APPEARING BEFORE the D.C. Council at the start of its consideration of Mayor Muriel E. Bowser’s (D) proposed fiscal 2020 budget, the city’s independent chief financial officer, Jeffrey S. DeWitt, warned of “yellow flashing signals” in the economy. His comments about a slowdown in population, job and income growth would seemingly suggest the need for the District to slow down spending. Instead, the mayor’s budget grows spending faster than the economy. In its budget deliberations, the council must decide whether that is prudent.
The $9.9 billion general fund budget unveiled by the mayor last month represents an 8.2 percent increase in spending over the current year, outpacing the growth in personal incomes or wage and salary earnings. To pay for the rise, the budget proposes use of past savings and increases to commercial real estate taxes, though the District already has some of the highest commercial real estate and transaction costs in the area. The proposed budget got an unusual rebuke from D.C. Auditor Kathy Patterson, who said it was “not fiscally responsible” and could lead to the excesses that resulted in the appointment of a federal control board in the 1990s.
Mr. DeWitt has certified the mayor’s budget and four-year financial plan as balanced, and it is hyperbole to suggest the District — with its Triple-A bond rating, consistently balanced budgets and strict fiscal controls — is in danger of losing local control of its finances. Ms. Bowser has adhered to the tradition of sound management established by former mayor , and she rightly has set affordable housing and public education as priorities. But concerns about the sustainability of this spending path should not be dismissed.
Though administration officials argue that much of the increased spending is in one-time investments and not continuing social programs, color us skeptical about the willingness of city officials to cut back on expenditures in the future. If, as the mayor’s budget proposes, $130 million is set aside in 2020 for the Housing Production Trust Fund, what are the chances of it getting less in the future? Does that mean more taxes are in the offing in future years? And is the D.C. Policy Center, a centrist think tank, correct in its assessment that tax policy is being so haphazardly applied it could impact the economic growth on which the District’s future rests?
The council, which must pass a budget by the end of May, has had an unfortunate tendency to simply add more to the mayor’s budget. Last year, for example, it made last-minute changes to the commercial tax rate to generate more funding for the arts and other programs.
Already this budget session there has been criticism of the mayor’s budget for what it doesn’t include. The council needs to pay attention to the “yellow flashing signals” that Mr. DeWitt talked about and ask the hard questions about what the District can afford.