In early September, while running for reelection, Mayor Marion Barry was wildly enthusiastic about the city's financial outlook and boasted of the grip he had on city finances.
"I have a solid record, not only of making sure that our financial affairs are in order, but the future is even brighter in the sense that now we have a handle on our finances, our income and our expenditures," Barry said then.
But last week, as he announced that the city faces a potential $110 million deficit at the end of the current fiscal year, Barry appeared more subdued. After a strong preelection effort to persuade the public that the city's budget problems had disappeared, the crisis seems suddenly to have reappeared.
Barry faces the challenge of needing to win public and political support for a new round of belt-tightening that could include taxes increases, employe layoffs or program reductions. Layoffs could be particularly thorny, given the city's current high unemployment and his campaign promises that there would be no more layoffs.
The selling job the mayor will have to do could be all the more difficult in the wake of spending increases whose occurrence during the election year seemed more than coincidental. He found money, for instance, for more street repairs than ever had been made in one year. He found money to increase the school budget. He found money for 3,000 additional jobs in the summer jobs program.
Can he raise taxes now?
"The feeling is that taxes in the city are already too high to be raise any further," said John R. Tydings, executive vice president of the Greater Washington Board of Trade. "We just finished our 14th comprehensive study showing the city has the highest tax burden in the area in a variety of tax categories. Without any question there is the strong feeling that the District's tax picture is already onerous."
Barry's political approach to getting tax increases in an anti-tax atmosphere so far has been to say he personally will not propose any new taxes because he believes the city is taxed too heavily already. But, he says, he will have to consider a tax increase if the City Council should propose one.
"My response to that," said council member John A. Wilson (D-Ward 2), chairman of the finance and revenue committee, "is that the mayor can go take a walk. If he wants taxes to pay for his overspending, he can propose taxes. If he comes down here and says he wants taxes, spending cuts, one-two-three-four, I'll take my marching orders."
At the same time that Barry is saying he is not going to propose any new taxes, his transition task force is polling city residents to see which taxes they would be least opposed to seeing increased and which user fees, from parking meters to permit fees, could be raised.
Barry has other examples around the county to follow in the politics of budget crises. In New York, Mayor Edward Koch makes that city's recurring budget problems into a reason for civic pride, telling residents that New Yorkers are survivors and will tough it out. In Detroit, Mayor Coleman Young turned tax increase initiatives into a referendum on him and his policies--and won.
But neither of those mayors tried to gain support for tax increases or budget cuts after claiming the problem was solved. And neither of those mayors told city workers there would be no more layoffs if he were reelected.
"This is going to be a real test for Barry and the city government," said Philip M. Dearborn, vice president of the Greater Washington Research Center, which forecast that the city will have a growing budget gap over the next five years. "If I were advising him, I'd tell him, 'Don't foreclose any alternative.' He is putting himself in a box . . . . I don't see how a tax increase can be avoided."
The big question is which tax. General sales taxes are already 2 percent higher than in the suburbs. Property taxes, already high, have been set for this year. The corporate income tax is high as well.
Whatever Barry decides to do to head off a deficit, he will have to do it fast. The city is already two months into the fiscal year and added taxes or cuts in spending that amount to $110 million will have to be all the more severe to work their budget magic by the bottom-line date of Sept. 30.