Mayor Muriel Bowser
Mayor Muriel Bowser was forced to confront a budget shuffle in the wake of a key error in the CFO's office.

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Think you just had a bad day at your job? Try making a mistake with $392 million on the line.

That’s the unenviable position Acting Chief Financial Officer Fitzroy Lee landed in a few days ago. And the fallout of this revenue snafu caused a bit of confusion just ahead of Mayor Muriel Bowser’s big budget rollout Wednesday.

Word first spread around the Wilson Building that something might be amiss Tuesday, when Council Chairman Phil Mendelson revealed during a brief meeting that the full budget wouldn’t be ready by the legislatively imposed deadline of March 16. Bowser had the details she needed to still put on a big show Wednesday and deliver high-level details about her 2023 spending plan (as well as her capital improvement plan, covering big construction projects), but the nitty gritty details of each agency’s budget will remain under wraps until Friday.

That inspired a round of grumbling from councilmembers eager to start dissecting Bowser’s proposal for fiscal year 2023, and some casting about for someone to blame. Advocates watching the budget soon began hearing word that there was some sort of problem calculating the fiscal year 2021 surplus revenue that the city had to work with, so Lee’s office became a target—one of the CFO’s main responsibilities involves tracking whether District revenues met or exceeded projections each year.

Bowser confirmed that theory was at least partially on target during her budget presentation Wednesday. She acknowledged there had been an “error” that the CFO discovered at the end of last week that wasn’t fully fixed until Monday. Instead of pulling in $576 million in revenue above initial projections in FY 2021 (the figure Lee’s office announced at the end of last year) the city actually had an extra $184 million to work with, per Bowser’s budget director, Jenny Reed.

“That caused us to have to make some changes to our complete budget,” Bowser told reporters Wednesday, acknowledging it contributed to some of the delay.

“The CFO is responsible for revenue estimates, not me,” she added. “I wish we were responsible for revenue estimates.”

Of course, Lee is Bowser’s appointee—she picked him to fill out the remainder of Jeffrey DeWitt’s term after he took off for a university job last February—so it feels a bit odd to see the mayor throwing one of her underlings squarely under the bus. Then again, a missing $392 million discovered right before the start of budget season (in an election year, no less) is a bit of a unique situation. If anything, the CFO normally underestimates how much extra revenue the city will have each year, making big surpluses a regular part of the budget process in recent years.

David Umansky, a spokesman for the CFO’s office, explains that this was indeed a “mistake,” but one that should ultimately have “no real impact” on the broader budget. The $392 million didn’t vanish into thin air. It was simply misplaced in the CFO’s budget tables.

When the CFO’s number crunchers were examining city revenues and determining what money counted as a surplus and what was already spoken for, Umansky says they mistakenly believed there was more unbudgeted cash than they should’ve. The mayor and Council had a long list of priorities that needed funding in the fiscal year 2022 budget, and that $392 million was supposed to be sent to those initiatives instead, Umansky says. The budget was set before the revenue came into city coffers, so it got a bit lost.

Umansky says they explained all this to the mayor’s office and got the money allocated to the proper places. That left the $184 million of the true surplus, which D.C. law requires be split between the city’s main affordable housing loan fund (the Housing Production Trust Fund) and a fund for capital projects (generally, that’s construction of some kind).

This can all sound like inside baseball (and to a large extent, it is) but the shuffle comes with big implications. Bowser has made no secret that she wanted to pitch a huge increase to the HPTF, given her recent focus on affordable housing, and some extra surplus money in the budget would’ve helped on that front. She still proposed a $500 million infusion into the fund to back affordable projects (the single largest one-year investment in the fund’s history) but Loose Lips guesses she had to move money around from other projects with less surplus to play with.

And then there’s all the priorities progressive advocates were urging Bowser to include in the budget using the surplus money. Many of them were echoed in a resolution backed by At-Large Councilmember Elissa Silverman. Rent relief and eviction prevention were a particular focus. The Fair Budget Coalition suggested spending at least $187 million in surplus money to help renters in 2022.

There’s nothing to say Bowser would’ve listened to those suggestions (in fact, she frequently doesn’t), but the limited surplus money also surely foreclosed some of her ability to hand out budget wins for various constituencies as she prepares to face voters in June.

On rent relief alone, Bowser hopes to spend $60 million in both 2022 and 2023 for the city’s Emergency Rental Assistance program: Not quite $187 million, is it?