DC Should Spend Some of BIG Surplus on Urgent Safety Net Needs

January 28, 2013

Tomorrow, the District’s Chief Financial Officer reportedly plans to release the results of the Fiscal Year 2012 audit. As the DC Fiscal Policy Institute reports, it will show a surplus of at least $140 million — maybe as much as $400 million.

Under current law, the entire surplus, no matter how large, must go into the fund balance — essentially, a savings account.

The DC Council passed the law in 2010, after several years of tapping reserves to make up for revenue drops during the recession.

The law might have made sense then, though I personally feel that such hand-tying measures are a poor substitute for responsible policymaking.

Sweeping the whole surplus into savings certainly doesn’t make sense now, when the Council has identified priorities to fund if the CFO projected higher revenues within the first three quarters of the year.

That he didn’t reflects his very conservative approach to ensuring budgets remain balanced — clearly seen in his accounts of potential impacts on the national economy.

He did nevertheless project a surplus close to $140 million at the end of the fiscal year.

As I said at the time, the Mayor could have asked the Council to pass a bill that would have freed up some of the surplus for items on the contingency revenue “wish list.”

The Fair Budget Coalition and grassroots supporters urged him to do this — and the Council to approve the request.

Nada. So as things stand now:

  • Families who’ve participated in the District’s Temporary Assistance for Needy Families program for a lifetime total of more than 60 months will lose a portion of their meager cash benefits. For about 6,100, this will be a second cut.
  • At the same time, the TANF program won’t have as much as it needs for job training, counseling and other services that could help some of these families “graduate” from welfare to work.
  • The Department of Human Services could face a shortfall of at least $7 million for homeless services. And even if it got that, it will again start denying shelter to homeless families when the winter season officially ends — unless it gets more than is needed to plug the identified budget gap.
  • Meanwhile, the Housing Production Trust Fund — the main source of local budget support for affordable housing construction and preservation — will remain shy $20 million. So there’ll be minimal new funding for long-term housing solutions to homelessness.
  • And as if this weren’t enough, I’m told that homeless youth could have an even harder time getting shelter and services when they need them, due to recent agency contract changes.

The Mayor and Council could meet all these needs and still have a stash to add to the burgeoning fund balance — already $1.1 billion by the end of 2011.

All that’s needed is a reset of what seem to be some skewed priorities — or perhaps a thoughtless adherence to a commitment made when the District’s financial affairs were quite different.

Or perhaps only a preoccupation with other things, e.g., how Councilmembers would be accommodated during the inauguration.

Whatever explains the inaction thus far, another surge of grassroots pressure could persuade our decision-makers to do the right thing.

The Fair Budget Coalition has an editable letter we can send them.

UPDATE: The CFO reported a surplus of $417 million. The Mayor intends to bank it all, increasing reserves to $1.5 billion. He’s indicated that he might see his way clear to making some investments in social programs (unnamed) if revenue projections for the current fiscal year are revised upward.


Homelessness, Child Poverty Not Emergencies, DC Mayor and Council Decide

November 5, 2012

Last Thursday, the DC Council hastily approved emergency legislation* Mayor Gray had requested to spend $23 million left over from last fiscal year.

As the DC Fiscal Policy Institute reports, the funds went to the District’s charter and regular public schools, the Metro system, parks and recreation and the detention facility for youth who’ve gotten in trouble with the law.

At least some of the money may have been needed to cover agency budget overruns. These are prohibited by the Anti-Deficiency Act.

But it’s hard to see how technology upgrades for the public schools would qualify as an emergency. What we see here rather is a clear display of the Mayor’s priorities — and perhaps the Council majority’s as well.

The Fair Budget Coalition and allies had earlier asked the Mayor to propose a bill that would allocate some of the projected $140 million revenue surplus — another pot of found money — to three top priorities he and the Council had already agreed on.

These priorities would have served pressing needs of the District’s homeless residents and its families (many of them homeless) in the Temporary Assistance for Needy Families program.

They would also have restored some of the funds diverted from the Housing Production Trust  Fund, thus supporting efforts to address the acute shortage of affordable housing here.

Not only homeless families, but some of the 36,000 District households who are paying half or more of their income for rent would have been better off.

The FBC requests were carefully framed to be one-time spending because laws governing the District’s budget prohibit measures that could create deficits in future years.

The proposals the Council just approved instead were also for one-time funding.

So the Mayor clearly could have decided that it was more urgent to mend the safety net and/or shore up the Trust Fund than to give nearly $7 million more to the public school system, plus an equal amount to the charter schools — the latter nominally for facilities, but actually for whatever they want.

Or, as DCFPI suggested, the Council could have postponed final decisions on how best to spend as much of the new-found money as wasn’t needed to cover overruns.

Some Councilmembers reportedly were fussed that the Mayor waited until the eleventh hour to give them a plan for the extra $23 million. But only two fussed enough to dig in their heels.

Set aside what seems to be deliberate manipulation — “a gun to our head,” in Councilmember Catania’s words.

I’d have thought that Councilmembers would have had enough concern for the priorities they’d already identified to balk at a bill that totally ignored them.

Shouldn’t they, at the very least, have wanted to make sure that the emergency shelter and other services triggered by Hurricane Sandy didn’t leave the Department of Human Services even shorter on funds than it’s likely to be?

I know this sounds as if I don’t care about the quality of public education D.C. children receive. In fact, I care a lot.

I do think, however, that the Mayor and Council might have considered that homelessness puts children at high risk for academic failure — no matter how nifty a “learning environment” their schools provide.

Living in a home where there’s not enough money to keep the heat and lights on doesn’t help kids get a quality education either.

Nor shoes that pinch because a new pair isn’t affordable. Nor the stress of worrying whether your belongings will be all piled on the sidewalk when you get home.

All more likely for the nearly 14,000 children in families who’ll soon lose a hefty portion of their very low cash benefits from the District’s Temporary Assistance for Needy Families program.

DCFPI thanks the Mayor and Council for putting $11 million more into the TANF program.

But these are funds the Mayor had promised over two months ago. And they’ll delay the scheduled benefits cuts only until April.

Some 6,100 families will face dire emergencies then — as may hundreds of homeless men and women who could be out on the streets because DHS doesn’t have enough money to shelter them.

Not enough money to shelter newly homeless families either, though the benefits cuts will presumably create more of them.

All emergencies worth some of that $23 million, I think.

* The Council designates bills as emergency legislation to bypass requirements that ordinarily require two votes at successive meetings, plus 30 days for Congressional review (and potential disapproval).


How to Change Mayor Gray’s Plans for DC’s $140 Million Surplus

October 15, 2012

As I wrote a couple of weeks ago, the Chief Financial Officer for the District of Columbia expects that revenues for the just-ended fiscal year will be about $140 million higher than he earlier projected.

Mayor Gray has said that the whole $140 million should go into a reserve account. That’s what the law requires, but perhaps only if he sits on his hands.

As things stand now, he may because he’s put a top priority on building up savings — already totaling $1.1 billion — so that the District’s got a big stash it could use for some future emergency.

We’ve got emergencies staring us in the face. And if the CFO had projected the surplus earlier, the extra funds would have been used to address those that the Mayor and DC Council agreed were most urgent.

That’s also the law — specifically, the Fiscal Year 2013 Budget Support Act, which includes a list of programs that would get more funding (and the amounts they’d get) if revenue projections before the tail end of the fiscal year indicated that the needed revenues were available.

Top of the list is $7 million to make up for federal funds that the District had used for homeless services, but didn’t expect to have in this new fiscal year.

Next on the list are funds for the Temporary Assistance for Needy Families program.

Some would provide more money for job training, counseling and other services participating parents need. Another portion would delay until next October the cuts in benefits for families who’ve been in the program for more than five years.

These families surely ought to have a chance to benefit from the improved training, counseling, etc. before they’re penalized for not finding work that pays enough to lift them above the TANF income eligibility ceiling.

Also near the top of the list are funds to partly restore those that the Mayor, with the Council’s approval, shifted out of the Housing Production Trust Fund — the main source of local funding for creating and preserving affordable housing here.

So the (relative) well-being of thousands of District residents hinges on a legal technicality. The Mayor could easily resolve it by asking the Council for a one-time, partial exception to the use of end-of-year surplus revenues.

Or the Mayor and Council might find funds for the top-of-list priorities elsewhere. Councilmember Jim Graham, after all, found $14 million in unspent child welfare funds. The audits that are always done at the end of a fiscal year may well turn up more unspent funds.

The source doesn’t matter. A firm commitment to fund these priorities does — and a commitment not to have funding for basic human needs like shelter, housing and cash for kids’ clothes on some extra revenue “wish list” in the future.

Or, for that matter, adequate funding for other anti-poverty programs like relevant job training and supportive services, e.g., affordable, high-quality child care, mental health counseling.

Which is why we need to exert some grassroots pressure on the Mayor and Council.

The Fair Budget Coalition has an editable e-mail we can send to let them know that we want some portion of the surplus spent on the top priorities — and longer-term commitments that ensure we don’t keep having these preventable emergencies.

As I remarked before, the Mayor and Council could fund the priorities and still have plenty of surplus revenues to put in the bank. Their choice, but we can help them make it.


DC Mayor Plans to Bank Fund Surplus, Leave Poor Families in Crisis

October 1, 2012

Last Thursday, the Chief Financial Officer for the District of Columbia announced an estimated $140 million revenue surplus for Fiscal Year 2012. The fiscal year ended yesterday.

So the Gray administration has considerably more money than it thought it had when it said it could postpone the scheduled cuts in benefits for families in the Temporary Assistance for Needy Families program for only six months, rather than the full year the DC Council wanted but couldn’t find the funds for.

And that it couldn’t, as the Council also wanted, afford to temporarily stop the time-limit clock for parents who shouldn’t be expected to meet standard work requirements, e.g., because they’re suffering from domestic violence trauma or have a disabled child to care for.

The Gray administration also presumably has money it didn’t know about when it said it could do nothing for homeless families who are sleeping in bus stations, abandoned buildings and the like.

This doesn’t mean it hasn’t had the money to help them, however. Councilmember Jim Graham announced two weeks ago that he had identified $14 million in unspent funds that could be used to shelter and/or house those families.

No perceptible response from the Gray administration. It chose instead to leave a growing number of shelter units vacant — now in excess of even the large number set aside as backup in the plan for the upcoming winter season.

And it’s used its clout to keep the DC Housing Authority from issuing locally-funded housing vouchers too, though it’s expressed an unarguable preference for affordable housing over shelter.

The CFO rightly expresses concerns about the potential impact of the impending across-the-board cuts in federal spending and other potential threats to the local economy. So it would seem prudent to hold a good portion of the revenue surplus in reserve.

But the Gray administration could do that and also, as the Washington Legal Clinic for the Homeless recommends, put enough into a separate spending account to address the immediate and foreseeable crises for TANF families and homeless residents.

The DC Fiscal Policy Institute tells us that $5.8 million would cover the costs of a further six-month delay in TANF benefits cuts and the exemptions the Council passed, but left unfunded — unless a rosier revenue forecast indicates there’s money for them in the new budget year.

The Gray administration itself identified a $7 million shortfall for homeless services. The gap-closing funds are at the top of the Council’s list of uses for those hoped-for extra revenues.

The Department of Human Services has said that, without them, it will have to cut shelter capacity for individual men and women in half next April, when the winter season officially ends.

Also eliminate some critical services, including transportation to shelters, job training for occupants and mid-day meals for families at DC General — the main local shelter for them.

What DHS hasn’t said is that it would almost certainly retain its new policy of denying shelter to homeless families, except during the official winter season — even families who have no safe place to stay.

So, in my view, the Gray administration should put into the temporary account more than the projected $7 million shortfall — especially because we’ve got good reasons to believe that DHS won’t be able to carry out its plan for housing homeless families this winter.

Say it put twice as much into the account for homeless services, plus the funding needed to keep well over 6,000 TANF families from utter destitution.

It would still have some $120 million to shore up the budget if the across-the-board cuts — or others Congress substitutes — depress revenues and/or put further stress on safety net programs.

Shortly after Councilmember Graham came up with the $14 million for homeless families, Professor Matt Fraidin observed that the Gray administration was “fumbling an easy” policy choice by refusing to do anything — except perhaps take the children away from their parents.

The CFO’s surplus projection gives the administration a chance to do a reset — though not to undo the damage to homeless children it’s already caused.

The Mayor has reportedly decided to take a pass. Both he and Council Chairman Phil Mendelson say that every penny of the surplus will stay in the bank.

This is what the Council decided would be done with end-of-year surpluses when Gray was Chairman. But, hey, laws get amended all the time.

Gray himself is urging Congress to change or replace the law that’s triggering the across-the-board cuts. Calls the process “completely unacceptable and destructive.”

So, to my mind, is letting his poorest One City constituents suffer when he’s got more than enough new-found funds to avert crises that his budget choices created to begin with.


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