Several structural problems affecting the city’s revenue streams — costly state-level functions borne by the city, a commuter-tax ban, federal property-tax exemptions — contributed to the fiscal crisis. However, some problems were self-imposed: irresponsible spending, a snowballing government payroll, unmonitored city contracting and a ballooning debt service.
All of which underscores the importance of the red flag waved this week by D.C. Auditor Kathy Patterson before the D.C. Council’s Committee of the Whole at its hearing on Mayor Muriel Bowser’s fiscal 2020 budget.
For starters, Patterson has cred. She served on the council during the control board period and played a strong hand in helping to return the city to fiscal sanity.
This week Patterson delivered bad news. “Mr. Chairman,” she said, “the budget before you is not fiscally responsible.”
Patterson told the lawmakers that Bowser’s budget represents an 8.2 percent overall spending increase in one year. Given Chief Financial Officer Jeffrey DeWitt’s revenue growth projection of 3 percent, she said, that spending growth “cannot be sustained.” She added ominously, “Growth in spending that exceeded growth in revenue is exactly how the District got into severe financial trouble 25 years ago.”
Patterson proceeded to helpfully identify other warning signs.
The Bowser administration’s reaction to Patterson’s analysis, in contrast, was unsurpassed in sophomoric conceit. A statement issued by a Bowser spokeswoman said: “The comments by Council’s auditors and $2 will get you a ride on the Metrobus. But thanks to the mayor’s Fair Shot budget proposal, you can save yourself reading the Council’s auditor’s comments and ride Circulator free forever.”
That kind of immaturity might be expected of an adolescent. It is not what should be expected from the executive branch of a government.
Patterson’s testimony drew attention to budget realities that aren’t the least bit funny.
●Debt-service cost is the fourth-largest spending line in Bowser’s 2020 budget. “More than we spend on the police department,” Patterson noted.
●The number of full-time D.C. government employees has grown from 33,275 in fiscal 2017 to a proposed 37,585 for 2020 — “a 13 percent increase in our workforce,” Patterson said. (Shades of the bloated D.C. government payrolls during the Marion Barry years, I might add.)
●During that same three-year interval, the budgets of 10 city agencies have doubled, and more than 40 others have had their budgets increase by 20 percent or more.
And the kicker: “Spending is growing faster than population. In 2016, with a population estimated at 660,000, we spent just over $11,000 in local funds per District resident,” Patterson said. “The proposed budget, with a District population of nearly 720,000,” she pointed out, “would spend nearly $14,000 per District resident.”
That said, today’s D.C. government is not in crisis. Unlike in the ’90s, the city can now pay its bills; the doors of Wall Street are open. Thanks to budget control features introduced during the crisis era, the city is sitting on more than $2 billion in reserves. Nonetheless, laser-like attention to financial management is as necessary today as it was — yet not provided — nearly three decades ago.
DeWitt warned the council in his budget testimony that revenue growth is expected to be “slower than prior years.” Population, employment and income growth are also expected to be slower than previously anticipated, he said.
In her State of the District address March 18, Bowser said the state of the city “is strong.” But she acknowledged that D.C. isn’t “financially tsunami-proof” and that it shouldn’t “write checks now that we cannot cash in recessionary times.”
That didn’t prevent her from taking out the government’s checkbook to start writing orders to:
● Spend $16.1 million to make the DC Circulator bus (which does not travel to wards 4 or 7 or north of Columbia Heights) free indefinitely, and expand routes to Ward 5 and east of the Anacostia River;
● Shell out $122 million for a new K Street Northwest Transit Way, which will include a designated rapid-bus lane;
● Increase investment in the Housing Production Trust Fund by 30 percent, to $130 million; increase investment in the Housing Preservation Fund from $10 million to $15 million; and
● Create a new $20 million Workforce Housing Fund.
The days of laissez les bon temps rouler — let the good times roll — with D.C. taxpayer money may soon be over. But not yet.
Recall Patterson’s message: “That is not sustainable.”
Did the council hear? Does the council care?
What about D.C. voters?
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