D.C. Council Chairman David A. Clarke unveiled a spending plan yesterday that he said would eliminate the need for individual income tax increases proposed by Mayor Marion Barry. Hours later, Barry announced that he would scale back his request.
Clarke's proposal would generate $87.6 million in savings over a two-year period by making deep cuts in personnel costs, except in the D.C. police department, school system and city agencies that have been required by court orders to hire new employees.
While outlining spending reductions in a range of program areas, the council chairman also called for a two-year, $3.8 million increase in spending for the Alcohol and Drug Abuse Services Administration, which runs drug abuse treatment and prevention programs. Clarke has been critical of the Barry administration's management of such programs.
"I think that the kinds of things that we think need to be done can be done without a tax increase," Clarke said.
Barry, in a letter to Clarke released last night, said he will withdraw his plan to impose a 5 percent surtax on income next year. Higher-than-expected real estate assessments, averaging 13.5 percent increases for city homeonwers, would generate enough revenue to make the income surtax unnecessary, he said.
The surtax would have generated $22 million -- the precise amount Barry estimated would result from the increase in property assessments.
Clarke was critical of Barry's move, suggesting that higher property taxes would be "less popular" than a 5 percent income surtax.
Clarke emphasized that his proposal would require no layoffs and would preserve Barry's $13 million increase in funding for the homeless. Clarke's plan, which he said would eliminate the need for the other $40.6 million in income tax increases that Barry proposed for fiscal 1988 and 1989, was released to the council just days before council committees meet to decide where Barry's spending blueprints should be cut or increased.
The council, which has the option to adopt or reject Clarke's suggestions, is reviewing Barry's proposals for midyear revisions in the current year budget and also is reviewing the mayor's overall $2.8 billion budget for the next year. Once those sessions are done, the council will vote March 22 on the budgets and send them to Congress for its review.
The council last year twice rejected efforts by the mayor to raise income taxes, and several council members have expressed the same sentiment this year. It was unclear yesterday how council members, six of whom are up for reelection, will respond to Clarke's plan.
Under Clarke's plan, the $87.6 million in personnel costs could be saved by holding current job vacancies open and denying new positions.
The mayor's budget requests in recent years have repeatedly been criticized by council members for spending more on personnel and less on city services. In January, Clarke urged the mayor to hold the line on hiring, saying that if the personnel budget continued to grow at its current rate it would double in the next nine years.
Under Clarke's plan for nonpersonnel spending, $9.6 million could be saved if the council denies Barry's request to restore funds in 1989 that he wants to cut in the current year. In addition, $3.9 million could be saved in energy costs for the two-year period because energy costs are decreasing, rather than increasing, Clarke said.