Mayor Vincent C. Gray is accused of handing plum city jobs to political supporters and their relatives. D.C. Council Chairman Kwame R. Brown ordered a pair of “fully loaded” Lincoln Navigator luxury SUVs.
Gray and Brown, and their political capital, to start. District residents, and their confidence in government, too. But the city’s poorest residents, the ones most dependent on government, could take the greatest hit.
On Friday, Gray (D) will release his first mayoral budget plan, one that will address a $322 million gap between anticipated revenue and current expenditures. There are no easy options: Hundreds of millions of dollars in federal stimulus money have dried up, and Gray has committed, publicly to voters and privately to Wall Street, that there will be no dipping into the city’s dwindling savings, which have shored up the budget in recent years.
Two options are left: Cut spending, or raise taxes. And in a city buffeted by scandal — particularly allegations concerning the use of city resources — selling residents on tax increases is considered risky business in the John A. Wilson Building right now.
“Definitely, there’s the perception out there that we are spending money frivolously,” said council member Yvette M. Alexander (D-Ward 7). “Until we clear that up . . . we have to be very careful.”
“Very careful,” to be clear, translates into “no new taxes.”
There is an essential unfairness comparing perception to reality. Brown’s Navigators cost the city about $33,000 — that’s .01 percent of the budget gap. The short-lived salary of Sulaimon Brown, Gray’s recent bete noire, was $110,000 — or .03 percent of the budget gap.
But as much as the city’s top leaders would like to use the high-stakes budget process to move beyond their recent troubles, it might be hard to divert taxpayers’ attention by asking for more from their wallets.
Brown (D), in particular, has been drawing a hard line in recent weeks. In a visit to a group of Ward 3 voters on Tuesday, the embattled chairman pledged to make “tough decisions” to balance the budget — tough decisions that, he promised, would not include raising income, property or sales taxes.
Gray has been cagier about his taxation intentions, having warned residents repeatedly since his primary victory last fall to prepare for “sacrifice.” In his State of the District address Monday, he said he was “look[ing] for cost savings before considering revenue enhancements” — without ruling out revenue enhancements.
Early indications from mayoral budget officials have emphasized that Gray plans to protect his administration’s priorities — namely, jobs, education and public safety. Notably not on that list — and representing a sizable portion of the city budget — are the social services that comprise the city’s safety net.
Among the programs most at risk:
• Homeless services: The District’s shelter for homeless families, at the former D.C. General Hospital, has been running at or above capacity for months. Any cuts could put poor children on the streets.
• Temporary Assistance for Needy Families: The federal welfare program is heavily supplemented by local taxpayer funds, which were significantly cut back in December. Gray hinted Monday that more cuts are to come.
• Affordable housing: Funding for developers of low-income housing has foundered in recent years. Things are improving, but will Gray take the money to fill other gaps? Also at risk: A program that helps struggling city residents pay their rent — and stay out of shelters.
• Health care: The District runs the D.C. HealthCare Alliance, a program that provides medical insurance to people not poor enough for Medicaid but not wealthy enough to afford private insurance. It has helped the District attain one of the nation’s highest rates of insured residents, but it’s costly.
A proposal floated in December to offset deep spending cuts with an income tax increase garnered the support of five council members — two votes short. Assuming the five votes hold, others are in play: Phil Mendelson (D-At Large) said Thursday he’d support filling as much as one-third of the $322 million gap though an increase in “broad-based taxes” — as in sales, income and property. Alexander said she’d also entertain a tax increase, but as a “last resort.”
Michael A. Brown (I-At Large), one of the five, said he doesn’t think the scandals have had much of an effect on the tax debate, noting that Chairman Brown and the mayor voted against the December proposal.
But a lot can change in a few months. Tommy Wells (D-Ward 6), who also supports an income tax increase, said he has heard from parents who have seen public school budgets cut. “Already they’ve been very frustrated to see salaries increased and the government buying luxury vehicles,” he said. “The budget will continue that discussion.”