Mayor Marion Barry has ordered a four-day furlough of up to 26,000 city employees this summer and cutbacks in programs and some city services in an effort to offset a projected $95 million budget deficit, District officials said yesterday.
The furlough, scheduled to take effect in August, is part of a proposed fiscal rescue package that includes new taxes on public utilities and commercial property owners and spending cuts in human services, job training and other government programs.
Barry reviewed and approved the package over the weekend, according to City Administrator Carol B. Thompson.
Under the planned budget cuts, the administration will move unilaterally to reduce AIDS education programs, drug treatment services, the mayor's summer jobs programs for youth, recreation programs, street and alley cleaning, guard service at government-owned buildings and a variety of other activities.
Departments will instruct employees to take four days of unpaid leave on a staggered schedule designed to minimize the impact on the day-to-day operations. The furlough would not affect police, fire and correctional officers or employees at D.C. General Hospital and other round-the-clock operations, according to D.C. officials.
Also, the public school system and other independent agencies would be unaffected. Officials said precise details of the furlough remain to be worked out.
The administration, facing a major cash-flow problem, has the authority to adopt the furlough and some of the budget cuts on its own, but the tax package would require the approval of the D.C. Council. The administration submitted a bill to the council late yesterday containing the tax proposals.
The furlough drew a cool response from council members and union representatives, who said the furlough plan violates the spirit of the city's collective bargaining agreements.
"Once again, city employees are being asked to bite the bullet for mismanagement of the city government," said David A. Schlein, head of the local chapter of the American Federation of Government Employees, which represents nearly 6,000 members of the city's 48,000-member work force. "The furloughs are not a solution for what is clearly a long-term problem."
D.C. Council Chairman David A. Clarke (D), a candidate for mayor, said: "I don't like it. It has a scare quality to it . . . . You make a deal with the people, you have to keep the deal."
Council member Wilhelmina J. Rolark (D-Ward 8) said the furlough plan would harm poor and moderate-income people who can least afford it, and accused the administration of whipping up fear "to force a tax increase."
Robert Pohlman, deputy mayor for finance, defended the furlough in testimony before the council yesterday, saying that city employees were bearing only a small part of the burden of the overall tax and spending plan.
In response to Rolark's assertion, Pohlman said the city would need to carry out furloughs even if the new taxes are approved.
The administration has proposed reducing spending in the city's $3.1 billion operating budget by $45 million, while the proposed new taxes would raise about $40 million for the fiscal year. The furlough would save an estimated $4 million, according to officials.
Pohlman said a furlough is necessary "to have even a chance at balancing the budget."
Labor contracts require the city to formally give public employee unions 30 days' notice before imposing a furlough. Notice will go out by early next week, according to officials. The unions might propose alternatives to a furlough, such as forgoing a 2 percent pay increase this year, but city officials said that is unlikely.
The District government has struggled with mounting fiscal problems for several years, but the problem became especially acute this year because of declining tax revenues and overspending by the Department of Human Services and the prison system.
Some D.C. officials have expressed concern that the city might not have enough cash on hand this summer to meet payroll and other financial obligations. To balance the budget and raise cash, the administration is proposing a 20 percent surtax on commercial property taxes, as well as a repeal of the personal property tax exemption for public utilities.
The council rejected the utility tax proposal earlier this year, and several council members indicated yesterday that they had little interest in supporting it now.
In a separate action, the council's Finance and Revenue Committee voted yesterday to reduce the tax rate on residential property from $1.06 to 99 cents per $100 of assessed value, rejecting Barry's proposal to keep the rate unchanged.
The committee also voted to authorize the city to borrow up to $300 million at the start of the fiscal year beginning Oct. 1, in an effort to avert an anticipated cash shortfall.
Committee chairman John A. Wilson (D-Ward 2), said the city is running a serious cash-flow shortage. The city is projecting it will have less than $25 million in the treasury at the end of September, compared with $50 million last September and $220 million four years ago.
"We don't have any money," Wilson said. "There's a good possibility that we could miss a payroll in September or October."