Who’s Afraid of the Big, Bad Control Board?

Washington Post columnist Colbert King has a list of questions for mayoral and DC Council candidates. These are prompted by the fact that the new budget will tap the District’s reserve funds–something he strongly disapproves of.

He would like us to ask, among other things, “There has been talk about the control board coming back…. What are you doing or what will you do to prevent that from happening?”

Frankly, I’m getting sick and tired of having the specter of another control board raised–usually to justify more radical spending cuts.

The most charitable explanation is that, for District officials and apparently King, the control board was a traumatic experience.

We know that children who suffer acute deprivation, abuse or instability will sometimes grow up with crippling anxiety and/or avoidance behaviors. The solution is psychotherapy. Not that I’m recommending this for our officials, mind you. But some time spent sorting out present reality from past calamity might not be a bad idea.

Another explanation is that the control board threat is a way of short-circuiting debate. If you don’t want to slash the budget, then you must be blind to the imminent danger. You’re as irresponsible as the officials who got us into the original mess.

Let’s step back and look at a few facts.

When Congress imposed the control board, the District had, for years, been closing gaps between expenditures and revenues by raiding its “savings account.” The gaps had nothing to do with a temporary revenue shortfall caused by a recession. And the raids were such that the account ultimately had a negative balance.

This year, the Council decided to help close the budget gap by using $167 million in reserve funds, plus an additional $51 million in Fiscal Year 2012. This would leave $606 million–somewhat less than half of the fund balance when Mayor Fenty took office. But only if the city spent every dollar the budget allows. I’m told it usually doesn’t.

One thing these figures show is that the District used to have a very large fund balance indeed. They also show that there’s no immediate danger of dropping the balance so low as to trigger Congressional intervention. In fact, as a new brief by the DC Fiscal Policy Institute shows, the District’s balance, relative to general fund expenditures would still by higher than most states’.

The District can start building the balance up again as the economy bounces back. It could start as soon as next year by revisiting both the spending and the revenue sides of the ledger, especially the latter.  We’ll have elections behind us. So whoever’s in office won’t have one eye on the polls–or campaign donations.

In late May, Council Chairman and would-be mayor Vincent Gray said, “We need a 365-day discussion” about spending and taxes, including the proposed new top income tax brackets that had just gone down to defeat. The shape that discussion takes will have much greater impact on the District’s future than this year’s dip into the reserve funds.

So, although I disagree with King’s assessment of the budget, I agree that we ought to be asking candidates, “What new sources of revenue should be considered …?”

The Defeat Poverty DC coalition wants us to ask candidates what they plan to do to reduce poverty in our community. A fine question. But I won’t let any candidate get away without explaining how he/she plans to find the funds.

NOTE: I’m indebted, as so often, to DCFPI Policy Analyst Jenny Reed for help with the budget figures.