Last winter, the District's financial outlook was so dim that Mayor Barry, testifying before Congress, said the city might have to let the street lights go out at night. The city had to have $187 million right away, the mayor said, or cars would be crashing in the dark.
The District never got the $187 million and the street lights did not go out. In fact, the mayor has announced that the financial crisis is dead and gone and that there is a $7 million surplus for fiscal year 1981. What happened to the budget crisis?
What happened, a cynic might say, is that Election Day 1982 came into view and Mayor Barry decided that talk about a budget deficit would lead inevitably to talk about how badly the mayor handled some parts of the budget problem. And that might lead voters to make Marion Barry the former mayor.
Suddenly, there is enough money for him to propose that all non-union city employees, mostly highly paid department heads and their many assistants, get an extra week's pay as a Christmas bonus this year; enough money to put up signs on construction sites cheering "D.C. on the Grow"; and enough money to start up the city hall newspaper again--with praise of Barry administration programs as well as a full-page article by the mayor--and distribute it to drug stores and supermarkets. There is even enough money for the mayor to propose that old people, those voters, no longer be charged 20 cents for riding the buses but be allowed to ride for free.
But as this sudden good news comes from the District building, the city remains about $387 million in debt. That includes a $105 million deficit that the Barry administration ran up in fiscal year 1980.
Despite that large debt, the mayor is advertising, in what seems like pre-campaign literature, that the city's 1981 budget had a surplus. There is no mention of the deficit. And the '81 budget the mayor is now speaking of so glowingly is the same budget he spoke about in doomsday terms only four months ago, citing a $60 million deficit at mid-year, when he was seeking authority from Congress to sell bonds. He claims the city managed to avoid the financial collapse he had predicted because agencies dramatically slashed their budgets.
This explanation has city council members, congressmen and budget analysts casting questioning glances at each other, because the city government that the mayor claims saved $60 million in less than half a year is the same city government that could not cut spending during the entire 1980 fiscal year--and ended up with that $105 million deficit. The mayor points to the city's new-found ability to step on the brakes as another accomplishment of his administration.
"They can show you that the budget is supposed to be balanced on paper," says John Wilson, chairman of the city council's finance committee, "but it's not really balanced. In practicality, that budget is as out of balance as any other. They just left things out. They can keep this up for 11 more months (until the mayoral election), but 1983 is going to be a mess. That's when the cover will come off, and just like you had a tax increase after the last election, you are going to have another tax increase."
Even if the mayor is right in saying that the city now has the ability to cut spending on a moment's notice, there are questions that come with the applause for greatly improved city management. The big question is: how much fat is there in the city government if $60 million can be saved in a few months without any glaring cuts in essential services.
The other side of that big question is whether the city has really cut its spending. Could it be that the city simply put off needed repairs and purchases until next year? The school system did just that in the last fiscal year to avoid a budget deficit and the need to furlough teachers. If the city government has leaky roofs that will have to be patched and vacant jobs that will have to be filled in fiscal year 1982, then the real cost of the last fiscal year won't show up until the 1982 books are closed and audited--sometime after the 1982 election.
In fact, despite his current claims to a budget surplus, the mayor himself does not know if the city's agencies saved the $60 million that will be the difference between a deficit and a surplus; final audits of the city government's spending and revenues for 1981 will not be done until February. Some city officials estimate that agencies may not actually have saved the full $60 million, only $43 million. The saving grace was an unexpected jump in revenues of about $24 million, which left the city with its $7 million surplus.
The suddenness of the increase in revenues is another reason for whispers and frowns. Much of the increase in revenues occurred in property taxes that are set and collected on a schedule set by the city. Unless buildings suddenly sprouted out of the ground, there is no explanation for those who suspect that some money was hidden while there were shouts of a $60 million deficit to make for a gee-whiz ending to the deficit.
Whether District residents choose to believe the mayor or not, the financial question that remains is what to do about the long-term debt. City officials are still talking about selling bonds, despite signals from Congress that the bond sale will never be approved. Are the bonds needed as greatly as the mayor would have Congress believe? If the city can save $60 million in half a year, says one congressman, it should have no problem putting aside enough money to pay off its debts without selling bonds.
These questions and doubts about the city's financial good fortune are due mostly to the suddenness with which the talk of budget crisis went away. Whenever an elephant disappears in a flash of hands and abracadabra statements, there will be those who think someone is up to tricks.