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Budget Crisis Hearing Witnesses Detailed Impacts, Suggested Fixes

By Anthony L. Harvey

A dramatic DC budget crisis has greeted newly elected Mayor Vincent Gray and DC Council Chair Kwame Brown — who assume their new positions on January 2nd — and their 11 City Council colleagues as the current session of the Council nears its December 2010 conclusion and the new Session’s January 2011 start date draws nigh.

Current fiscal estimates reveal a shortfall of $188 million for the Fiscal Year 2011 budget, which  began this past October 1st. A greater shortfall of $450 million is estimated for the Fiscal Year 2012 budget. Caused by overspending in operational budget accounts — compounded by successive draw-downs over the past several years from “rainy day” and surplus fund accounts — and a shortfall in DC tax revenues due to the current recession, spending cuts are being called for by out-going Mayor Adrian Fenty. Mayor-elect Gray, along with the Council’s leadership — Chair-elect Kwame Brown and long-time Committee on Finance and Revenue Chair Jack Evans — broadening the concerns and remedies to such “third rail” considerations as higher taxes and increased fees, for example.

With a set of draconian budget revision recommendations — primarily proposed cuts in social service and small business assistance programs — Mayor Fenty threw down the gauntlet to the Council. Described by Joslyn Williams, president of the AFL-CIO’s Metro Washington Council, the Mayor’s proposed slashing reductions in the District’s safety net, as being tantamount to the “shredding the fabric of our community.”

Williams joined with others — led by Ed Lazere of the DC Policy Institute — in calling for an increase in the DC income tax of one percent for those with taxable incomes above $200,000 or $250,000 for married couples. In contrast, the editorial board of the Washington Post had lavish praise for Mayor Fenty’s approach of cutting programs and not raising taxes as the solution to the District’s budget crisis, characterizing it as the responsible and prudent approach to sound municipal budget management.

Lazere’s proposal, which he estimated, using data from the District’s Chief Financial Officer, would raise $75 million in additional income revenues, was subject to a withering cross-examination by at-large Councilmember David Catania, who characterized it as class warfare that would raise far, far less than $75 million — no more than 10 percent of that amount. Catania proposed what he described as the California approach to raising income tax revenue in a budget crisis by simply increasing everyone’s income tax by one-fourth of one percent. At-large Councilmember Michael Brown, however, came to Lazere’s defense by quoting figures from the Chief Financial Officer that projected $45 to $76 million in increased income tax receipts with a one percent increase over the budget years of 2011 to 2015. (Only nine months remain in Fiscal Year 2011.)

The overwhelming majority of the 150 witnesses who appeared before a November 30th hearing on the out-going Mayor’s budget proposal — which he dropped on the Council the previous week and then failed to appear at its November public session to formally present these revised budget figures — testified in strenuous opposition to the Mayor’s proposals for cutting social services affecting the most vulnerable of the District’s residents: poor children; according to recently released U.S. Census figures, 40 percent of African-American children in the District are living in poverty and, out-of-work adults, the homeless, those depending on the city-supported feeding program.

Strong criticism was also articulated by numerous small business and neighborhood economic revitalization witnesses for what they characterized as counter-productive cuts to programs showing positive results in bringing back mixed commercial/residential neighborhoods and increasing DC property and sales tax and business licensing receipts.

What seemed especially noteworthy was the seriousness of the witnesses and the social worth of the programs being proposed for either further reductions in spending or for total elimination. A proposed drastic cut of $2.6 million in the District’s program for subsidizing grandparents who are raising grandchildren was countered by Judith Sandalow of the Children’s Law Center who sounded the alarm of further family homelessness and additional foster care placement for children at risk should such cuts occur. As the hearing’s first witness, Council Chair Gray commended Sandalow for proposing program cuts in other areas and for identifying prospective federal grants not presently being applied for by District program officials. Another witness, an especially articulate grandmother, echoed Sandalow’s assertions.

The range and caliber of witnesses was equally impressive, and their concerns for small as well as large cuts in programs were poignantly described. A panel of jurists consisting of the presiding judges of the District’s two highest courts — Chief Judge Eric T. Washington of the DC Court of Appeals and DC Superior Court Chief Judge Lee F. Satterfield — were joined by Ronald Flagg, president of the DC Bar Association and Peter Edelman, Chair of the DC Access to Justice Committee — eloquently pleaded for the elimination of proposed cuts to the District Access to Justice Program, offering telling detail of what these cuts would mean to legal services to the indigent and to those who cannot afford basic legal services.

An equally impressive panel consisted of four Vietnamese-American teenagers, three boys — Paul Le, Thien Vo, and Tony Nguyen, who attend Wilson High School, and one girl, Chi Vo, a recent arrival in DC whose testimony was in Vietnamese and summarized by the director of the Vietnamese-American Community Service Center. The Center’s remaining $46,000 DC grant is proposed for elimination, yet it is the only community service in the District for the Vietnamese-American community. Accounts of the Center’s services by the three boys and of their experiences as Wilson High School students in preparing to apply for college admission were especially moving.

The Mayor’s proposal to cut all funds to implement the new healthy school food services program seemed a direct slap at the Council, which had only recently enacted this highly praised initiative to combat obesity among school children and improve the healthiness of school food offerings. Historic Main Street programs of both the transportation and public works departments that work in combination with Business Improvement Districts were strongly supported and eloquently defended by a dozen public witnesses. And program and volunteer officials for many of the District’s best known — and most respected — social services agencies were among later witnesses; these included the Washington Legal Clinic for the Homeless, Manna, Bread for the City, Covenant House, and Martha’s Table.