WHAT SOUNDED as if it might be bad budget news from the District government earlier this week turns out to be comforting news instead. The suggestion was that rather than continuing to live within its means, as most people thought it was doing, the District was threatening once again to overspend and incur a deficit. But the opposite is true.
Instead of waiting until late in the fiscal year, when the money already would be spent, the chief financial officer ordered a precautionary review last fall of each agency's spending plan to make sure it conformed to the agency's budget. A number of agencies were found to be on track to overspend; the possible overspending totaled about $120 million, not a huge amount in a $4 billion-plus budget but not trifling, either. By the time the report was written in December, corrective steps had been taken to reduce the threat by half, to an estimated $66 million, and work was continuing on that.
Much of the remainder is in agencies in receivership; the negotiations are thus in part with the courts, or their representatives, and complicated. Another chunk involves Y2K-related computer expenses. Chief Financial Officer Valerie Holt is confident that the remaining amount can be reduced or offset by savings elsewhere in the budget, and in any case it already is less than the $150 million reserve or "surplus" that was built into the budget in part to take care of just such emergencies.
Ms. Holt is helped in this by the fact that there are now chief financial officers appointed by her and reporting to her inside each agency. In the old days, no such network existed. The budget was not a discipline so much as a gloss for indiscipline, a piece of paper enforced only insofar as it suited the purposes of the mayor and lesser political figures. Toward year's end, in bad years, it would be discovered that the agencies had overspent, and gimmicks would be found to defer the day of reckoning. It's precisely that kind of outcome that the current vigilance is meant to prevent. That's why the early warning that made its way into print the other day was a source of reassurance.