THE LATEST money-saving proposal from the city government, reducing its payroll by another 3,000 jobs, won't help the city stay out of a deep financial hole it seems destined to fall into by the end of this fiscal year. As city administrator Elijah Rogers has said, it is now inevitable that the District government will have overspent its budget by millions of dollars by the last day of the fiscal year, Sept. 30.The personnel cuts proposed now would not even get under way until Oct. 1. Nonetheless, those payroll reductions will help the city save money in future years by ridding it of some bureaucratic fat.
But a more immediate problem exists. The city government needs to cut its losses for this year as much as possible. A deficit at the end of this year will mean that next year will begin with a deficit. The city's budget problem thus will continue, possibly spreading itself over many years, and leaving the city in a swamp of debt.
This bleak prognosis for the city's financial affairs is primarily due to the government's failure to enforce a $26 million budget reduction plan that Mayor Barry announced in February. Despite that announcement, the city's agencies continue to overspend the budget. The school system is a major offender. The mayor had asked it to reduce its budget by about $6 million. But the school system is currently spending at a rate of $7 million over its initial budget of $247 million. In city agencies, money saved by other austerity steps, such as the hiring freeze, is often used to fund other projects and programs as if an extra pot of money had been discovered. For example, the city's agencies have already, in the eighth month of the fiscal year, overspent the government's budget for overtime by about $1 million.
What is needed is for the city's budget director, Gladys Mack, to issue for each agency a month-by-month budget plan that restricts spending to a bare minimum. This would make it painfully clear to agency directors and staff exactly how much money they have to spend and, more important, how much money they do not have to spend. It may already be to late to help the city avoid entirely a huge deficit at the end of this fiscal year, but such a plan could limit the amount of the deficit.