A Little Home Rule Could Go a Long Way

April 1, 2010

District of Columbia officials have good reason to be wary of Congress. Over the years, it has violated the spirit, if not the letter, of our putative home rule. We’ve been forced to do things we didn’t choose to do and barred from doing things we chose to do with our own local revenues.

For example, we had to have a referendum on the death penalty because a senior Republican Senator decided we should reinstate it. For 10 years, we were barred from formally recognizing domestic partnerships and from providing health insurance for the partners of D.C. employees.

Only this year did we gain, at least for the time being, the ability to implement laws passed in 2002 that fund elective abortions for low-income women and needle exchange programs to help control our egregiously high rate of HIV/AIDS. Our just-gained freedom to permit medical uses of marijuana gives life to a referendum passed in 1998.

But none of these intrusions seems to have scarred the memories of our elected and appointed officials so much as the 1995 imposition of a control board to manage the District’s financial affairs.

Last year, during budget deliberations, several Councilmembers repeatedly raised the specter of another control board–this in defense of balancing the budget mainly by tightening our belts and without tapping the cash reserves in the rainy day fund.

Use of those reserves, said Council Chairman Vincent Gray, would not be “prudent …, especially given the stringent pay back requirements.”

The reference here is to an amendment to the Home Rule Act that was attached to our budget 10 years ago. This amendment requires a rainy day fund of a specific size, mandates repayment of any funds withdrawn within two years and prohibits their use for “shortfalls in projected reductions in proposed District budgets.” Yet another instance of Congressional over-oversight.

We also heard worries last year about negative reactions from the bond rating agencies. They reportedly wanted to see spending cuts in core areas like education and human services. And the Council took heed, with cuts in these areas totaling more than $90 million.

But that was then. And this is now. We’ve got a $500 million budget gap to close. And no one, I think, could credibly assert that it reflects financial mismanagement. What member of Congress could flog us when so many states are grappling with enormous budget gaps?

So I think the DC Fiscal Policy Institute is right to recommend that our leaders seek relief from the unique restrictions on the use of our rainy day fund. As it says, no state has to replenish its fund so quickly. Indeed, most can wait until economic conditions improve enough to give them the needed revenues.

All but one of the states that have used their rainy day funds have the same bond ratings as before. The exception here is Illinois, which, as you may recall, had some big-time corruption issues at the top. Yet Councilmember Jack Evans, Chairman of the Finance Committee, still warns of risks to the District’s ratings.

Last year, Mayor Fenty and Council Chairman Gray testified in support of two related federal bills (H.R. 960 and H.R. 1045) that would give the District autonomy over its local budget and other legislation. These bills aren’t going anywhere fast.

So how’s about going back to Congress with a modest proposal to let us use our rainy day fund when it’s raining and replenish it when the sun shines again. That in itself wouldn’t close our budget gap. But it could make a big difference.


New Report Details DC’s Affordable Housing Crisis

February 10, 2010

When we moved to Capitol Hill, our house was near the frontier of gentrification. Over the years, we’ve watched property values soar and small apartment buildings give way to condos.

The townhouse next door to us–described by a former owner as a nice place for one person or two people who get along very well–recently sold for more than half a million dollars. A sign on a nearby condo advertises units beginning at $400,000. Rental units are scarce, and most list at over $1,500 a month.

A new report by the DC Fiscal Policy Institute puts our experience in perspective. Using Census Bureau data from 2000-2007, it documents the growing affordable housing crisis throughout the District.

  • A loss of more than a third of the District’s low-cost rental units (units with rent and utility costs of $750 or less).
  • A 55% increase in the number of units costing more than $1,500.
  • A loss of 43,000 homes valued at $250,000 or less–from more than half of all owner-occupied homes to just one-sixth.

Of course, this change in the real estate market reflects changes in our local economy–increases in professional, business and health care services, IT and real estate development itself. These have produced a large increase in higher-income households.

But the shrinkage of affordable housing is putting stress on a growing number of people. More than 40% of all D.C. households have housing costs above the U.S. Department of Housing and Urban Development’s affordability standard, i.e., 30% of income. That’s 20,000 more households than in 2000.

Needless to say, households at the bottom of the income scale are faring worst.

  • More than 60% of those with incomes below 30% of the area median income* are paying more for housing than the HUD affordability standard.
  • Two-thirds of the households that pay more than they can afford have incomes below half the AMI.
  • Nearly 50,000 households pay more than half their income for housing. Of these, 85% have incomes below half the AMI.

The D.C. government provided substantial funding for affordable housing during the period covered by DCFPI’s report. Funding for three key programs–the Housing Production Trust Fund, the Local Rent Supplement Program and the DC Department of Housing and Community Development–increased, in current dollars, from $7 million in 2000 to $92 million in 2007.

Funding rose again in 2008–to $123 million. Then the impacts of the recession set in–a drastic drop in HPTF funds, which come from fees paid to record deeds and transfers, and cuts made to balance the District’s budget. DCFPI says that the current budget for core housing programs is just over half what it was in Fiscal Year 2008. This was before the Mayor’s recent spending cut order.

If we had an affordable housing crisis in the years covered by the report, imagine what it is now. Rents are still very high. And many more people are unemployed or struggling to make do with part-time jobs.

DCFPI suggests that the District try to maintain funding for some stalled affordable housing projects and for existing rent subsidies. This is a modest, politically savvy recommendation. I have a hard time believing the District couldn’t do better.

* The measure DCFPI uses here is the same measure HUD uses for housing vouchers and certain grant programs. HUD’s affordability standard depends on household size. In 2007, the AMI for a DC-area three-person household was $85,100.


New Report Aims To Improve DC TANF Program

November 12, 2009

The DC Fiscal Policy Institute and So Others Might Eat have just issued a pioneering report on the District’s TANF (Temporary Assistance for Needy Families) program. It’s a must-read for anyone who cares about how this crucial safety net program works–and doesn’t.

I say the report is pioneering for a couple of reasons. One is that it goes beyond the usual bounds of advocacy. Yes, it calls for more funding. But it also delves into administrative issues–ways the program could be improved through new procedures, changes in vendor contracts and the like. In the process, it also provides a terrific education on a very complex program.

The report also pioneers in methodology. The research involved focus groups with local TANF recipients and interviews with service providers who work with them. The effort here was not just to collect illustrative stories or quotes but to learn from those who know the program best.

Their perspectives confirm some things we already knew, e.g., that TANF benefits are woefully inadequate. They also shed new light on some serious systemic problems–reasons the program doesn’t, as it’s supposed to do, enable needy families to become self-sufficient.

A sample of key findings:

  • Five times as many DC TANF recipients receive only basic job readiness services as are placed in other available job training and education programs.
  • Only small fractions of recipients who face barriers to work, e.g., domestic violence, mental and physical health issues, receive the supportive services they need.
  • Recipients who find jobs (and not nearly all do) earn an average of $9.00 per hour–a full-time annual wage of just $18,720.
  • Only 45% of them are still employed after six months.

As the report shows, the Income Maintenance Administration, which administers the District’s TANF program, could do a lot to improve outcomes. The City Council could conduct more probing oversight. But the root of some of the problems is in the federal legislation.

TANF will be up for reauthorization in Fiscal Year 2010. The DCFPI/SOME report and other experience-based studies can provide useful guidelines for a much-needed overhaul.


Who Will Share In DC’s Economic Recovery?

September 27, 2009

The greater Washington area seems to be on the road to economic recovery. The Brookings Institution reports that it’s one of three metro areas whose economic input returned to its pre-recession level in the second quarter of 2009. And the Washington Business Journal reports that IHS Global Insight–an economic forecasting firm–predicts that the area will get back to its pre-recession job level in 2011.

This is good news. But we must remember the area’s history of unevenly shared prosperity. We were recently reminded of this when the Washington Post reported that the District’s unemployment rate surged to 11.1% in August, while Virginia’s fell to 6.5% and Maryland’s stabilized at 7.2%.

The Post noted that “some employment experts attributed the disparity to the higher proportion in the District of undereducated employees.” We’ve got large disparities within the District–and for the same reason.

In 2007, the DC Fiscal Policy Institute reported that the District’s decade-long economic boom had not been widely shared. This could be seen in the low employment levels among African-Americans and residents without postsecondary training and in dramatically growing disparities between high-wage and low-wage workers.

Recently-released census data show that these trends continue. As DCFPI reports, the overall median income for D.C. households rose in 2008, but households led by someone without a high school degree saw their incomes drop by nearly 20%. And while the inflation-adjusted median income for white households grew by 20% from 2000 to 2008, black households’ median income rose by just 2%.

Clearly, improving all levels of education and training must be a central element of efforts to bridge this economic divide. As a joint report by DCFPI and DC Appleseed says, D.C. has a “high-skill, knowledge-based economy,” with strong credentials required for even low-skill jobs.

Nobody would say that the Fenty administration isn’t trying to improve primary and secondary education. But adult education and training need attention too.

According to Census Bureau estimates, in 2007, approximately 51% of D.C. residents 25 years or older had attained less than an associate’s degree. And a 2007 Brookings report estimated that between 51,000 and 61,000 low-income working-age residents were in need of workforce development services to compete in the District’s high-skill labor market.

The Great Recession has almost certainly increased the need for such services. Of course, it’s also reduced tax revenues, thus hampering the District government’s ability to fund them.

But there’s some heartening news. The District has received $10.7 million in workforce development funds from the economic stimulus package. It plans to use the money to train residents for jobs in growth industries, i.e., emerging “green” industries, health care and hospitality. In fact, many who receive “green” training may get work immediately on the $8.1 million weatherization initiative that ARRA has funded.

And despite budget challenges, D.C. policymakers have thus far kept $4.6 million of locally-funded adult job training in the Fiscal Year 2010 budget.

If you believe that adult job training should be a top priority, you have a chance to weigh in by testifying at the public oversight roundtable that the Committee on Housing and Workforce Development will hold on Thursday, October 1.

The roundtable will start at 11:00 a.m. in Room 412 of the John A. Wilson Building (1350 Pennsylvania Avenue, NW). You can also submit testimony for the record. For either option, you’ll need to contact Drew Hubbard at 202-727-8230 or dhubbard@dccouncil.us.

This recession has taught us that we’re all affected by one another’s economic fortunes. Let’s each do our part to ensure that we learn from past mistakes and climb out of this economic morass together.

UPDATE:  The Committee on Housing and Workforce Development roundtable has been postponed. No new date has as yet been announced.


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