Mayor Marion Barry yesterday proposed a hold-the-line $1.99 billion operating budget for fiscal 1984 that cuts back social services, requests modest increases for police and fire protection, and leaves open a possible increase in the property tax rate.
Although the new budget called for no increases in property, sales or income taxes, it was balanced partly on the assumption that the City Council would approve a $26 million package of other new taxes and fees and a 35 percent increase in water and sewer charges. The council declined to approve similar increases last year.
In his budget message to the City Council, Barry said his proposal, a 5 percent increase over the current $1.89 billion level, aims to reduce the number of residents who depend on city social programs, to improve basic city services and create jobs.
Barry's budget, which faces 50 days of council review before it is sent to Congress for final approval, differs markedly from the upbeat "budget for the people" the mayor presented a year ago, at the outset of his reelection campaign.
Back then, the mayor declared that the city's most serious budget problems were behind it as he proposed whopping increases in spending for housing, economic development, job training and programs for the elderly. The document he unveiled yesteday, entitled "Meeting citizens needs during difficult times," underscored the return of hard times, partly because of shortfalls in the city's once-optimistic revenue forecast.
Barry pledged last year to balance the 1983 and 1984 budgets without laying off employes or increasing major taxes. His new budget would cut 525 positions from the city's 30,944-member work force by attrition.
Barry said in his budget message that he would postpone a final decision on property tax rates until July. He expressed concern about the existing tax burden and added: "I am determined that property tax burdens on citizens will increase no more than the rate of inflation for 1984."
Barry has recommended a 4 percent increase in spending for the Department of Human Services, the city's largest agency, but he wants to tighten eligibility for income-maintenance programs and eliminate a $14-million general public assistance program that aids people who are temporarily out of work because of illness or injury. Some current recipients would qualify for other programs.
The mayor also took the advice of his transition advisory committee in seeking new restrictions on Medicaid reimbursements, charging families that use city emergency shelters for more than a month, and imposing a sliding fee schedule for city-operated day-care centers.
Funding for police protection, an area Barry stressed during his reelection campaign last year, would be increased by $8.9 million, or 5 percent, to cover pay increases and fringe benefits. The police force would remain at the congressionally mandated level of 3,880 uniformed officers.
The fire department, which would receive a 5 percent increase in spending, would have to absorb part of its pay-raise cost and would have to significantly reduce the cost of overtime to stay within budget. The city's only fire boat, which patrols the Potomac, no longer would be staffed with a full-time crew under the proposal.
Barry's proposal to provide the public schools next year with about $18 million less than the $336-million requested by the school board may have set the stage for a major battle over education in the city.
Parents United For Full Funding, an activist parent group, and some members of the school board indicated yesterday they would fight Barry's proposed $318.5-million education budget when it is considered by the City Council.
"We are not saying that we are not willing to take a cut," school board President David Eaton said yesterday. "But we are not prepared to take an $18 million cut. We will have to go through the City Council and bring in the community. We have to make it very clear that this is not acceptable."
Last year, under pressure, Barry added $10 million to his initial budget for the schools and later went along with a council decision to add about $20 million to that budget.
Overall, the proposed new budget earmarks no funds for a 7-percent pay increase owed most employes next year. City officials say that all but a handful of city agencies will have to absorb the cost of the pay increase, possibly through additional program cuts.
"It's definitely a hold-the-line budget," said Gladys W. Mack, the mayor's top policy adviser and former budget director. "It seeks to preserve and maintain the basic program of services, it presumes productivity improvement, and it presumes some reduction in the base of city employment in order to fund the 1984 cost-of-living increases in most areas."
In the area of transportation, the mayor has proposed cutting costs by shifting $11.9 million in street light and traffic signal costs to PEPCO, charges the utility would be expected to pass along to homeowners and businesses in the form of higher electric bills.
Barry also recommended a $98 million payment to the Washington Metropolitan Area Transit Authority for operating subsidies, a level that is significantly less than Metro requested.
He proposed cutting by more than half the $5.6 million subsidy now paid to Metro to provide reduced fares to school children. The subsidized fares would be available only for students who demonstrate economic hardship or physical disability.
City financial experts say that mounting costs to the city for operating Metro and for covering Medicaid reimbursements are among the chief cause of the city's current budget problems, including a potential $110 million deficit that officials are currently trying to head off through program reductions.
Alphonse G. Hill, the newly appointed deputy mayor for financial management, said yesterday that balancing the new budget hinges on the council approving several tax proposals, including a gross receipts tax on public utilities that would raise $8.2 million, a variety of increased user fees totaling $3.3 million, and increased motor vehicle registration fees totaling $2.9 million.
The gross receipts tax, like the proposed street and traffic light charge, could be expected to raise city residents' utility bills. City officials yesterday could not estimate how much utility bills might go up, but said any increase would be very small.
The proposed budget also assumes that Congress will grant a $25-million increase in the federal payment to the District, to cover costs including a $12.2 million shortfall in the city's retirement funds; an $8 million increase for D.C. General Hospital, and a $4.8 million increase in operating funds for St. Elizabeths Hospital for the mentally ill.
City officials said yesterday they are still negotiating with the federal Office of Management and Budget to avoid paying about $30 million for patient care at the federally operated hospital. Officials also said negotiations are continuing with D.C. General Hospital to provide sufficient funds to avert a threatened shutdown later this year of the city-run facility.
Hill said at yesterday's briefing that Barry's proposed budget could face trouble if the council fails to act on the mayor's tax proposals and the Congress supports the OMB effort to increase the city's contribution to St. Elizabeths and insists, as it did this year, that the city set aside up to $20 million to help retire its long-term debt.
"If you're going to have all those 'ifs' come true, sure there would be" problems, Hill said.
The mayor did not include funds in his fiscal 1984 budget to help retire the city's $309-million long-term debt. Last year, the council transferred to the public schools funds Barry had earmarked for debt retirement. He said this time he will leave it up to Congress to decide how much should be reserved for the deficit.
Yesterday, budget aides said they will present a new long-range plan to Congress to take care of the debt when they submit the 1984 budget for congressional review this spring.
Officials also confirmed yesterday that the city would attempt to enter the private bond market for the first time later this year to finance a portion of the city's capital improvement program.
The District currently borrows from the U.S. Treasury to finance its major construction projects. But the Treasury is cutting back the city's borrowing authority from $145 million this year to $115 million in 1984 and will then cut off the loans altogether.
Barry has proposed authorizing $111.4 million of new construction in fiscal 1984, including the replacement of Engine Company No. 12, the oldest fire station in the city, located at North Capitol and Florida Avenue NW.
Along with the 1984 budget proposal, the mayor's aides yesterday also released preliminary figures on changes in the current 1983 budget that were designed to avert a potential $110 million deficit caused by a decline in projected revenues and overspending by agencies.
The figures included cuts in some agencies, including the Department of Recreation, Office of Planning and Development and the D.C. Housing Finance Agency, and increases in other departments, including the Metropolitan Police Department.