DC Council Overreacts To Lower Fund Balance

June 11, 2010

A new posting on the DC Fiscal Policy Institute blog shows that I didn’t altogether understand how the DC Council would handle concerns about the fund balance when I ranted about its real or contrived control board fears.

I assumed it would wait to start rebuilding the “savings account” until the economy improved. Turns out it won’t do anything so sensible. Instead, it’s put highly-restrictive proposals for two reserve funds into the Fiscal Year 2011 budget legislation.

One would get all uncommitted end-of-year funds until it reached 9% of the budget. These funds couldn’t be tapped for fiscal emergencies. That, says DCFPI, would put about $530 million off the table–three times as much as the District’s ever had in cash reserves.

The second reserve fund could be used for fiscal emergencies or other unexpected spending pressures. But it wouldn’t start getting funds until the other reserve had reached the required level. The maximum in this account would be about $120 million.

In short, the Council has decided to tie its own hands. Come any shortfall, no matter how temporary, it will, for the indefinite future, have no choice but to engage in another round of program cuts and/or enact new revenue raisers. If past is prologue, we know which option it will prefer.

DCFPI has issued a report that explains all this in more detail and offers recommendations for a more rational approach.


DC Mayor Discounts Limits On Summer Youth Employment Program

September 10, 2009

When is a budget not a budget? Apparently, when Mayor Fenty doesn’t like it. Yesterday’s Washington Post reports that this year’s Summer Youth Employment Program wound up costing $41 million–considerably more than the City Council originally approved.

The SYEP appropriation for next year is $20 million–for a program limited to six weeks and a maximum of 21,000 participants. But the Mayor reportedly said he’s determined to find a way around the caps.

Set aside the question of whether the SYEP should be expanded or rather refocused on quality instead of quantity, as experts have recommended. Last time I checked, programs were supposed to operate within their approved budgets. If a chief executive wanted more money, he was supposed to go back to the legislature and ask for it.

And last time I checked, the Council had made deep cuts in crucial safety net programs to balance the city’s budget. It might well have to close yet another budget gap. This seems hardly the time for ignoring any expenditure cap–let alone one designed to ensure that D.C. youth have a properly supervised, skill-building work experience.


Earmarks Not Gone After All

August 27, 2009

Susie Cambria, the expert whose blog keeps us clued in on what’s happening with the District’s budget and policy processes, tells me that some earmarks that were in the original Fiscal Year 2010 budget aren’t really gone. They’ve just gone underground.

True, they’re not clearly identified in the revised Budget Support Act. And true, Council Chairman Vincent Gray stated that Council actions to address the projected shortfall included “elimination of one-time designated grants [earmarks] for FY 10.”

But the Council and the Mayor have agreed that certain agencies have agreed that certain agencies will provide grants of specified amounts to organizations that were formerly to receive funding as earmarks. The big difference is that only a plugged-in expert like Susie knows how to recognize them for what they really are.

I complained before about a lack of transparency in the budget. But this really takes the cake!


After Earmarks

August 26, 2009

Most people, I think, agree that earmarks are bad public policy. Legislators allocate millions of our taxpayer dollars to whatever organizations or projects they like–mostly those in the communities they represent.

These earmarks aren’t subject to public hearings. And fellow legislators don’t question them. It’s an unspoken compact: If I don’t question your earmarks, then you won’t question mine. We’ll all benefit come re-elections time.

Here in the District, we had a fine flap over some of Councilmember Marion Barry’s earmarks. In the wake of this, the City Council decided to eliminate all earmarks from the Fiscal Year 2010 budget. A quick, easy to way to save more than $22 million and avoid further embarrassments at the same time.

So now more than 130 organizations–social service providers, health education programs and clinics, youth groups, cultural programs, environmental projects, economic development, neighborhood improvement, job training and education programs, child advocacy services and more–are without funds they counted on.

Council Chairman Vincent Gray was undoubtedly right. Better wipe out all earmarks than try to pick and choose among them. To see why, take a look at Title VIII in the original Budget Support Act.

But where do we go from here? The District’s safety net consists largely of nonprofit organizations that combine private donations with public funds to deliver essential services to its poorest residents. These organizations can’t simply absorb lost earmarks.

The Fiscal Year 2010 budget is all but a done deal. But the Fiscal Year 2011 budget cycle is about to begin. Perhaps the Mayor and the City Council should agree on a no-earmarks policy and institute a better alternative.

In many areas, they already identify critical needs, appropriate funds for them and then award the funds based on a competitive grants process. Why not take a hard look at services formerly supported in part by earmarks and establish competitive grants for the the most critical of these too?


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