Like many jurisdictions around the country, the District again faces both a decline in tax revenue due to the economy and a number of “spending pressures” that need to be addressed. Just prior to the Thanksgiving break, Mayor Fenty submitted his proposed gap-closing plan for FY 2011, which began on October 1. In addition to this plan, the Mayor also immediately placed a freeze on payroll, hiring and new procurements at the start of the fiscal year. As an exercise in financial management, it behooves all of us to make these important budget decisions early in the fiscal year in order to achieve the highest level of annual savings possible. The Mayor’s plan can be accessed online at: tinyurl.com/27n3cr9.
The Council held a public hearing on the Mayor’s proposal on November 30, which lasted well into the evening. Chairman Gray (now Mayor-Elect) has also held informal conversations with Council members, which will lead to his own plan, a revision of the Mayor’s plan, on which the Council will vote on December 7.
The budget gap we face in FY 2011 is a relatively manageable $188 million. I am, by and large, supportive of the Mayor’s approach, although there are cuts I have concerns about as every member does. To some extent, it would be foolhardy to restore some of these spending cuts now only to have to address them again in April. At that time, Mayor Gray will submit his FY 2012 budget to the Council, and these programs will likely be on the chopping block all over again to address what will be a $350 million shortfall in FY 2012.
Several principles are guiding my thoughts on our budget deliberations: 1.) We cannot continue to live beyond our means, which means not raiding our much-depleted fund balances. 2.) We need to plan for what I think will be continued austerity and a weak recovery from the recession. 3.) We need to focus our resources on the core functions of government.
During the “boom years” of the 2000s, before the financial crash, we added all kinds of new spending and programs to the District budget. We need to take a good hard look at these programs and ask ourselves whether they are absolutely necessary.
The challenges seem daunting on their face, but I believe we can successfully address them in this round. I do think the FY 2012 budget will be a far bigger challenge, but Mayor Gray will have a few months (rather than a few weeks) to look at programs citywide in a systematic way. But for the moment, I think we are moving in a prudent fashion to address our immediate problems in FY 2011.