-Next week on Wednesday, May 26, the D.C. council will vote on the fiscal year 2011 budget. The District’s next fiscal year runs from October 1, 2010 through September 30, 2011. The current budget was prepared by the mayor beginning in October 2009 and submitted to the council on April 1, 2010. By law, the council has two months to hold hearings and pass a budget. It is then sent to the mayor for his veto or approval. If approved, it is then sent to Congress for their approval by October 1, 2010. Because of the slowdown in the economy, the city’s revenues are no longer increasing and, as such, reductions need to be made in our spending. The mayor’s FY 2011 budget is balanced and relies on significant spending cuts and increases in a number of fees and penalties. It also relies on spending additional money from our fund balance, i.e. our savings account. I have analyzed the mayor’s budget carefully and have the following observations. The cuts he recommends are painful but necessary. The amount the city spends has increased significantly the past 10 years and now it is time to reduce spending. Tough choices need to be made. The fee and penalty increases are problematic. Our residents and businesses are tired of being nickeled and dimed to death. People don’t want to pay this government any more money. Thus the proposal to increase parking meter fees and charge more for basic licenses, etc. should be reversed. Finally, spending more from our savings account to fund agency operations is bad policy. In 2007 our fund balance was $1.6 billion. It is currently $920 million and would be $600 million in 2012. The city would have spent $1 billion of its savings, which will really hurt our position in the credit market. If the council does not accept the mayor’s increases in fees and does not wish to spend from the savings account, it must identify additional funds to balance the budget. In addition, many members of the council want to add back the mayor’s cuts and unrealistically fund new programs. This also takes new money. Several council members want to raise taxes to pay for this spending. Nothing could be worse for the city. Increasing taxes in a recession is bad policy because it allows the spending to keep increasing, forcing us to increase taxes again the next year. The proposals put forward include, among other things, a raised income tax, new taxes on tax-free bonds, and extending the sales tax to services. Given that the District is ranked 51st in tax burdens, it is very counter-productive. I will continue to work hard to balance our budget without further burdening our residents and small businesses. The author is a city councilmember representing District Ward 2.
-This week the Council concluded the first, and most important, steps of approving a fiscal year 2011 budget, which will begin Oct. 1. I voted against the final plan as I believe we are relying on what are essentially a few too many "one time fixes" to balance our budget. I believe in some respects we have pushed the hard decisions to next year rather than take the more difficult, yet more thoughtful, route of rethinking the District government to realign our service needs with our actual resources. Underneath our considerations this year, I believe, is a fundamental structural problem which we have left unaddressed. We have to live within our means. The District government does not have a printing press for money, and I think we ignore the very real downturn in our revenue — particularly in commercial property taxes -- at our peril. So that leaves us with really only one choice — getting serious about reinventing government, reevaluating the efficiency and scope of the services we provide, and realigning the size of our government to be more in line with our actual resources. What we have done instead is this — we are continuing to spend down our accumulated fund balances (savings account). As recently as Jan. 1, 2007, these fund balances stood at nearly $1.54 billion, and at the beginning of the current fiscal year last Oct. 1, they stood at $902 million. For a year or two it might make sense to spend some money from these accounts — tough times happen — and we've benefited immeasurably from federal stimulus funds as well. But now we're going on spending down these balances for a third and fourth year. Hard decisions delayed, indeed. Our revenue streams have not turned around and are unlikely to do so for some time. In fact, I believe it will take a few years for a full recovery. As part of his budget the Mayor proposed a number of revenue increases, chiefly fees for various services, and the Council adopted a number of those as well as imposed a new tax to pay for a brand new program. And there certainly were any number of Members and advocates calling for even more taxes in a number of areas. But the fundamental problem with that approach is this — unless you restrain the growth of the government it will continue to grow by another $2-300 million a year in baseline measures and annual spending pressures. I have seen this nearly every year I have served in the Council. So the question then becomes — whose taxes do you raise the year after that, and then the year after that? What happens is you create a vicious cycle, much like that we had in the 80's and 90's, where you utterly discourage people from moving in to DC and you inspire current residents and businesses to flee. Over the past few decades the District lost hundreds of thousands of residents and the surrounding jurisdictions have shown that our region is indeed a desirable one. It's only in the past decade we've begun to turn that around — by lowering certain taxes, by attracting new residents, by improving city services, and by making DC an attractive place to live and work again. I refuse to be a part of turning our backs on that kind of progress and reversing the gains we have made. I refuse to be a part of playing "gotcha" with our residents and businesses and hiking up the cost of everything once people are here. We ought not to treat our residents and businesses as wallets simply to be picked at random. I advocate for the more challenging task of re-engineering our government to make efficiencies happen and deliver the same or greater services with the resources we already have.
-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 email@example.com. 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.
-As we’re suffering through Washington’s worst heat wave of the year, take a moment to check in with your elderly or ill neighbors who might need a little assistance. Weather like this can effect even the healthiest of us. This promises to be a long, entertaining summer in terms of Washington’s number one spectator sport, politics. With heated contests for mayor, council chair, two at-large seats and four ward council seats, there will be no shortage of candidate forums, neighborhood rallies and straw polls. The best thing that any Washingtonian can go do is get out there and participate. Attend a neighborhood forum and ask the candidates about what’s on your mind — from education to crime, from the economy and jobs to improving city services. I truly believe each of us has something to contribute to this important dialogue about the future of our city. So in addition to our new pitcher Stephen Strasburg heating up the mound at Nationals Park and the Washington Kastles gracing downtown with World Team Tennis this month, we have plenty in the sport of politics to look forward to! The responsibility of governance will return soon enough in the fall and we have many challenges ahead. We may even have to revisit the FY 2011 budget, due to declining revenue projections. It’s anyone’s guess, but looking at states and localities around the country, one can’t but watch and continue to wonder. Jurisdictions are trimming back, instituting employee reductions, mandating furlough days and retrenching some programs. Some states are even borrowing from pension funds to meet current expenses and issuing IOUs to taxpayers for tax refunds the states cannot afford to send. I am grateful D.C. has managed to do better than others, but I do have to chuckle a bit when I read these stories about other states — who’s calling for control boards for THESE folks? President Obama and some in Congress have been talking about additional stimulus spending, particularly to keep state employees and teachers on the job. While there are merits to this, it would also add to the federal deficit most likely, in itself another problem. Ultimately I think that may be a short term fix at best, which I’d rather avoid. We’ve managed to avoid a severe day of reckoning here in D.C. through a variety of means — some of which I don’t support — such as spending reserves and other one-time measures. Ultimately, given the unlikely return of the “irrational exuberance” in the boom economy of a few years ago, we will have to align the District’s budget to actual sources of revenue, which can be tweaked here and there, without the use of one-time gimmicks and fixes. In short, while our most recent revenue estimate is flat — which is good news in itself — we still have yet to address some of the fundamental, structural problems with matching the size of the government to our revenue sources. Finishing up, I want to take a brief moment to remember my staffer Desi Deschaine on the upcoming one-year anniversary of his death. We have truly missed Desi as part of our office and part of our lives, and I know those of you who were touched by him do as well. Here’s remembering you, Desi — you remain in our hearts and minds.
-I’m feeling a little more optimistic these days and wondering if we are turning a corner, at least in one respect, with regard to the economy. For the first time in the last couple of years, I can see how some development projects important to Ward 2 could move forward. The key in all instances has been this: access to capital is opening up and people are looking for places to invest. Fortunately, I think D.C. has rebuilt and maintained a good reputation over the past decade as a good place to invest. Not just because of the relative economic stability that comes with the presence of the federal government, but also that we, as citizens, have brought the city back to life. We are no longer the financial and physical wreck we once were a decade ago, and if I have anything to do with it, we will never, ever return to those days. That doesn’t mean there aren’t still challenges ahead, of course. I think the economy is warming up a bit, and what that means is investment capital is loosening and looking for a place to go. D.C. needs to be in the position to say, like a kid perhaps, “Pick me, pick me!” We are doing all we can to make this happen and having conversations about projects large and small across the city and ward. Of particular interest are the Market at O Street project in Shaw and the new Convention Center hotel on Ninth Street. Both of these projects, after several financial delays, appear to be back on track and moving. I particularly appreciate the hard work of Roadside Development in moving the O Street project forward. Imagine trying to finance a development that contains a new Giant grocery store, a hotel, condos, senior housing, an underground garage, and other retail. The financing for each of these components, in case you didn’t know, can be quite different. You can secure financing for the grocery store, but there was a serious downturn in financing hotels for quite some time. The complexity of the financing of this project cannot be underestimated, so I am especially glad we’ll see a groundbreaking in earnest in early September. Bravo! This truly is a lynchpin project in the heart of Shaw that I believe will help spur other positive investment. The new Convention Center hotel, likewise, is making headway after a period of stalling. The District stepped up to the plate to help provide bond financing for the project, but a dispute between JBG and Marriott on some other issues delayed moving forward on the matter. Like any number of other disputes, you just have to get the parties to keep talking, and I salute the work of Attorney General Peter Nickles in getting the two parties to settle so we can move forward on issuing the bonds, with groundbreaking commencing shortly thereafter. This project too will serve as a catalyst on the west side of the Convention Center and will help serve as an anchor to further investment along Ninth Street in Shaw. The District government, of course, has very little influence on the national economy, as one might expect. But, where we can make a difference is in two ways: by stepping up to the plate as needed and providing financial assistance to close gaps and move projects forward in tough economic times and by keeping our nose to the grindstone and not giving up on projects we know will be a success, such as these two. There have been many challenges standing in the way of both of these projects — political, economic, logistical, etc. — but I have found that if you keep focused, you will be prepared to move forward when things are looking up again. And at this juncture, I think things are looking up.
-It truly is the dog days of summer! Or, in the words of Nat King Cole, “roll out those lazy, hazy, crazy days of summer!” In this kind of heat and humidity the best thing you can do is do nothing, move as little as possible and have a cool, frosty drink nearby. Oddly enough, those recommendations notwithstanding, we’ve been doing quite a bit in the council office lately. First of all, we’ve continued work on the Georgetown Waterfront Park, and I am happy to announce we have received a commitment from Pepco for a donation of $50,000, which fills an important gap in moving the remaining parts of the project along. Logan Circle was busy this past weekend with the 11th annual “Dog Days” sidewalk sale events, with participation by both retailers and community groups. And just recently we helped the neighborhood secure funding from the District to help design a marketing plan for the 14th Street corridor. In Shaw, we celebrated the grand opening of the brand new Watha T. Daniel Library, a great community resource for the neighborhood and city. As you may recall, the previous library was a big heap of unattractive concrete, often compared to a prison or a wartime bunker, which was neither inviting nor very functional. I am very proud of the hard work of my staff, the D.C. Public Library, and community stakeholders in making the new library som In Shaw this past week, we celebrated the start of a $31 million rehabilitation of the Gibson Plaza Apartments, which will renovate the 271-unit affordable housing building with a variety of green building features, and will be funded by federal HUD funds. I am happy to report that not a single resident will be displaced by this renovation. Whew — after all that, I think we better slow down a bit! Actually, I love getting things done and it is gratifying that we’ve been able to move forward on a number of projects in the past week or two. Don’t forget the upcoming elections. One thing is for sure: it is going to be a very interesting month and a half.
-Our long hot summer will soon enough turn the bend of Labor Day and the September 14 primary which will select the Democratic nominee for Mayor, Council Chair and a number of races down the ballot. As many of you know, I have endorsed Mayor Adrian Fenty for reelection, but regardless of the election’s outcome, the city faces 5 key issues which the Mayor and the Council will have to confront after all the speeches are done and the buttons and signs are put away. We’ll talk about two of them today: 1. Schools. This continues to be one of the central issues facing the city, and historically has broken down like this: “rich” kids go to private or parochial schools and “poor” kids are stuck in run down schools with no future. Over the past 30 years the city has hemorrhaged middle class people, but good schools are key to retaining middle class families in the city and improving outcomes for low income kids. Mayor Fenty has made some pretty big changes, starting with authoring the Schools Facilities Modernization Financing Act as a Councilmember, and of course, as Mayor, implementing the takeover of the school system and installing Chancellor Michele Rhee as its head. As a result of the first legislation and a lot of hard work by Allen Lew and his facilities team, our school construction and maintenance efforts are the best they have been in a generation, by far. At some point credit is due to the Mayor for this. The other changes have been somewhat more controversial, but I believe Fenty and Rhee are on the right track by trying to bring more accountability into the system. My observation over the years has been this: for years we had a performance evaluation system where almost by magic no one was ever fired for lack of performance, but our schools were at the same time among the worst performing in the nation. Fenty has quite correctly identified this as fundamentally problematic and has sought to change old ways of doing business. 2. Fiscal responsibility. As Chair of the Council’s Committee on Finance and Revenue, you’ve seen me write about this topic often, and it continues to be a concern of mine. Fortunately, the District has the relative stability of the federal employment base, but in the FY 2011 budget cycle this spring, I expressed a number of concerns which all go back to this one notion: we can’t live beyond our means. For the last several years we’ve spent down revenue from our fund balances, which were once over $1.5 billion but which now are down to about $500 million. I believe the decline in our revenue — chiefly in the realm of commercial property — is not likely to return in the near term. A certain amount of our economy through the 2000’s was built on the shaky foundation of irrational exuberance. Yet the size of our government has not been restrained in proportion to the shrinking revenue. Using our fund balance the past three year has allowed us to paper over the problem, but I believe the next mayor and council won’t have this luxury — and I’ll note I was the only Member of the Council to vote against the budget this past year. Those are the two biggest issues we’ll face next year. Next column we’ll talk about three more. The author is a city councilmember representing District Ward 2.
-In my last column, I addressed two challenges (education reform and fiscal responsibility) which will face the next Council and Mayor. This election season we will elect a Mayor, Council Chair, two at large Members of the Council, and four Ward Councilmembers (Wards 1, 3, 5 and 6). The city faces five key issues which the Mayor and the Council will have to confront after all the speeches are done and the buttons and signs are put away – and these are my thoughts on the final three: 3. Creating an investment environment. Too many of our neighborhood commercial strips have languished over the past 40 years. Elected officials in town talk a lot about helping small businesses, but I’d point this out -- small businesses pay the same outlandishly high tax rates as big businesses! I believe this has greatly discouraged investment in our neighborhoods. Three years ago, the Chairman and I authored legislation which reduced the commercial property tax rate from $1.85 to $1.65 for the first $3 million of a building’s value, which was quite helpful in our neighborhood commercial areas. But even the $1.65 is far higher than the surrounding jurisdictions – we’ve priced ourselves right out of competition with our neighbors, all while we hemorrhage retail spending across our borders. The business income tax rate at 9.975% is among the highest in the country, and we tax unincorporated businesses which our neighbors do not. If we are really serious about changing the business climate in DC - often ranked among the nation’s worst -- we need to look long and hard at these rates if we are ever to bring more jobs and opportunities to our neighborhoods, and retain the spending power of DC residents right here in the city where it belongs. 4. Public Safety. We have made great strides over the past decade in implementing community policing, utilizing new technologies, and pinpointing resources at data-identified problem areas. We have much to celebrate -- the murder rate is the lowest in 40 years. But we have a ways to go on continuing to lower robberies and theft – and we face particular problems with juvenile crimes and dysfunctionality of the juvenile justice system. These are the next areas we will need to focus on. 5. Self-determination. This area is one in which there can be either incremental or large steps. I believe a two pronged strategy will be needed to obtain statehood for the District, and/or any of the steps along the way. We will need a Mayor and Council that has a good working relationship with the Congress. Statehood ultimately is but a majority vote in the Congress, but there are issues, particularly financial ones, to address along the road to statehood. Smaller steps could be such things as budget and legislative autonomy for the District. Budget autonomy in particular would allow us to conduct a more rational budget process every year rather than the “hurry up and wait” that we suffer now as we wait for the Congress to approve our spending of our own locally-raised funds. I believe we can achieve these things, but like many things, we’ll all have to wait until the dust settles after the election to get back to work on many of the pressing issues facing our city.
I wanted to provide an update on the iGaming proposal that is currently under consideration by the Council and the District?s Lottery Board. The Lottery Modernization Amendment Act of 2010, which was a part of the ?Fiscal Year 2011 Supplemental Budget Support Act of 2010,? authorizes the DC Lottery and Charitable Games Control Board to offer ?games of skill? and ?games of chance? via the Internet. Specifically, the proposal is to offer Internet games such as Texas Hold ?em Poker on computers in yet to be determined locations within the District. In response to concerns from community members last spring, I asked the Lottery to schedule a number of community meetings to receive input on iGaming before moving forward with enabling these games in any neighborhoods. I subsequently requested that the Lottery move to further accommodate community members by postponing meetings originally scheduled for August to more convenient times in October and November, and am pleased that they have done so. My hope was that this change in schedule would allow more residents to return from out of town summer trips and be engaged in the community meeting process. At this point, the Lottery has held at least 5 community meetings throughout the city ? meetings have been held in Wards 1, 4, 5, and 7, as well as an additional meeting held for Advisory Neighborhood Commissioners. Staff members from my office have attended all these meetings to record community feedback, and I am also expecting a more formal report from the Lottery on these meetings to be given to my Committee. Upcoming meetings are scheduled in Wards 3, 6, and 8, and most importantly, Ward 2. Our meeting is scheduled for Tuesday, November 15 at the MLK Memorial Library (901 G Street NW). If you have thoughts on iGaming, please come to the meeting to share your views in person, or you may share thoughts or questions by emailing firstname.lastname@example.org. For more information, you can contact my office or visit the Lottery?s iGaming website at http://goo.gl/xe8hh. Also, the Inspector General is conducting an investigation into the lottery and should have his findings available soon. After the conclusion of these community meetings, I intend to schedule a hearing to review the community input received and the Inspector General?s findings. I am reserving judgment at this point until all community feedback has been collected, so I look forward to hearing from you.
A subject that is unfortunately getting a lot of press these days is the alleged ethical failures of a number of the District?s elected leaders.? No fewer than ten bills have been introduced in recent weeks by members of the Council purporting to provide additional safeguards to campaign rules, use of constituent services funds, and other areas that could present possible conflicts of interest. On Oct. 26, I attended a hearing of the Committee on Government Operations chaired by Councilmember Muriel Bowser to address these issues and consider the various alternative bills proposed by our colleagues. During that hearing, I expressed my views on the subject. Lack of enforcement is the primary problem that I see -- we have a number of good laws already on the books, but without adequate enforcement, those rules do us no good.?I support enhanced disclosure requirements, more rigorous enforcement when violations are discovered, and more meaningful penalties assessed on violators. Current practice is to simply assess a $5,000 penalty a year after an election is already won, for example. Politicians can view a penalty that small as simply a cost of doing business, and it is invariably paid with campaign funds rather than out of an elected official?s own pocket. The Committee on Government Operations will hold an additional hearing on ethics reform on Nov. 30. Unlike the first hearing, the purpose of which was to discuss a number of general concepts, this hearing will be focused on feedback regarding a specific proposal that Councilmember Bowser released to the public on Nov. 18.?The heart of Councilmember Bowser?s approach will be to create an independent Board of Ethics and Government Accountability to enforce a more clearly defined Code of Conduct. The board would have the power to administer oaths and issue subpoenas. The board, as proposed, would also have access to adequate staffing, partially due to a suggested re-purposing of current District employees from agencies, such as the Office of the Attorney General and Office of the Inspector General. As I am continuing to study this bill and formulate my positions, I would encourage all my constituents also to read the bill (which can be viewed at http://goo.gl/5sFB8) and share their views.? You are welcome either to come to the hearing or to submit written testimony to put your thoughts on the record. I plan to remain very engaged in the ethics reform process and appreciate your thoughts. Let me end on this note ? while Thanksgiving is but one day of the year, I have to say I am truly thankful every day.? Thankful for my family and friends and thankful for my colleagues and staff.? Thankful to have the opportunity to make a difference every day in what I do.? So, don?t let the week go by without a little reflection and hopefully a nice meal with family and friends, too!?