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?

DC Council Blocks Benefit Cutoffs For TANF Families

August 4, 2009

The City Council took its next-to-final action on the District’s Fiscal Year 2010 budget last Friday. It went along with a lot, though not all, of what Mayor Fenty had proposed. But it choked on his proposal to impose harsher sanctions on families in the TANF (Temporary Assistance for Needy Families) program. And a good thing too.

As I’ve written before, the Mayor’s proposed budget included plans to reduce TANF benefits by 50% when the adult recipient had been subject to lesser sanctions and still wasn’t meeting the program’s work requirements. If the adult still didn’t comply, all benefits to the family would have been cut off–even the funds to support the children.

The City Council struck these proposals from the legislation. However, this doesn’t mean that the Income Maintenance Administration, which administers the District’s TANF program, has no tools to encourage compliance.

It’s perfectly free to enforce its existing progressive sanctions rules. These allow the agency to reduce benefits so that they cover only the children in the family and for successively longer periods each time the adult fails to comply with the work requirements. If the money’s there, IMA can provide the proposed bonuses for full compliance too.

Unfortunately, the Council left intact the Mayor’s proposals to make eligibility for TANF contingent on an applicant’s completing an orientation and an assessment.

Some states have used requirements like these to discourage enrollment. That could happen here too. Recall that federal rules give states incentives to reduce their caseloads. At the very least, the requirements could delay delivery of urgently-needed help.

The City Council will take a final vote on the budget legislation in September. It would be well-advised to strike the new eligibility requirements. Let IMA first show that it can ensure all TANF applicants timely, appropriate orientation sessions and timely assessments that accurately identify “skills, prior work experience, employability, and barriers to employment.”

Then IMA should explain why eligibility should hinge on anything more than the criteria it’s been using. What does it hope to gain from creating more hoops for poor people to jump through before they’re even admitted to the program?

DC Summer Youth Employment Program In Trouble Again

June 21, 2009

Last year, the District’s Summer Youth Employment Program turned into a scandal. A cost overrun of about $40.5 million over the original budget. At least 3,000 people receiving paychecks who were ineligible to participate, had been fired or never shown up in the first place. And that’s only part of it.

As Mayor Fenty acknowledged, the program hadn’t been “managed or administered the way the residents of the District of Columbia expect.” (Classic understatement!) As he didn’t acknowledge, program staff were overwhelmed because he decided to eliminate both the registration deadline and the cap on enrollment.

For this summer’s program, the City Council appropriated $23 million and specified an enrollment of no more than 21,000 youth. The Mayor apparently didn’t take this seriously. On May 1, he triumphantly¬† announced that nearly 24,000 youth had registered. The budget apparently wouldn’t have covered even the mandated maximum because program costs are now estimated at $45 million.

So the Mayor wants permission to tap the National Stadium Community Fund. As the DC Fiscal Policy Institute says, the fund was intended to cover important unmet community needs, not over-extended programs.

The Mayor says that the SYEP qualifies because young people have to be breadwinners in these tough times. Long-time children’s advocate Susie Cambria has a sharp response to this.

A majority of the City Council voted instead to cut the program from ten weeks to six–the length it was before the Mayor extended it. However, more than a majority (nine votes) was required to make the change immediately effective.

So here we are at the beginning of summer with many more young people expecting to work than there’s money to pay for.

This is more than a symptom of the tensions between the Mayor and the City Council. And more than a question of how to manage a cost overrun in this tough budget year.

Experts doubt that the SYEP can ensure a successful experience for anything like the number enrolled. In a posting on the Mayor’s proposed budget, Martha Ross of the Brookings Institution estimated the maximum at fewer than 15,000.

Ross and several other experts have joined in an open letter to the City Council that puts the issue in a nutshell: “The goal of providing income and something to do during the summer months for as many youth as possible appears to have supplanted the goal of developing a meaningful, high-quality youth employment program.”

They recommend that the District operate this year’s program within budget and run a smaller, perhaps shorter program in 2010 so that the Department of Employment Services can focus on changes that will provide participants with meaningful preparation for the world of work.

They also recommend enhancements to the city’s year-round workforce development program, with a focus on “disconnected youth,” i.e., young people who are out of school and out of work. Funds for this would be available if, as Ross urges, the District¬† focused its youth employment efforts on quality, not quantity.

What’s so troubling about this is that it’s all old news–the issues, the recommendations, the commitments to improvements. And meanwhile young people, especially those from low-income families, are being shortchanged by a program we’re being asked to throw more money at.

DC Councilmembers Propose Tax Giveaways

June 10, 2009

The DC Fiscal Policy Institute has been blogging on proposed tax breaks for select commercial interests.

First came a posting on proposed tax abatements for six new projects. These include a luxury hotel in Foggy Bottom and two developments at Metro stations–all prime real estate and potentially very profitable. DCFPI estimates lost revenues at $3.3 million in FY 2010 and $13.7 million through FY 2013.

Now comes a posting on a bill to substitute a modest lump sum payment for the taxes the Union Station retail center pays. This one gives away an estimated $2.45 million a year.

I’m simply appalled. Here’s a City Council that:

  • Just congratulated itself for closing an $800 million budget gap while modestly increasing funding for a handful of programs that serve low-income people.
  • But couldn’t find enough funds for TANF benefits to even keep them level with inflation.
  • Couldn’t find enough funds for the Local Rent Supplement Program to support the development of more than 180 affordable housing units.
  • Virtually ignored the dire straits of the Housing Production Trust Fund–another key source of funding for affordable housing construction and renovation.
  • Is well aware that the upcoming revised revenue forecast may reveal a new budget gap.

And yet some Councilmembers are proposing bills that would reduce District revenues. If they really think we’ve got money to spare, then why not use it to shore up programs that help our most vulnerable families meet basic needs?

Doing that would make the city a better place for all of us. Tax breaks for retailers at Union State won’t.