Earlier this year I projected that the District would face an FY1980 deficit of nearly $200 million. At that time, the mayor was projecting a deficit of $17 million. The mayor has now revised his estimate of the FY1980 deficit to $174 million -- not including the repayment of over $40 million collected under the professional tax. Since this tax is still in litigation, I have agreed with the mayor's new projection of an FY1980 deficit of $174 million.
Contrary to the impression created by the local press, the Council of the District of Columbia has not been a passive spectator in this process, but, rather, an active participant in trying to resolve this financial crisis. Once the FY1980 Budget Supplement was presented by the mayor, the council held a full round of public hearings on the supplement and acted in record time to pass this important measure. The council has fully supported the request for a full federal payment in FY1980 and has testified in support of this request before Congress.
The mayor originally proposed a savings plan -- budget cuts -- of $26 million in FY1980. At the same time, the mayor informed the council, through a memorandum from the corporation counsel, that approval of the council is not necessary before this plan can be put into operation. Specifically, the memorandum stated:
"The mayor, when confronted with a shortfall in anticipated revenues, is empowered to reduce the expenditure and obligation of appropriated funds by all District agencies in order to keep the District government within the limits of its actual resources."
Thus the council is effectively shut out of the decision-making process in regard to FY1980 budget cuts. This was further evidenced by the recent announcement by the mayor that his savings plan has now increased from $26 million to $50 million. The council learned of this revision at the same time as the general public and has yet to receive a detailed breakdown of how these savings will be achieved.
Since, under charter restrictions, the council cannot initiate a budget act, since the District faces a projected deficit in FY1981 at least equal to the FY1980 deficit and since the mayor's revised tax package will raise $15 million less in FY1981 than originally anticipated, a majority of the Committee on Finance and Revenue has informed the mayor that no final action will be taken on his proposed tax package until such time as the council has before it the FY1981 Budget Amendment and that, in order to adequately address the projected FY1981 deficit, $150 million needs to be cut from the base of the FY1981 budget now pending before Congress. This is in addition to the $61.7 million that would be raised by the mayor's revised tax package in FY1981.
By having both the FY1981 Budget Amendment and the tax package before the council at the same time, the council will be able to make comprehensive decisions and reasoned choices between tax increases and budget cuts when addressing the projected FY1981 deficit. By following this course of action, the council will be in a position to balance the adverse effects of budget cuts against the adverse effects of tax increases in making the hard financial decisions before it.
In addition, this comprehensive approach will provide more understanding and opportunity to comment to the general public most affected by these actions.
While it is no secret that Congress ultimately controls the purse strings, it would be totally irresponsible for this government to take no positive action to put our expenditures in line with our anticipated revenues. We must assess our real and anticipated losses and move to make the hard decisions -- raise taxes, cut the budget, or a well-reasoned combination of the two. There has been no delay by the council in addressing these concerns.