The Post asked the candidates in the at-large race for D.C. Council: “The D.C. Council is now reviewing Mayor Gray’s 2012 budget proposal, which Gray says includes $187 million in spending cuts and $127 million in tax and fee increases. How would you adjust those numbers? What does his plan get right and what does it get wrong?”
Update: A response from Dorothy Douglas, another candidate who is seeking this seat, has been added to this feature since it was originally published.
The mayor’s budget proposes some important investments — particularly in education and housing. But increases in spending for a number of city agencies should be pared back at a time when critical services are on the chopping block.
I am pleased the mayor makes education his top priority in the budget. The proposed $77 million increase for the D.C. Public Schools is on target, so long as the new money is distributed equitably. We cannot afford to go backward on school reform in any part of the city — even during tough budget times. Regrettably, a large portion of the new spending for the schools would create positions designated for central administration, while some positions at the schools themselves are being eliminated.
This proposed budget continues a trend that has gone on for years in the District: Most of the spending cuts are derived from the elimination of agency programs, not from reductions in agency personnel. This trend cannot continue if we hope to achieve real savings. We have reached a critical point where business as usual will no longer be sufficient to close our budget gap and fund our most critical needs.
No one wants to eliminate positions. But it is clear the steady growth of the District government has put us in the difficult position of cutting services for those who need them most or raising taxes.
Rather than raising taxes, we owe it to District taxpayers to deliver the services they need with the revenue we already have.
Mayor Vincent Gray recently released his fiscal 2012 budget, with an expected gap of more than $300 million. The mayor offered a variety of ways to close the budget gap, including cutting services and raising taxes.
The budget contains close to $190 million in cuts, most of which would fall on human services and other programs for low-income residents. Two of every three dollars of cuts will affect housing, health and basic supports for low-income residents.
Before cutting services or raising taxes, Gray and the D.C. Council must make a concerted effort to collect business taxes already on the books, collect millions in outstanding fees and fines, and eliminate fraud, waste and abuse. Additional money can be found and saved in a variety of places before cuts to the social safety net should even be considered.
I support implementing “combined reporting,” a corporate income-tax provision that prevents large, multistate corporations from being able to avoid paying taxes on the profits they earn in the District.
In addition, the District must work to rein in cost overruns on capital improvements, collect hundreds of millions of dollars in outstanding parking tickets, harness overtime and make sure we are collecting all Medicaid reimbursements.
In contrast to the mayor’s budget, I have long proposed a complete overhaul of our tax system and the creation of a six-tiered progressive tax. While this would lessen the tax burden for some of our city’s neediest residents, it would also more equitably distribute the burden and increase revenue without a dramatic increase in taxes.
A case cannot be made for tax increases or spending cuts without first addressing why the proposed budget does not have a component for additional revenue collection in fiscal 2012. The budget ignores Medicaid reimbursements, in excess of $340 million, that are due from the federal government, real estate tax liens in excess of $100 million, and unpaid parking tickets in excess of $300 million. Approximately $25 million can be collected if we repeal tax-exempt bonds for those states that tax our bonds. Proper marketing of the DC-Net fiber-optic communications system can generate millions of dollars. In fact, it was created after the attacks of Sept. 11, 2001, to provide excellent communications and to generate in excess of $52 million annually from the federal government. We are receiving only about $1.7 million.
These sources of revenue must be addressed, without raising taxes.
There are concerns that the proposed budget increases spending by $322 million. This amount is odd because we were told that the projected budget deficit for 2012 is $322 million unless we act quickly. Clearly, there must be reconciliation between the alleged deficit and the proposed increase in spending.
Combined reporting is featured in this budget to generate $22 million for fiscal 2012. This same number is used to balance the fiscal 2011 budget. However, this money is not being collected because the regulations for implementation have not been shared and corporations have not been advised on how combined reporting works.
This budget is a work in progress.
By raising taxes, Mayor Gray’s proposed budget condones the reckless spending habits we’ve seen from City Hall for too long. Politicians treated the District’s tax base and savings accounts as though we had inexhaustible funds; we should not have a deficit, and I will not support any tax hikes. Instead, we must trim government spending by reforming the many District agencies that are bloated and inefficient.
The District has lost over $340 million in Medicaid reimbursements; that squandered money alone is enough to cover our current budget gap. The dysfunctional Department of Health Care Finance, which is responsible for processing Medicaid, must be overhauled. Management issues that are years old still plague the department. Shockingly, the Gray administration placed the now-infamous political appointee Sulaimon Brown as a “special assistant” in the department.
I also support legislation introduced by D.C. Council member David Catania (I-At Large) to modernize the District’s pension system. This common-sense strategy for changing how we calculate cost-of-living adjustments and other reforms, already adopted in other states, would save taxpayers an estimated $242 million.
Finally, we need to look at contracting and procurement. Millions of dollars are spent every year on contracts that undergo little scrutiny. Too often, deals are handed out to politically connected parties. I’m not beholden to any of these special interests. I’ll scrub their contracts for waste and demand performance.
Through increased oversight, accountability and innovative policies, we can ensure a fiscally healthy District not just this year but for years to come.
Mayor Vince Gray’s arrest during a protest of federal riders cutting off funds for local welfare programs and the fight against the spread of HIV — while pushing House Republican ideology into local policy — sends the message that Washingtonians do not want Congress meddling in our financial decisions.
However, this bold support of services for low-income citizens is not apparent in his fiscal 2012 budget. In many cases, you can make the argument that Gray and the federal budget cuts do the same thing — cause low-income citizens to shoulder the load of the recession.
Two-thirds of Gray’s cuts came from health and human services, including programs and services that help support children and low-income families. The height of a recession is no time to cut these programs; high unemployment combined with a reduction of services could increase the crime rate, jail population and homelessness.
This is not Gray’s first effort to cut funds for welfare services without regard to the long-term well-being of the people he would be affecting.
While D.C. Council chairman, Gray supported legislation that placed a cap on the number of years welfare recipients could receive benefits — without a detailed plan for helping families make the transition from public assistance.
Now Washington’s low-income residents will again be asked to suffer the consequences of elected officials’ mismanagement of city funds. And while Gray’s symbolic protest on behalf of the District’s right to fund our government programs was noble, reducing cuts to health and human services would have been something struggling families could take to the bank.
Mayor Gray’s proposed budget was one step forward toward a progressive, more sensible tax system in the District and one step backward toward increased inequality, because he is proposing to balance the budget on the backs of the poor.
During tough times, everyone must share the load, from residents to corporations operating in our city. I applaud Gray’s proposal to close the combined reporting corporate tax loophole that allows corporations earning income in the District to shift their profits to other jurisdictions when they report it. The absence of a combined reporting requirement will deprive our city of $23 million in corporate tax revenue in the upcoming fiscal year alone, according to estimates.
Regrettably, though, Gray’s tax increase proposal of 0.4 percent for income above $200,000 goes only part of the way toward changing an antiquated system in which the top tax bracket begins at $40,001. This increase needs to be 1 percent to bring in the amount of revenue needed to avoid catastrophic cuts to our social safety net.
The major error in Gray’s proposed budget is the failure to preserve the safety net (which includes vital services such as child care and rental assistance, services that people need to survive in our city). Human services comprise roughly 26 percent of the budget but face a withering 67 percent
58 percent of Gray’s proposed cuts. Necessary cuts should be made proportionally according to each program’s share of the budget, instead of burdening the most vital programs with the steepest cuts.
For starters, we have to address why the budget period is such a big deal in the first place. With a personal or business budget, minor adjustments are often needed from time to time. Key word: Minor! Why, when it comes to our city, do mountains have to move for budgetary balance to be achieved?
D.C. politicos have come to treat the annual budget crisis as a proverbial rite of passage. This yearly fiasco provides a chance for the various committee heads and agency directors to be spotlighted on the dais like children with new shoes on Easter. Instead of prolonging this unnecessary event, I would encourage the mayor to infuse a paradigm shift in the District’s mindset.
For years, D.C. mayors have established revenue-generating measures through corporate agreements, governmental contracts, etc. Unfortunately, some of those same mayors have not successfully implemented these efforts, leaving millions uncollected. For starters, I would get the mayor to collect what’s owed to the District. Medicaid reimbursements quickly come to mind.
Second, I would push the issue of collecting outstanding fees and taxes owed the District by residents and visitors (i.e. past-due tickets). Without raising or imposing additional taxes, the D.C. budget can be balanced and even brought into surplus.
Last, I would suggest that programs and departments be assessed to determine which should be eliminated or merged. This would yield valuable information for developing partnerships between the government, businesses, nonprofit organizations and communities. At present, the trend is to parade before the D.C. Council those programs slated for cuts. This would be a little different, because only programs identified as ineffective would have to endure such a procession.