SEN. PATRICK J. LEAHY (D-Vt.), chairman of the Senate appropriations subcommittee on the District, is creating confusion where none should exist. The senator says that the District government's deficit before this fiscal year was nowhere near the $285 million that Mayor Barry claims it was. For proof, the senator points to a General Accounting Office report that says the city's deficit was only $90 million before this year. What Mr. Leahy neglects to mention is that the GAO and the mayor are in agreement: the city needs $90 million immediately to pay its bills and it must get another $195 million subsequently fully to fund accounts (such as vacation pay for its employees) that will come due sometime in the future. The total deficit prior to this year, as Mayor Barry and the GAO agree, is $285 million.
The GAO told Congress that the deficit was in fact $285 million in a July 11, 1980, letter to Rep. Julian Dixon (D-Calif.), head of the House appropriations subcommittee on the District. In that letter, the GAO said the only problem it had with the $285 million estimate was that it had been computed under an accounting system not used by the city before. But the GAO did not challenge either the use of new accounting system or the accuracy of the $285 million figure.
Sen. Leahy might have done better to criticize the city government on the amount of debt it has built up for this year. Mayor Barry had announced earlier this year that higher taxes, a congressional supplemental to the city budget and reduced spending by government agencies (of about $60 million) would eliminate most of this year's deficit. The taxes came late, but they were passed by the D.C. council; the congressional supplement was less than expected but was more than two-thirds of what was requested; the only remaining question was how effective the city's savings plan would be City officials say they do not have a final tabulation of the amount of money saved under the plan, but they estimate that so far only about $10 million has been saved. The original plan to save $60 million seems to have been a failure.
Council members say the mayor has told them that five city departments not only were unable to save money but actually overspent their budgets by about $35 million. The largest amount of overspending was that of the Department of Health Services, which is over budget by $20.8 million. In addition, the mayor announced last week that he is being forced to spend money the city does not have in order to keep the courts open and to pay for the city's disability compensation program. This amounts to another $3.2 million.
The mayor had no choice but to keep the courts open and to pay disability compensation. Those are essential city costs. The unanswered question is: What happened to the city's plan to reduce spending? Why didn't it work? Why was there all this spending beyond budget limits?
The Barry administration should not be faulted for the bad fiscal management that occurred before it took office. But careful attention must be given to the ever-larger deficit the city is incurring now. A city asking permission to sell bonds needs to show that it can stick to its own plan to cut spending.