The Jack Evans Report

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.

  -By now homeowners in the District will have received their annual property tax assessment from the Office of Tax and Revenue. The Chief Financial Officer (CFO) tells us that overall the value of residential properties has declined between 3 and 4 percent, and commercial properties have declined by just over 10 percent. The CFO has also recently released his February revenue estimate report, which will show a decline for FY 2011 of about $71 million for property taxes — largely stemming from the decline in commercial property values. To me, this is no great surprise. Given the state of the economy I fully expected commercial property to start showing a decline in value. An interesting observation from residential property is that the decline is largely on the east side of the city — where foreclosures have been highest — and that values in Ward 2 have remained fairly stable. One policy hitting a number of taxpayers this year is the institution of what’s called the 40 percent “floor” on residential property taxes. This proposal was submitted by the mayor as part of his FY 2010 budget last spring and was adopted by the council. What is the 40 percent “floor?” It basically states that a taxpayer must pay property taxes on at least 40 percent of the assessed value on their home, and no lower. I spoke up against this proposal — in fact, I noted in the budget report of the Committee on Finance and Revenue that this proposal could have some negative consequences on tax bills — particularly for seniors. Now that the bills have come out, we are indeed seeing that. As part of our budget oversight hearings this spring, I will be asking the Office of Tax and Revenue for further data on this matter and its impact, and I’d appreciate you sharing your experiences and observations with me as well. We have heard from residents whose property tax bills have essentially doubled — which back when I passed the 10 percent cap was something I wished to avoid. So, your input is welcome. All this being said, with the downturn in commercial property values — which is a situation that I think will continue for a few years – we need to be especially careful in our budgeting for FY 2011 and onward. Property speculation, both residential and commercial, led to the bubble which collapsed along with Wall Street in the fall of 2008. I do not think we will return any time soon to the days of quarterly revenue increases that we can use to continue to expand our government and pay the bills. In short, we have to create a post-bubble budget that lives within our means. The most important part of that exercise is restraining growth. Dr. Gandhi, our Chief Financial Officer, also let us know that to continue the current functions of the D.C. government from FY 2010 to FY 2011 there is a growth of over $400 million, even if we add no new programs or spending. So are there hard choices ahead? Yes there are, but I think between the mayor, the council, and the CFO we are ready to make those difficult decisions. The author is a city councilmember representing District Ward 2.

Just over a year ago, I become chair of the Finance Committee of the Washington Metropolitan Area Transit Authority board. Fast-forward a year, and...

  -Over the last week, I have received lots of correspondence from constituents regarding the surplus disposition of the Hurt Home in Georgetown — particularly with respect to the proposed size of the redevelopment, as well as its potential impact on neighborhood parking, both of which are concerns I share. This is a matter being actively considered by the council, as surplus property dispositions must be approved legislatively, and thus your input is both timely and welcome. A vote on this matter is not likely to be held until July 13, if then. But first, a bit of a history of the Hurt Home. Built circa 1897, it is believed that the Hurt Home was originally used as an assisted living facility for the blind. The District obtained the property in 1987 from the Henry and Annie Hurt Home for the Blind and the Aid Association for the Blind of the District of Columbia, two non-profit organizations. Most recently, the building housed the Devereux Children’s Center, a residential and psychiatric program for foster children. For the last five years, the Hurt Home has been vacant. In 2009, D.C. made the decision to sell it, as it did not suit any current District function and would have been prohibitively expensive to renovate or maintain in its current form. In June 2009, the District issued a solicitation for proposed uses of the property and by September, only one submission was received. The proposal by the Argos Group, which included 35 apartment units, was presented to both the ANC and the Citizens Association of Georgetown during the fall, and a project award was made in April 2010. The District held a surplus/disposition meeting at Jelleff on June 9 and the council’s government operations and economic development committees convened a joint hearing on June 16 for public input on the matter. That hearing will be continued on July 1 at 3 p.m. in Room 123 of the Wilson building. If you would like to testify at that hearing, or submit testimony for the record, please contact Priscilla Ford at 727-6684 or pford@dccouncil.us. I am concerned that the current plan contains too many proposed units, which would contribute to an increase in the demand for parking in the neighborhood. I am committed to working with the community as well as the developer to make this a more reasonable proposal and address the community’s concerns. Should the city council decide to approve the surplus and dispose of the property from its inventory, the selected developer would then begin the process of presenting proposed plans to the ANC and Old Georgetown Board for the necessary approvals to obtain permits for the project. This part of the process, as well as any Planned Unit Development (PUD), would also include opportunities for public comment and discussion about the project. I am hopeful the proposal can be improved considerably before it gets to that point. A reuse of this property would be great and very much welcome, but I would like to see it occur in the best possible way for the neighborhood. The author is a city councilmember representing District Ward 2.

Carol Inman Glover was a mother of two and a grandmother of three. Like thousands of people in the D.C. region, she used Metro...