Mayor Marion Barry's optimistic election-year budget plan was greeted skeptically yesterday by D.C. City Council members and staff, who claimed it was balanced by unrealistically high revenue forecasts and ignored the city's longstanding fiscal problems.
In addition, council member John A. Wilson (D-Ward 2), chairman of the council's Finance and Revenue Committee, said he would oppose a major new tax plan that Barry is counting on to help offset cuts in federal spending for housing, jobs and welfare.
The measure would raise an additional $8.2 million a year--about half the $14.6 million in new taxing authority being sought by the mayor--by increasing the gross receipts taxes paid by Washington-area utility companies.
Wilson was among those who first proposed the tax a year ago as part of a comprehensive plan to reduce the city's troublesome $388-million accumulated debt.
However, he said yesterday that he would oppose the measure if Barry was determined to use it for increased city spending next year--regardless of the merits of that spending.
"I'm not willing to raise a single dime of additional revenue except to eliminate the deficit," Wilson said. "It's important to begin stabilizing the finances of this city."
Wilson and others described Barry's $1.76 billion budget proposal for the fiscal year that begins Oct. 1 as a shrewd, "something-for-everyone" political document designed to help him win reelection next fall.
Wilson insisted that the Barry administration was ignoring the realities of high unemployment and a sharp downturn in the economy in predicting that the city's tax revenues would increase next year by 14 percent, or $153 million, compared with an estimated 8 percent increase between fiscal 1981 and 1982.
"The mayor must be the only fool in the country, because nobody else thinks things are looking up," said Wilson, an announced candidate for mayor.
Council member Betty Ann Kane (D-At Large), another of Barry's political challengers, described the revenue forecasts as "pie in the sky."
Kane said she doubted D.C. Department of Finance and Revenue predictions that D.C. income tax revenues would increase by 19 percent next year, while government employes are settling for pay increases of 5 to 10 percent.
Also, she questioned a projected 12 percent increase in property taxes next year at a time when real estate experts are predicting that the real estate values are likely to stabilize or, worse yet, decline.
Stephen Reichenberg, the council's budget director, added that, "It's very optimistic to think that revenues will increase as much as they've predicted.
"It does look like there's something for everyone in the budget, from my first reading," Reichenberg said. "Provided the revenues are there to support it, it may not be a bad budget."
An ebullient and increasingly confident Barry insisted at a press conference yesterday that his budget, which calls for a total of $181 million in new spending next year, was fiscally sound and based on solid revenue forecasts.
"We've been exemplary in our predictions of what we get in," said Barry. "In fact, we've been conservative in our estimates."
However, Barry did not discourage the suggestion that he tailored his budget to enhance his chances for reelection.
"Every budget that every mayor submits is political," Barry said. "Any mayor who says it's not political is not telling the truth . . . . "
Barry predicted that his budget would receive widespread support and that the City Council would go along with his proposal for increases in city fees and taxes, including the gross receipts tax on utilities, which is being considered by Wilson's committee.
Telephone, gas and electric companies currently pay a 6 percent tax on their gross receipts. Under a bill introduced by City Council Chairman Arrington Dixon last April on Barry's behalf and subsequently amended by Wilson, the tax on telephone companies would rise to 8.3 percent and the tax on gas and electric companies would rise to 11 percent.
Spokesmen for the utilities testified last year that they would pass along the increased taxes to consumers in the form of rate boosts. However, Carolyn L. Smith, director of the D.C. Department of Finance and Revenue, insisted yesterday that the probable increase in rates would not exceed the savings to consumers of eliminating the sales tax on utility bills.
Barry insisted that his plan to retire the city's accumulated debt had not failed, despite setbacks on Capitol Hill and his own decision to put off implementation of a portion of the plan for at least another year.
Two years ago, in the midst of what was then considered a city financial crisis, Barry proposed to refinance $184 million of unpaid bills by issuing bonds, and setting aside $10 million a year in cash to retire about $204 million of so-called "noncash" obligations.
A bill authorizing the bonds has been sidetracked in the House of Representatives, with little chance of being enacted this year. And last week, Barry announced that instead of setting aside $10 million next year, he would use the money to increase funds for the public school system.
Barry said yesterday that the city still intends to set aside $16.5 millioin next year to pay off the "cash" portion of its debt. If he had followed through on his plan, he would have set aside a total of $26.5 million.
"I've just decreased the increase," he said.