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With details still scarce, Mayor Adrian M. Fenty‘s budget proposal holds sacred education and public safety, while finding sundry service cuts and fee hikes to close an approximately $550 million budget gap.
The budget proposal eliminates 385 full-time equivalent positions; a Fenty official estimated than one-half of those positions are already empty, the other half will be laid off. The proposal also seeks to freeze automatic “step” increases in government worker salaries, saving $20 million. All told, general spending is falling 1.2 percent against the current fiscal year.
The big news is what is increasing: Fenty is proposing actually hiking funds for D.C. Public Schools and charter schools by as much as $140 million. The per-student funding formula would increase by $175, to $8,945. Fenty is also proposing a modest increase, 4 percent, for the Fire and Emergency Services Department.
What Fenty isn’t proposing: No additional money for Metro, to help offset proposed service cuts. And no local money for vouchers, making up for the federal money lost after Congress refused to reauthorize the program.
How to pay for it all? Fenty, in keeping with a 2006 campaign pledge, is not proposing any hikes to the “Big Three” revenue generators: sales, income, and property taxes. But, as has become habit, there is a passel of new fees in the Fenty budget: $28 million in increased traffic fines; $7 million in 911 fees (see below); $150,000 in increased notary registration fees; $3.6 million by hiking parking meter rates from $.75 per hour to $1 per hour; $3.1 million from a “fee for steel plates on roadways”; $920,000 from additional fees for business licenses and public space permits; and $16.1 million in other fee hikes.
There are other cuts, too: Changing hazardous-waste dropoffs from weekly to monthly; eliminating the police department’s pager contract; and merging the Office of Employee Appeals, Public Employees Review Board, and the Office of Administrative Hearings into a single shop, saving $1.9 million. But there are still no details on core human services functions—-health care, homeless services, poverty relief, and other programs that are very costly and are expected to bear heavy cuts. A group of activists, from Save Our Safety Net, briefly interrupted Fenty’s press conference this morning to protest the anticipated cuts.
Some big fights to come:
The Enhanced 911 fee, aka E911. Fenty has proposed this fee every year in office, which would add a tax to phone bills raising, an estimated $7 million in FY2011. And every year he’s proposed it, At-Large Councilmember Phil Mendelson has cut the fee from the budget. This year, there’s a twist: Fenty wants to take the fee and use it not for enhancing 911, according to a CFO analysis, but to pay salaries and benefits for 30 employees. That would require a change to current law—-a tough slog for sure.
A tax on hospitals. Fenty is proposing to raise $25 million by levying a “new assessment on net patient revenue” at city hospitals. Standing in front of the John A. Wilson Building today was Robert Malson of the D.C. Hospital Association, a powerful lobby group. “The hospitals are pleased to do their part, but everything has to be on the table” in terms of spending cuts, he says. “We can’t afford a one-percent tax on inpatient and outpatient revenues.”
Office of the Tenant Advocate. The city’s voice for renters is losing $496,000 in funding, according to the CFO’s office. City Administrator Neil Albert pledged today that the office would continue to exist under the Fenty budget, and that it would continue to serve the same role it does in the current fiscal year. But details are quite sketchy indeed, and any attempts to cut its budget will lead to jawing from council progressives.
Fund balance. The Fenty plans spends down the city’s savings account by $97 million; Gandhi testified earlier this year that the city was approaching the limit of how much it needs to keep in reserve in order to meet its cash needs and statutory obligations. Gandhi, while certifying the request, warns in a letter that officials should “take steps to augment, or at a minimum, replenish the General Fund Balance.” Fiscal hawks like Jack Evans and probably Vincent Gray are likely to make it an issue. A related issue: $97 million in “debt restructuring” that saves the city money in the short term but increases interest costs down the road.
Summer jobs. Last year, Fenty proposed a 10-week Summer Youth Employment Program, a costly mayoral pet initiative. However, the council, in order to cover a late-breaking revenue shortfall, saw fit to reduce the program to just six weeks this year. In 2011, Fenty is again proposing a 10-week program, but says he can do it for only $22.7 million. (A 10-week program in 2008 cost well over $40 million.) Fenty budget aide Merav Bushlin told councilmembers that program spending “depends on how the program is structured.”
Photo by Darrow Montgomery