Dependent Children (AFDC). About 1,000 persons would be moved off the rolls because of changes in eligibility, and another 7,500 residents would receive reduced services, the report states.
Other cuts range from refugee assistance to funding for the arts. Residents will find longer lines at city facilities that depend heavily on CETA workers, such as the public library system, according to the report. Fewer safety barriers could be constructed on the District's roads.
Barry said he has formed a task force of 12 of the city's top officials, headed by Department of Finance and Revenue director Carolyn L. Smith and budget director Gladys W. Mack, to study the changes necessary in city government procedures caused by President Reagan's shift to block grants as the principal means of channeling federal funds to the cities.